Financial Technology Transforms How Investors Invest in the Stock Market

by Emily on June 24, 2020

in Articles

Over fifty percent of American households have some type of investment in the stock market, especially a 401K through their employers. The latest financial technology is making it possible for people, including low-income earners, to explore investment opportunities on Wall Street. Financial companies, such as Robinhood, Stash, and Acorns have investment platforms for beginners and experienced investors to trade stocks online.

Although the coronavirus pandemic caused the US stock market to diminish profits gained from 2017 to February 2020, some companies, ETFs, and REITs increased their dividends for payments due in July to shareholders. Kirkland Lake Gold, TCW Strategic Income Fund, and Vonovia SE Properties are the top three companies on the MarketBeat list.

One reason a company increases dividend payments to its investors is because of an increase in its net profits. Other reasons are to attract equity investors and/or for company growth and expansion. The dividend increase allows companies to set aside a large part of their profits for future payments to investors.

Why Invest in Dividend Stocks

If this is your first time investing and you want additional income, dividend stock provides the financial means on a monthly, quarterly, or annual basis. You can include dividend stocks in your investment portfolio for diversification and protection against the uncertainty of the stock market. For beginner investors, Acorns, Robinhood, and Stash have trading platforms for buying and selling stocks, mutual funds, and ETFs. Only Robinhood has a platform to purchase and sell Cryptocurrency and other investment products with no commission fees. Acorns and Stash, for example, charge a low monthly fee of one dollar to trade on its platform after opening an account and depositing five dollars.

Benefits of a Dividend Stock

  • Supplemental income
  • Long-term and consistent growth of investment

Tips on Investing in Increasing Stock Dividends

  • Choose a reputable trader and research the dividend yield of companies and dividend payout ratio before investing your money
  • Select stocks wisely by setting limitations on how to invest in stocks
  • Seek dividend mutual funds and exchange traded funds (ETFs)

Now that low-income earners have access to investment products on the trading stock market, it is essential they choose a trustworthy trader. Avoid depositing your money into an account with a financial technology company without educating yourself about the investment arena. The company’s trading platform must be secured when you download their app to your digital device or using their website. Most financial technology companies have a feature for enabling a two-step authentication and creating a secured password for added security.

The Top Three Financial Technology Companies

  • Robinhood
  • Acorns
  • Stash

The best company for beginner investors and low-income earners listed above is Robinhood. The company provides technology that allows all people an opportunity to participate in the trading markets and financial systems. You don’t have to pay anything to trade on Robinhood’s trading platform. When you open an account, the company gives you one free stock after you link your banking account and deposit five dollars. You must check to see if your bank is on the list of banks the financial technology company accepts.

Acorns, Robinhood, and Stash operate online platforms and apps investors can easily and quickly download to their mobile devices. You can buy and sell dividend stocks, ETFs, REITs, and mutual funds on either of the companies’ websites or apps seven days a week and 24 hours daily. Users can invest small or large amounts of cash. After the decline of gains in the stock market in March 2020, economists are suggesting that people invest in companies and other stocks. Investors, regardless of their level of experience, have complete control over their investments and strategies.

People from all walks of life have the same opportunities as influential investors to participate in the growing market of electronic trading and investing. Online investing and trading require them to self educate themselves and to select company stocks wisely to avoid scams and losses. It takes time to research brokerage firms, financial technology companies, and investment products. Before investing, make sure you have a solid financial plan in place as a guide to create a secure investment portfolio. Consider dividend stocks as a long-term strategy to increase your investment growth or to generate additional income annually, quarterly or monthly.

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