Treece Talk: Know What You Have to Avoid Losing Benefits | The Dangers of Investing Apps

Treece Talk: Know What You Have to Avoid Losing Benefits | The Dangers of Investing Apps

NEED TO KNOW: The Dangers of Investing Apps

1. Apps tend to gamify investing, and while that can add to the excitement, it also makes it easy for users to get in over their heads. The colorful interfaces and push notifications can lead investors to check their balances too often. Too much looking causes many long-term investors to be too sensitive to short-term market moves that nudge them to make quick, emotional decisions.

2. They ignore the recommended “order” of investing. Tax-advantaged options like 401(k)s and individual retirement accounts (IRAs) should come first in your investment planning. Apps usually only offer taxable brokerage accounts, directing dollars away from the tax-free or tax-deferred growth of traditional and Roth IRAs.

3. Risk is always present in investing, but investment apps often fail to assess a user’s risk tolerance accurately. Additionally, they don’t follow up to verify a person truly understood the risks involved.

4. Apps force you to give up personal, one-to-one customer support. Conversely, when you invest with a broker and have a question or concern, you simply call and speak with your advisor. This is not always the case with investing apps, which may only offer email support.

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