INVESTMENT PLATFORMS: WHAT THEY ARE, TOP 5 AND HOW TO CHOOSE ONE
Investment platforms can help you enter the stock market. If you understand the basics of investing, you can start using them quickly. Let’s analyze what a trading platform is, how it works, the benefits of using one, and how to choose the best one for you. In addition, you will find a list of the best.
What are investment platforms?
In a nutshell, investment platforms are types of software that allow you to make transactions on the stock exchange and manage your accounts. They are an option for ordinary people (not stock market professionals) to buy and sell stocks, bonds, and mutual funds without the need to work directly with a broker or an investment manager.
Imagine that the trading platform is similar to online banking. It is an app that allows you to do many things from your computer or smartphone instead of going to a branch in person and asking a bank representative to do it for you. There are trading platforms on the stock exchange that offer various functionalities. But basically, they all serve the same purpose: they allow you to make transactions on the stock exchange from the Internet.
Investing in the stock market can be a great way to create passive capital passively.
How do investment platforms work?
These platforms allow you to invest in various financial products through a transaction or exchange. They are most commonly used to buy or sell shares. Traditionally, the only people who could buy and sell on the stock markets were the stock brokers, who had a special license. In addition, these transactions were always done in person on the trading floor, such as at the New York Stock Exchange.
But nowadays, the purchase and sale of shares can be made through a broker by phone and electronically. This is where investment platforms come into play. The platform acts as a virtual stock market that allows you to perform the same tasks as a broker or trader.
The best thing is that you don’t need to talk to or hire a broker. One of these platforms can allow you to make effective investments, investigate on your own using various reports and analyses, and request the purchase or sale of shares.
Some trading apps will also allow you to buy CFDs. CFDs are complex financial instruments that allow you to make a profit from stock price changes. The problem is that if you use them, you risk losing your money due to leverage.
Advantages of using investment platforms if you are an entrepreneur
If you are an entrepreneur, using investment platforms has several advantages:
- Ease of use. When using investment platforms, you do not need to contact a broker and wait for an answer if the stock you want to buy is unavailable at that time. You can log in to your platform account at any time and start investigating or making a transaction.
- Speed. Speed and efficiency are essential for entrepreneurs. By doing things yourself with the investment platform, you will eliminate the time you waste talking and arguing with a broker.
- Schedules. You may only be able to research investments or make transactions at times that are not convenient for traders. You can indeed request a transaction outside the opening hours of the stock exchanges, but it will not be official until the stock exchange opens again. Platforms allow you to do things at your own pace.
- You decide. Another great advantage of using investment platforms is that you can investigate which transactions are convenient for you on your own. All the information you want to obtain is at your fingertips. This allows you to make decisions on your own, and you are not left with the doubt of whether the buying and selling suggestions that your broker makes to you are based on personal preferences rather than on objective data.
- Price. The final advantage is that investment apps usually charge lower fees than traditional brokerage companies.
The 5 best investment platforms in the USA
Platforms for beginners
Any amount, no matter how great or small, can be invested through this service. One can acquire
- ETFs, and mutual funds.
ETFs are a low-cost, low-risk investment tool.
You are not allowed to engage in transactions involving futures, commodities (raw materials like oil or cereals), or cryptocurrency. Itis one of the best platforms because your online transactions have no cost for products negotiated in the United States, and they do not charge for services that other firms do. When you open an account, you will have access to its screens, simulators, and much information about market movements.
By opening an account on this platform, you will be able to invest in
- shares, mutual funds,
- and vouchers for commodities (untransformed goods).
- debt bonds
- bitcoin futuresCurrencies
On its 25 screens, you can see the movement of ETFs and mutual funds. With its calculators and simulators, you can invest for your vacation, education, or retirement. It is one of the best platforms because online transactions are free. But, since one of the main features of this platform is financial education, transactions in the OTC market have a cost of $6.95 per transaction.
OTC stands for over the counter, which are transactions not made directly on the stock market.
Platforms for an intermediate level
This platform allows you to invest in 135 markets in 33 countries and is designed for active investors willing to pay from $0.005 in commission per traded share up to 1% of the total volume traded. The securities that can be negotiated are:
- shares mutual funds
- debt bonds
You can explore the world market according to the parameters you define through its numerous screens, simulators, and idea generators. Its mobile app makes it easy to navigate and clearly explains the steps for your investments.
You can trade over 3,000 financial instruments and 85 cryptocurrencies on this platform. You also find ETFs, commodities, and currencies.
This low-cost platform has many educational resources and webinars. One of the most striking aspects that make it one of the best platforms are its tools and functions. Capital.com allows you to customize the indicators you want to see, the analysis tools, and the indicators of the technology market. Artificial intelligence engines back all your information.
Platforms for risk-loving traders
If your risk profile doesn’t take away your sleep, e-Toro is perfect. In fact, its motto is: “Every investment involves risks. Just risk the money you can afford to lose.” On this platform, you can invest in a wide range of options, and when opening an account, you will not pay commissions. This platform also specializes in the exchange of cryptocurrencies.
Cryptocurrency investment platforms
The first thing you need to buy cryptocurrencies is a place to store them. These places are known as wallets.” Once you have purchased your wallet, you can access one of these sites:
- Coinbase is one of the most popular platforms.
- Binance is available in more than 150 countries.
- Robinhood: A platform focused on young adults
- Gemini is one of the few regulated platforms.
- Kraken: One of the oldest and safest platforms
How to choose an investment platform
There are two main factors to take into account when you want to choose a trading platform: functionalities and rates. You must look for the best combination of both.
One of the main features you are interested in obtaining is an easy interface to use both from your computer and from any other mobile device. The best investment platforms give you access to as many stock markets as possible so that your investment options are not limited. Ensure that the option you choose offers detailed information, analysis, and reports on all the available stocks you can trade with.
The platform of your choice must adjust to the level of investment with which you feel comfortable. Some platforms ask you to make a very high minimum investment, while others have a lower investment threshold. Find a platform that, from day one, allows you to invest the amount you want, no more or less.
An additional feature that you should look for is flexibility. Some platforms limit the number of transactions you can make, depending on how much money you have in your account. Some also request prior approval to proceed with more complex investments.
For the fees, this is quite simple: look for investment platforms that charge low fees for making transactions. This will keep more money in your account. But don’t just tell yourself the rates; check if there is any monthly or annual cost for using it. Keep in mind that you must compare the costs with the functionalities offered. There may be cheap trading apps but don’t have the functions you need to invest in cryptocurrencies, for example.
What should an investment platform have?
These are the most important aspects of choosing an investment platform:
- Transparency. If you are unclear about the costs and commissions, contact the platform. Don’t decide on a platform until you understand what they will charge you.
- Attention. Customer service is also a good indicator to help you decide on a good platform. If you do not have customer service and are not an expert in these matters, we recommend looking for another one.
- Cost. Look for them not to require minimum deposits so that you can invest according to your budget.
- Diversity. The range of options for investing is also important. However, remember that more options can also lead to uncertainty about where to invest.
- Other users. Check that the app has discussion forums where you can interact and consult other investors’ opinions about the performance of the options of your interest.
- Interface. It is recommended that the visual configuration is to your liking and that you understand it. If the interface is complex, this could cause you problems when investing. Also, check the appearance of the interface on your mobile.
- Regulation. Make sure that the platform of your choice is regulated.
Investing can help you increase your profits.
As an entrepreneur, you surely want to make good investments that bring you the maximum possible profits. The stock market, when handled properly, is an option to invest and see how your money multiplies. And nowadays, achieving just that is easier than ever through online investment apps. But before you get fully into one of them and start making transactions, you must understand how they work. Learning and educating yourself is always the best way to make good decisions and select the tool that best suits your needs.
FREQUENTLY ASKED QUESTIONS
What can you buy through investment platforms?
How do you know if an investment platform is safe?
Is it necessary to use an investment platform?
No, but it’s comfortable and convenient. Investment platforms provide you with a large amount of information resources and financial education to strengthen your knowledge about the stock market and cryptocurrencies. In addition, you don’t need to travel, and you have control of your investments on your mobile phone.
What are the types of trading platforms?
There are two types: proprietary and commercial. Proprietary platforms are those used by brokerage agencies for internal use. For their part, commercial platforms are created for the general public. They allow anyone to invest and charge a commission.
What are the best investment platforms?
The best platform is the one that best suits your needs. Here are some options:
What is the best platform to invest in the stock market?
Fidelity, a company founded in 1946 that launched into the online world in 1995, is a good option. 97.9% of the orders executed on this platform improve the national price in the United States. In addition, it has solid technological security, and its educational resources will help you grow as an investor.