April 02, 2021
The stock market can be a tricky, unforgiving place, and new investors are continually at a disadvantage when they first play the market. However, new users that use Front avoid the common mistakes of other new investors and actually see significant returns on their investments within six months. Below we discuss some common issues new investors face every day.
Exposure to an abundance of misinformation.
Remember the old saying don’t believe everything you read? Well, that old saying hasn’t ever been more applicable to anything else quite like it has with investing. New, undiscerning investors are constantly at the mercy of unreliable sources that provide them with bad advice and false information. While some information that comes their way might be accurate, it is difficult for a new investor to know how to apply it properly to their stock portfolio.
Unable to effectively mitigate risk.
New investors don’t have a strong grasp on concepts like hedging or enough knowledge to devise a working strategy to mitigate risk. Because of this, new investors risk losing thousands of dollars on their trades and end up receiving unfavorable returns.
No idea where to invest first.
There are plenty of lucrative areas and industries for new investors to explore. However, some may not be ideal for a new or casual retail investor. It takes years of experience to develop a strategic approach to playing the market, and enough time investing in a specific industry to become adequately schooled in it. Most new investors make impulsive stock picks due to inexperience and end up losing money on their trades.
Impulsive investing due to inexperience.
When new investors have money to put into the stock market it starts to burn a hole in their pocket, they typically want to put it into something ASAP. With all of the inaccurate information circulating the internet, new investors are easily swayed by a convincing article or advice from a social media account. While these rookie sources might perform a miracle and make you money, it is always advisable to consult a professional before making any trades.
Why does Front help prevent these common mistakes?
If you’re a new investor, it is likely you’ve experienced some misfortune in the market. This is because casual investors do not have the same access to important information and resources that financial professionals and powerful firms do. For the first time ever, Front’s cutting-edge platform provides retail investors with all of the vital information they need to pick the right stocks.
Front’s interface uses unique algorithms that help users discover the best stock picks for their portfolios. These are generally based on their investment style and interests. Over the last six months, new Front users have seen a 55.39% average growth on their portfolios. In the same study, we found that investors who solely followed the S&P 500 only saw a 34.91% average growth on their portfolios over the same period of time.
Front is a free app geared towards giving casual investors an advantage in the market. New investors are no longer stuck making impulsive investments and destined to play an unfair game. Front has officially leveled the playing field between hedge funds and retail investors.