Riding interest in GameStop stock, apps teach stock-picking and cryptocurrency and let young investors practice investing
By Julie Jargon
Payne Porter and his sister, Piper, jumped on the GameStop stock frenzy in late January. Mr. Porter, a 23-year-old clothing designer in Los Angeles, invested $5,000, while his 26-year-old sibling, who works at an L.A. marketing agency, put in $3,000, both using the Robinhood trading app.
The wild ride they experienced during the two weeks they owned the stock was both thrilling and terrifying, they said.
"I remember texting my dad when I was up $40,000 and he told me to pull out and I didn't," Mr. Porter said. "It was definitely an emotional rollercoaster."
When they finally quit, they were still ahead by about $10,000 each. It was their first time buying stock on their own, and while they timed their exit well, they said next time they will proceed with more caution.
"It felt more like gambling than investing," Ms. Porter said.
Young investors have rushed into the stock market, buoyed by the belief that investing should be for everyone. They are lured by easy-to-use trading apps that don't charge commissions or require minimum deposits, and use emojis, bold graphics and challenges to make the stock market feel more game-like.
Many inexperienced investors made bets on GameStop, most without even the limited success
the Porters experienced. Some suffered substantial losses.
Now, financial and education tech companies are trying to teach younger investors how to enter the market more wisely. Their focus is less on gaming the day-to-day ups and downs of stock valuation, and more about strategizing for the long term. Some allow trading but with certain guardrails, such as parental approval or a warning when a portfolio is out of balance.
Here are a few of their apps and services:
Invstr is a trading app that allows wannabe investors to compete with other players for prizes in a "fantasy finance" game, to learn about investing before putting in real money. All users-whether they are playing the game or actually trading from within the app-receive a scorecard on their investment performance, with detailed insights into their risk exposure. People can take a 10-part interactive course on investing.
The app's content is free for 90 days. There's no charge to open an account within the app and no commissions on trades. After three months, people can subscribe to premium content for $3.99 a month.
Qooore is a new app designed by two friends in their 30s who were interested in investing but found trading complicated. They figured other young adults must feel the same way, so late last year they launched a service that looks more like a social-media app than an investment app. People can swipe through for stock information and tap a heart if they like a stock. The app is basic, but it's intended to provide a fun entree into learning about stocks.
Co-founder Igor Sheremet works with licensed traders to develop the content, which is focused on short-term investing but not on day trading. He said he is in the process of adding longerterm investment advice to the app. The free app provides basic information on a number of consumer stocks and includes quizzes to test users' knowledge.
Everfi offers courses on financial literacy aimed at children in grades 4 through 12 to public schools at no charge. Courses consist of 20-minute videos and online activities in which students can create simulated stock portfolios. Its Marketplaces curriculum for high schools is its most popular-and has seen a surge in demand in the past two months, which the company attributes to news around Robinhood and GameStop.
Greenlight is a kids' allowance and debit-card app that recently launched a financial-education and trading arm. The new feature gives kids access to Morningstar analyst notes and educational videos about investing. Kids also can buy and sell stocks within the app, but only with parental approval. The Greenlight plan that includes investing starts at $7.98 a month.
Benjamin Talks is a website and weekly newsletter that provides parents with tips on how to talk to children about money and investing. The company, created by two women who worked in finance, sells actual piggy banks aimed at teaching kids to allocate their pocket change for different purposes: spending, saving and giving.
The Porter siblings heard about GameStop through social media and friends. When their uncle, Brian Dightman, a financial adviser, heard they had invested in GameStop, he urged their mother to have them sell. They never got his message, but Ms. Porter decided to get out when the stock reached $250. Her brother hoped the shares would keep rising, but he sold at $129 a share.
While they were profiting from their risky bet, the Porter siblings' cousin Max Dightman was pulling out of Robinhood. He didn't invest in GameStop but had bought other stocks, as well as bitcoin.
"Bitcoin was scary. It goes up and down so rapidly. I felt like it could come crashing down at any moment, so I pulled out," said Mr. Dightman, a 20-year-old sophomore at the University of Washington who lost $10 on his $120 bitcoin investment.
Mr. Porter said he put $8,000 of his GameStop profit into a managed account, $1,000 back into GameStop and the other $1,000 into other small company stocks. His sister said she transferred all her gains into a savings account.
"I'm waiting to learn more about investing before I buy again," she said.
The Wall Street Journal
https://www.wsj.com/articles/investing-not-gambling-these-apps-and-services-help-young-stock-buyers-think-long-term-11615644000