“Young people want to buy shares of familiar start-ups on the stock exchange”: finance trends according to the founder of the Robinhood service

The Robinhood stock purchase application allows everyone to trade on the stock exchange using a simple application (we wrote about it here ). Now Fintech startup is estimated at about $ 1.3 billion and has about 2 million users. One of the co-founders of the company, Baiju Bhatt, gave an interview to Business Insider , in which he spoke about the modern approach to savings and the main financial problem of humanity. We publish the main thoughts from this conversation.

About Robinhood

The application, which was launched in 2015, is aimed at those who want to easily invest in stocks, without delving into the intricacies of stock markets. There is also a paid subscription to Robinhood Gold for the use of borrowed capital or for the immediate execution of transactions (while users of the main application are waiting for their turn to buy a few days).
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Why is buying stock better than a bank deposit?

There is a common idea in financial circles that people do not know how to properly invest and distribute risks. Due to illiteracy, investors invest in high-risk financial instruments and lose capital. The global economic crisis pointed to the true problem - many have no savings at all, they just live from paycheck to paycheck, and they have nothing to lose. At the same time, the idea still remains in the mind that the best place to keep finances is a bank deposit, and the stock exchange is accessible only to professionals with a lot of money, newcomers can be deceived and left without savings.

But in fact, everything is different. To significantly increase the deposit in the bank, you need to have a large initial deposit. You can earn money on promotions, even if you don’t have much money in your pocket. Now there is an opportunity to invest with a small initial capital using leverage. The stock market has become accessible to all, regardless of income. Over time, work on the stock exchange becomes a habit and can allow you to create an impressive financial cushion.

Young people are not afraid of crises

It is interesting to observe how the behavior of investors is changing with simplified access to markets. During the global economic crisis, many, succumbing to panic, closed deposits. However, now young investors behave differently: they are trying to capitalize on volatility and in the fall in prices they see excellent prospects for increasing income. Therefore, during the period of important fundamental news (for example, during Brexit) Robinhood does not limit the possibility of withdrawing money, but gives customers their own control over their finances.

How to make investments on the exchange more accessible?

Modern brokers aim to make consumers' financial life as simple as possible. Advanced technology helps to solve this problem. Now young people are more willing to invest in shares of companies that are already on the heels of (Snap, Blue Apron) - and this is good.

Famous names help newcomers to confidently take the first steps. But investing should be even simpler: in the future, the introduction of advanced analytical technologies will help people choose the most appropriate and efficient tools without going into market terminology. Improving financial literacy of the population directly depends on how clear and simple are the services that provide access to markets.

Other materials on finance and stock market from ITinvest :

Source: https://habr.com/ru/post/337538/

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