Gary Shilling explains the only way to beat the market and win
Millennials come to the stock exchange to beat the market
Demand for online trading platforms has grown in recent months as investors seek to take advantage of undervalued stocks.
Investment app Robinhood posted record results in the first quarter of 2020, with daily trading up 300% from the end of 2019. Elsewhere, over the same period, demand for eToro and Raging Bull Trading grew 220% and 158%, respectively.
While the severity of the COVID-19 outbreak and its impact on markets began to unfold in March, the online platform Wealthsimple Trade recorded a 54% increase in new users and a 43% increase in total transaction volume. So far in April, the shopping site has added 7 thousand new users.
Many of these new users are young or even novice investors. More than half (55%) of new Wealthsimple users aged 34 and under. According to the founder of Raging Bull Trading Jeff Bishop, no wonder. He said many millennials are currently looking for new opportunities to make extra money or recoup previous losses..
«Many people are at home and have more time. And many, unfortunately, have lost their jobs and are looking for new opportunities», – Bishop told CNBC.
«Young investors are looking for ways to recoup their money, he continued. – They are really interested in undervalued stocks».
The advent of online investment platforms has made it possible for people to buy shares of individual companies in a convenient and easy way like never before..
This can be risky business. Typically, financial advisors recommend choosing diversified instruments such as passively managed index funds or ETFs that provide access to the full range of stocks.. «Investors should always consider the balance of their investments across different regions, sectors and asset classes», – noted Joel Carpenter, Marketing Director at St James Place Place Management.
However, the shocking nature of the current downturn, which has wiped out the market value of many companies, suggests that now is the time to gain a foothold in strong stocks..
«Typically, when you see a decline like this, the expected stock return rises, – noted in an interview with CNBC Make It Ben Reeves, Investment Director, Wealthsimple. – We are seeing dramatic fluctuations in the prices of some of the most popular stocks, and investors are trying to capitalize on this».
In particular, investors are interested in stocks that thrive in the new environment, such as telecommunications, pharmaceuticals and entertainment, as well as stocks that they believe were «resold», such as promotions of tour operators, restaurants and banks.
Top-traded company stocks on Robinhood, Raging Bull Trading, eToro, and Wealthsimple last month included Apple, Disney, Microsoft, American Airlines, Boeing, Carnival, Tesla, Air Canada, Aurora Cannabis, Netflix, Amazon, and Toronto Dominion Bank..
Investment Expert CNBC Jim Kramer recently named this list «not perfect, but very good for speculation».
However, choosing the right rates is not an easy task.. «Especially now the market is very volatile, you can make many mistakes», – noted investor Raging Bull Trading Kyle Dennis.
Anyone thinking of trying to pick a stock for the first time should only do so after they have set aside a reserve fund for emergency operations, an investor CNBC spoke to agrees. Even so, individual stocks should represent only a small part of the overall investment strategy..
But, having a small bank on disposable income, it can provide a good opportunity «to study» long term, said Raging Bull’s Bishop.
«People should try to establish the amount they want to earn each month. Find a way to do it and make it your rule», – he said.
«For some investors, little money to play with can help remove the temptation to try and get carried away with money that you have to leave in something boring – like your retirement fund.», – added Reeves.