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Unlike Robinhood, the best investing apps don’t involve day trading –



The recent astronomical rise of meme stocks brought many people to the stock market for the first time, typically through Robinhood, the commission-free stock trading app that has promised to democratize access to the stock market. According to a number of financial advisers, the app appears to be democratizing certain types of risky investing, like day trading. There are potentially less risky — and equally user-friendly — app options out there.

The thing is, it’s impossible to predict the market. Many professionals spend their entire careers trying to do so, with varying levels of success. And regular people who invest in individual stocks in the short term are likely to lose money, no matter what you hear on TikTok. Study after study has said so.

Particularly worrisome are “herding events,” including those fomented in Reddit’s WallStreetBets community that encouraged hoards of people to invest in certain stocks, like GameStop and AMC. On Robinhood, people were already more likely than other retail investors — people who aren’t professionals — to invest in the same stocks as other users, according to Christopher Schwarz, faculty director of the University of California Irvine’s Center for Investment and Wealth Management and one of the authors of a paper looking at outcomes of investor behavior on Robinhood. When too many people crowd a stock, “the price of the stock overshoots what it should be and over subsequent days it corrects.”

The study, which was conducted using Robinhood trading data from 2018 to 2020, found that those who invested in the top 10 newly purchased stocks saw returns in the next month that were 5 percent lower than that of the S&P 500 index — a “pretty horrific” outcome, Schwarz said. Robinhood is the only trading app that’s disclosed user holdings so the researchers did not compare investors’ performance on its competitors.

Put another way, “if you were a Robinhood user and bought those top 10 stocks every day, you would have lost 97 percent of your money over two years,” Schwarz said. He added, “It’s probably one of the biggest negative returns documented by academics.”

Robinhood has been criticized for letting people trade on credit and for making investing feel like a game, using elements like confetti and color-coding in the app to stimulate trading.

“We are proud to expand access to the financial system and enable millions of people to learn and invest responsibly,” a Robinhood spokesperson told Recode. “We see evidence that most Robinhood customers use a buy and hold strategy, and research published by the National Bureau of Economic Research found that Robinhood customers acted as a market stabilizing force through market volatility in 2020.”

Still, even professionals don’t have a great track record picking stocks.

Investors in equity mutual funds consistently underperform the S&P 500 index, according to Cory Clark, chief marketing officer at financial services market research firm Dalbar and primary author of a longstanding report on the topic.

These institutional investors fall prey to confirmation bias, in which a positive trade makes them overly confident in their abilities, he said. There’s reason to believe regular people could be even more susceptible.

“In the context of day trading, it’s that on steroids,” Clark said. “It’s very dangerous for average investors.”

All this is to say, day trading — buying and selling stocks over short periods of time — is not a reliable way to build wealth, according to these financial advisers.

As Gretchen Behnke, principal at Pearl Financial Planning, put it, “Individual stock picking is almost always going to be too risky for regular people.”

What she and every other financial professional we spoke to suggested was the opposite of day trading individual stocks: investing in highly diversified and low-cost exchange-traded funds (ETFs) or index funds and leaving that money in there for a long time.

Of course, speak with your own financial adviser or investment professional to decide what’s best for you.

“Prudent investment can be pretty dull,” Zach Teutsch, a managing partner at the advisory firm Values Added Financial, told Recode. “If it’s fun, it’s probably because someone gamified it to make it more enjoyable as entertainment — all to help profit off of the investor.”

The safest bet on Robinhood would be buying a wide variety of ETFs, rather than individual stocks like GameStop or even riskier products like options. Like mutual funds — which you can’t purchase on Robinhood, but you can buy on competitors’ apps like Schwab, Fidelity, and Vanguard — ETFs are low-fee baskets of professionally managed stocks that follow a particular investment strategy. Some ETFs and mutual funds, for example, provide exposure to all the stocks in the S&P 500, while others are dedicated to different company sizes or industries.

One such fund, Adasina Social Justice All Cap Global ETF, includes 900 companies that Adasina says are in alignment with social justice movements like Black Lives Matter.

“This whole situation with GameStop came from popular discontent with wealth inequality,” Rachel Robasciotti, the founder and CEO of Adasina Social Capital, said. “If you’re ready to put your money where your values are, do it in a smart way. Use a fund that’s diversified.”

Financial advisers encourage investing in such funds to give people exposure to a wider range of stocks than they would get by picking individual stocks, so that their risk is more balanced. The idea is that hopefully declines in certain stocks are countered by gains in others.

Many financial advisers also suggest leaving your money in these funds for long periods of time. Teutsch likens trying to get huge returns quickly to substituting a recipe that requires 400 degrees for an hour with double the temperature for half the time.

“That’s what people try to do in investing. That’s not how investment works,” he said.

When people are investing in the short term in individual stocks, it can be tempting to buy and sell with market swings, he said. Huge gains — like the more than 1,700 percent rise on GameStop this year before its subsequent fall — are possible, but so are huge losses. Stocks are volatile in the short term, but in the long term, the market as a whole tends to go up, which is why advisers suggest investing money and then leaving it alone for years if not decades.

Longer-term investments are also better from a taxation point of view. People who are new to day trading on Robinhood might be surprised by how much investment income is taxed. If you sell your investments within a year of buying them, for example, you could be taxed at significantly higher capital gains rates than if you were to hold onto them for more than a year.

Financial advisers we spoke to say, if you’re going to day trade on apps like Robinhood, make sure you’re doing so with only a small percentage of your money.

“You can take a small amount of money and play with it, but consider it an entertainment expense,” Behnke said. “This is separate from savings and retirement.”

Similarly, the experts also say not to invest money you don’t have. Robinhood lets people trade on margin, meaning that they give you a small loan. That potentially allows people to invest — or lose — more money than they have.

The latest buzz around meme stocks has meant a greater consciousness of investing in general, as a way to compound wealth and save for retirement. And Robinhood’s rise has been paralleled by increased popularity in investment apps that don’t involve day trading, like Acorns, Betterment, Wealthfront, and, to some extent, Stash. Acorns, for example, saw 100,000 new customers the day of the GameStop news.

For a fee, these apps handle the slow, boring work of investing your money in diversified funds (usually ETFs) as well as provide some other services like portfolio rebalancing and tax-loss harvesting so that your money can make more money — slowly but steadily. We’ve outlined how they work:

Acorns ($1-$5 a month)

Acorns lets you automatically add money to a wide variety of ETFs in a range of pre-selected portfolios, through regularly scheduled deposits and by rounding up money on your purchases and putting that money into your account. It also does unsexy stuff such as reinvesting dividends and rebalancing your portfolio.

Acorns CEO Noah Kerner wants customers to invest their money as long as possible.

“People get themselves in trouble because suddenly people get panicked and lock in a loss,” he said. “That’s the moment to stick with it and even invest more.”

Acorns has a monthly subscription model, as opposed to Robinhood, which doesn’t charge users but makes money depending on the volume of trades. Kerner believes Acorns’ business model allows it to better serve its customers.

“The business model dictates how a company makes decisions,” Kerner said. “I’m not in the business of trying to make decisions misaligned with your best interests.”

Betterment (0.25 percent of assets under management per year)

Betterment sets investors up with a range of diversified ETFs based on a number of factors, like their age and aversion to risk, all of which are determined by a questionnaire.

“This is not short-term, speculative, to-the-moon kind of stuff,” Dan Egan, VP of behavioral finance and investing at Betterment, told Recode.

Investors can let Betterment choose for them or decide to put their money into socially responsible portfolios, like those related to preventing climate change or encouraging social justice.

Accounts have something called tax-loss harvesting, which helps people lower their tax bills by using losses to offset gains. The app also notifies people trying to sell off assets how much more they might have to pay in taxes compared with keeping the investment in longer.

Like Robinhood, Betterment uses visual cues within the app. Unlike Robinhood, whose color-coding is based on how much a stock is up or down and may cause people to react to prices after the fact, Egan says Betterment uses color-coding to motivate people to follow their stated investment goals.

“You can’t change yesterday’s returns but can make changes to put your financial plan on track,” he said.

Wealthfront (0.25 percent of assets under management per year)

Wealthfront also uses a questionnaire to determine the best investment strategy for people, depending on criteria like age and risk aversion. The site is designed to operate very differently than Robinhood.

“We are definitely on the other side of the spectrum from a day-trading platform. Our whole thesis on investing is you can’t control or beat the market on a consistent basis,” Kate Wauck, VP of communications, said. Instead, the company puts people’s money in low-cost diversified index funds.

It also does portfolio rebalancing and tax-loss harvesting, things it assumes most regular investors don’t want to be involved in.

“We’re for people who’ve got some money saved in their bank account, and know it’s not making money, but don’t want to spend time thinking about investing and being actively involved,” she said.

Stash ($1-$9 per month)

Stash is sort of an amalgam of Robinhood and Acorns. Like Robinhood, it lets you invest in individual stocks and ETFs but tries to get you to hold on to those for a longer term.

“We purposely built a bad day-trading system,” its founder and CEO Brandon Krieg told CNBC earlier this month. “Our brand and our message, as well as our onboarding, are not attractive to someone who’s coming to day trade.”

Like Acorns, it encourages people to increase their investments with automated deposits and by rounding up money spent on purchases. The user is responsible for picking individual stocks and ETFs to build a portfolio, but the app prompts the user to diversify those assets.

Open Sourced is made possible by Omidyar Network. All Open Sourced content is editorially independent and produced by our journalists.

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TFSA Investors: North America’s Best Growth Investment – The Motley Fool Canada



Exchange Income (TSX:EIF) is a diversified, acquisition-oriented corporation focused on opportunities in aerospace, aviation services, equipment, and manufacturing. The business plan of the company is to invest in profitable, well-established companies with strong cash flows operating in specialized markets.

Attractive valuation

The company has a price-to-earnings ratio of 13.62, price-to-book ratio of 2.08, dividend yield of 5.53%, and market capitalization of $1.43 billion. Debt is very sparingly used, as evidenced by a debt-to-equity ratio of just 1.77. The company has excellent performance metrics with an operating margin of 8.84% and a return on equity of 3.96%.

Effective strategy

The objectives of the company are to provide shareholders with stable and growing dividends and to maximize intrinsic value through on-going active monitoring of the company’s operating subsidiaries. Management continuously monitors and provides support to the subsidiaries that operate autonomously.

Strong aerospace division

The company’s aerospace and aviation division includes a variety of operations within the aerospace and aviation industries. It includes providing scheduled airline, charter service and emergency medical services to communities located in Manitoba, Ontario, and Nunavut. Regional One is focused on supplying regional airline operators around the world with various aftermarket aircraft, engines, and component parts.

Provincial Aerospace provides scheduled airline, charter service and emergency medical services. The division also designs, modifies, maintains and operates custom sensor equipped aircrafts. Provincial Aerospace also provides maritime surveillance and support operations and also offers a full range of pilot flight training services, from private pilot licensing to commercial pilot programs.

Essential manufacturing services

The company’s manufacturing division provides a variety of manufactured goods and related services in several industries and geographic markets throughout North America. Quest Windows is a manufacturer of an advanced unitized window wall system used primarily in high-rise multi-family residential projects in North America. WesTower is focused on the engineering, design, manufacturing, and construction of communication infrastructure and provision of technical services. Ben Machine is a manufacturer of precision parts and components primarily used in the aerospace and defence sector.

LV Control is an electrical and control systems integrator focused on the agricultural material handling segment. WBM manufactures specialized heavy-duty pressure washing and steam systems, commercial water recycling systems, and custom tanks for the transportation of various products, primarily oil, gasoline, and water. Overlanders manufactures precision sheet metal and tubular products.

Sustainable growth

The company is a diversified, acquisition-oriented corporation focused on opportunities in aerospace, aviation services and equipment, and manufacturing. Exchange Income retains the key management personnel following acquisitions and have them own an equity interest in the company. Management invests in profitable, family-owned businesses with strong cash flows that operate in specialized markets.

In addition to having a strong acquisition strategy, the company has oversight and focuses on the generation of organic growth. Organic growth opportunities come in the form of expanding operations for existing businesses or by investing capital into new equipment and facilities for new customers. The company assesses organic growth opportunities with similar criteria as it does for acquisitions to achieve accretive returns on the capital required.

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What Is The Ownership Structure Like For Boardwalk Real Estate Investment Trust (TSE:BEI.UN)? – Simply Wall St



The big shareholder groups in Boardwalk Real Estate Investment Trust (TSE:BEI.UN) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Boardwalk Real Estate Investment Trust has a market capitalization of CA$1.9b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholders can tell us about Boardwalk Real Estate Investment Trust.

See our latest analysis for Boardwalk Real Estate Investment Trust


TSX:BEI.UN Ownership Breakdown February 28th 2021

What Does The Institutional Ownership Tell Us About Boardwalk Real Estate Investment Trust?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Boardwalk Real Estate Investment Trust does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Boardwalk Real Estate Investment Trust’s earnings history below. Of course, the future is what really matters.


TSX:BEI.UN Earnings and Revenue Growth February 28th 2021

Boardwalk Real Estate Investment Trust is not owned by hedge funds. The company’s largest shareholder is Boardwalk Properties Company Limited, with ownership of 19%. Cohen & Steers Capital Management, Inc. is the second largest shareholder owning 9.2% of common stock, and CIBC Asset Management Inc. holds about 4.5% of the company stock.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Boardwalk Real Estate Investment Trust

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Boardwalk Real Estate Investment Trust. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it’s a big company, and the insiders own CA$4.4m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 35% ownership, the general public have some degree of sway over Boardwalk Real Estate Investment Trust. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 19%, of the Boardwalk Real Estate Investment Trust stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we’ve spotted with Boardwalk Real Estate Investment Trust (including 2 which are potentially serious) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

When trading Boardwalk Real Estate Investment Trust or any other investment, use the platform considered by many to be the Professional’s Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)

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Financial Focus: A primer on different investment accounts – Airdrie Today



There are so many different investment types that it can make investing seem overwhelming. Here’s a high-level overview of what you need to know. Don’t forget, your financial advisor is here to understand your financial goals and guide you on a path to financial success.

Registered Retirement Savings Plan

The Canadian government offers various options to people who want to achieve particular saving goals through registered accounts, such as a Registered Retirement Savings Plan (RRSP). An RRSP is the government’s way of encouraging you to save for retirement by giving a tax deduction on the money that you save in this type of account. When you’re ready to retire, the funds you’ve accumulated can be converted into a steady stream of retirement income.

There are two major benefits to RRSP contributions – paying less income tax and tax-sheltered growth. Your RRSP contributions are deductible from your taxable income, which means you receive either a larger tax refund or a smaller tax bill when you file your taxes. While you will have to pay tax when you eventually withdraw the money from your RRSP at retirement, it will likely be at a lower rate because of your reduced income.

The second benefit is that an RRSP means your savings and interest grow sheltered from tax. You can gain a lot of financial momentum by contributing to your retirement plan early, in your 20s or 30s.

If you want to know more, The Co-operators has put together a simple explanation of what RRSPs are all about at

Tax-Free Savings Account

A second registered account you should have is a Tax-Free Savings Account (TFSA). Similar to an RRSP, a TFSA allows you to save money without incurring any taxes on gains you may receive through your investments or interest, up to the $6,000 annual contribution limit. Any Canadian aged 18 or over who has reached the age of majority in their province can open a TFSA.

Withdrawals from your TFSA are tax-free, your contribution room is restored the year after you make a withdrawal and income-tested credits and benefits, such as the GST credit, Employment Insurance and Old Age Security, are not affected by withdrawals from your TFSA.

Furthermore, Canadians aged 18 or older in 2019 who have not yet contributed have $69,500 of contribution room in 2020.

The Canada Revenue Agency will advise you each year of your current TFSA contribution room.

Registered Education Savings Plan

If you have kids or are interested in pursuing post-secondary education, a third registered investment account to consider is a Registered Education Savings Plan (RESP). This type of plan allows you to save for your child’s post-secondary education tax-free, with added funds contributed by the government.

There are two types of RESP – a family plan for any of your children who are under 21 years old, and an individual plan for anyone of any age, including yourself. For the family plan, contributions can be made until the beneficiary is 31 years old.

The main benefit of an RESP is that the account allows you to access government grants. The government will match up to 20 per cent of the funds that you put into your child’s RESP if they are under 17 years old, and there are additional benefit programs based on your income level and province.

Also, contributions to an RESP may qualify you for the Canada Education Savings Grant (CESG) until the year your child turns 17. Through the CESG, the federal government will contribute an additional 20 per cent of your annual RESP contribution to a maximum of $500 a child, per year. In addition to the CESG, you may also qualify for the Canada Learning Bond.

Another benefit of an RESP is tax-deferred investment growth, as contributions made to an RESP can accumulate and grow tax-free over the life of the plan. When you withdraw money to pay education-related expenses, only the additional earnings and grant portions of the plan are taxable. Because the child will likely be reporting a low level of income while attending school, the amount of tax they can expect to pay should be minimal.

Registered Retirement Income Fund

Registered Retirement Income Funds (RRIFs) are simply a continuation of your RRSPs. The only difference is that you must withdraw a minimum legislated amount of money each year.

The value of your retirement income fund and how long it will last depends on the investments you choose, how they perform and how much you withdraw each year.

The latest possible date to convert an RRSP to an RRIF is Dec. 31 of the year you turn 71. At The Co-operators, the minimum opening deposit for an income account is $10,000. You’ll enjoy drawing a steady income while continuing to accumulate interest and investment gains while deferring taxes on the invested portion.

Locked-in retirement income funds can differ by province, plan type, and withdrawal limits. Along with potential estate value in the event of premature death, the flexibility of withdrawal amounts and investment options have made retirement income funds a popular choice.

While RRIFs are by far the most popular, we also offer other options for retirement income funds if you have specific needs that a RRIF can’t fulfill. Ask your financial advisor for more details.

Life Income Fund

A Life Income Fund (LIF) is similar to a RRIF, except it’s specifically designed for locked-in pension funds. LIFs are only available in certain provinces for those with locked-In RRSPs, Locked-in Retirement Accounts (LIRAs), Registered Pension Plans (RPPs) and Locked-in Retirement Income Funds (LRIFs).

Non-registered Investments

A non-registered plan is an account that holds investments, which are taxable to you on an annual basis. If you’re saving for a vacation, a wedding or any other short-term goal, a non-registered plan is an excellent choice. It’s also a great way to increase your retirement savings if you’ve reached your RRSP contribution limit.

Although a non-registered plan does not offer the same tax advantages as an RRSP or TFSA, many benefits make a non-registered plan worth considering, such as fewer restrictions, more flexible age limits, contribution amounts and withdrawals.


An annuity is an alternative for those who want guaranteed payments for their lifetime. An annuity will pay you a set amount per month based on a plan that we design together. We offer various types of annuities to fit your lifestyle.

While there is a lot to consider when it comes to investments and your financial future, The Co-operators’ financial advisors are able to help with every step of the way.

—Submitted by The Co-operators

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