Why small investors are piling into share-trading apps

Over the last year, younger investors like Miss Ion have flooded online share-trading platforms, including eToro, Freetrade, and Robinhood.

“We’re witnessing an era where everyone can just start investing, and accumulating wealth from their phones with nearly zero fees for a transaction,” says Miss Ion, who lived in Romania until she was 18 and recently completed a master’s course at Cambridge University.

Nearly 60% of them describe themselves as first-time investors, and their average age is 31. Women now make up one in four of the platform’s investors, up from 13% a year ago.

But this rush to invest has some people worried. Constantin Gurdgiev, an economics professor at Trinity College in Dublin, points out that online discussion forums and social media can put all sorts of pressure on inexperienced investors.

“Research shows that enhanced access to trading and financial tools, and the perception of lower cost that these platforms offer, leads to excessive risk-taking and over-trading by retail investors,” he argues.

The video game retailer, GameStop, is perhaps the best known recent example. In January, its share price soared from $17.25 to $483, after contributors to a Reddit forum called wallstreetbets.

Over the last year, younger investors like Miss Ion have flooded online share-trading platforms, including eToro, Freetrade, and Robinhood.

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