In recent years, investment apps have revolutionized the way people invest in the stock market. One such app is Stash, a micro-investing platform that allows users to invest small amounts of money into a variety of ETFs. But the question remains, is Stash worth investing in? In this article, we’ll delve into the features, benefits, and drawbacks of Stash to help you make an informed decision.
What is Stash?
Before we dive into the pros and cons of Stash, let’s first understand what it is. Stash is a mobile-first investment app that allows users to invest as little as $5 into a variety of exchange-traded funds (ETFs). The app was founded in 2015 by Brandon Krieg and Ed Robinson, and it has since become one of the most popular micro-investing platforms in the US.
How Does Stash Work?
Stash is incredibly easy to use, even for those who are new to investing. Here’s how it works:
Setting Up an Account
To start using Stash, you’ll need to download the app and create an account. The sign-up process is quick and easy, and you’ll need to provide some basic personal information, such as your name, address, and social security number.
Funding Your Account
Once your account is set up, you can fund it with as little as $5. You can link your bank account or debit card to your Stash account, and transfer funds instantly.
Choosing Your Investments
Stash offers a range of ETFs to choose from, which are divided into three categories: Stocks, Bonds, and Real Estate. You can browse through the available ETFs, read about their investment objectives, and choose the ones that align with your investment goals.
Automated Investing
One of the key features of Stash is its automated investing system. You can set up a recurring investment plan, where Stash will automatically transfer funds from your bank account to your investment portfolio at regular intervals.
Pros of Investing with Stash
So, what makes Stash worth investing in? Here are some of the key benefits:
Affordability
Stash is an accessible investment platform that allows users to invest small amounts of money. This makes it an ideal option for beginners or those who want to start investing with minimal capital.
Diversification
Stash offers a range of ETFs that track various market indexes, sectors, and asset classes. This allows users to diversify their portfolios and reduce risk.
Low Fees
Stash charges a low monthly fee of $1 for accounts with a balance below $1,000. For accounts with a balance above $1,000, the fee is 0.25% per year.
Financial Education
Stash offers a range of educational resources, including investment guides, news, and market insights. This makes it an ideal platform for those who want to learn about investing while they invest.
Cons of Investing with Stash
While Stash has many benefits, there are also some drawbacks to consider:
Limited Investment Options
Stash currently offers around 40 ETFs, which is limited compared to other investment platforms.
No Human Advisors
Stash is a robo-advisor, which means that there are no human financial advisors to offer personalized investment advice.
High Expense Ratios
Some of the ETFs offered by Stash have high expense ratios, which can eat into your investment returns.
Is Stash Worth Investing In?
So, is Stash worth investing in? The answer depends on your individual financial goals and investment objectives. If you’re a beginner who wants to start investing small amounts of money, Stash can be a great option. The platform’s low fees, diversification options, and financial education resources make it an attractive choice.
However, if you’re an experienced investor who wants to invest larger amounts of money or requires more personalized investment advice, you may want to consider alternative options.
Alternatives to Stash
If you’re not convinced that Stash is the right platform for you, there are several alternatives to consider:
Robinhood
Robinhood is a popular investment app that offers commission-free trading and a range of ETFs and stocks to choose from.
Acorns
Acorns is another micro-investing app that allows users to invest small amounts of money into a range of ETFs.
Fidelity
Fidelity is a well-established investment platform that offers a range of ETFs, mutual funds, and investment advice from human financial advisors.
Conclusion
In conclusion, whether or not Stash is worth investing in depends on your individual financial goals and investment objectives. While the platform has many benefits, such as affordability, diversification options, and low fees, it also has some drawbacks, such as limited investment options and high expense ratios.
If you’re a beginner who wants to start investing small amounts of money, Stash can be a great option. However, if you’re an experienced investor who requires more personalized investment advice, you may want to consider alternative options. Ultimately, it’s essential to do your research, compare the features and fees of different investment platforms, and make an informed decision that aligns with your financial goals.
| Feature | Stash | Robinhood | Acorns | Fidelity |
|---|---|---|---|---|
| Minimum Investment | $5 | $0 | $5 | $0 |
| Fees | $1/month (<$1,000), 0.25%/year (>$1,000) | $0 | $1/month (<$1,000), 0.25%/year (>$1,000) | Varies depending on investment |
| Investment Options | 40+ ETFs | 2,000+ ETFs and stocks | 7,000+ ETFs and stocks | Thousands of ETFs, mutual funds, and stocks |
| Financial Education | Yes | No | Yes | Yes |
Note: The table above provides a comparison of the features and fees of Stash, Robinhood, Acorns, and Fidelity. The information is accurate as of the date of publication and may be subject to change.
What is Stash and how does it work?
Stash is a micro-investing app that allows users to invest small amounts of money into a diversified portfolio of stocks, ETFs, and other investment products. The app is designed to be user-friendly and accessible, with a minimum investment requirement of just $5. Users can invest as little as $5 into their chosen investments, and Stash will then pool their money with others to purchase fractional shares of the selected investments.
Stash offers a range of investment options, including individual stocks, ETFs, and themed investments, such as “Clean Energy” or “Robotics”. The app also provides users with educational resources and tools to help them make informed investment decisions. Additionally, Stash offers a feature called “Stock-Back”, which rewards users with a percentage of their purchase back as a stock investment when they make a purchase at a participating retailer.
Is Stash safe and secure?
Stash is a secure and trustworthy platform for investing. The company is a registered investment advisor with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). This means that Stash is subject to regulatory oversight and must comply with strict financial industry standards.
Additionally, Stash protects user accounts with advanced security measures, including 256-bit encryption, two-factor authentication, and secure servers. User accounts are also insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000, including $250,000 in cash claims. This provides an additional layer of protection for users’ investments.
What are the fees associated with using Stash?
Stash charges a monthly subscription fee, which ranges from $1 to $9 per month, depending on the type of account and the services used. The fee is waived for accounts with a balance of $1,000 or more. In addition to the monthly fee, Stash also charges a small management fee on investment portfolios, which ranges from 0.05% to 0.25% per year.
The fees associated with using Stash are relatively low compared to traditional investment platforms and brokerages. Additionally, Stash does not charge any trading fees, commissions, or other hidden fees, making it a cost-effective option for investors. It’s worth noting that the fees associated with using Stash are transparent and clearly disclosed on the company’s website.
Can I withdraw my money from Stash at any time?
Yes, users can withdraw their money from Stash at any time. There are no penalties or fees associated with withdrawing funds from a Stash account. Users can initiate a withdrawal through the app, and the funds will be transferred to their linked bank account.
It’s worth noting that Stash investments may be subject to market fluctuations, and the value of investments may decrease over time. Therefore, it’s important for users to consider their financial goals and risk tolerance before investing with Stash. Additionally, users should be aware that withdrawals may take a few days to process, depending on the type of investment and the user’s bank.
Is Stash only for beginners?
Stash is designed to be accessible to investors of all levels, including beginners. The app’s user-friendly interface and educational resources make it a great option for those who are new to investing. However, Stash also offers a range of investment options and features that may appeal to more experienced investors.
In addition to its educational resources, Stash also provides users with advanced investment tools and research, such as financial news and analysis. This makes it a great option for investors who want to take a more active role in managing their investments. Whether you’re a beginner or an experienced investor, Stash provides a flexible and customizable investment platform that can be tailored to your individual needs and goals.
How does Stash’s Stock-Back program work?
Stash’s Stock-Back program is a rewards program that allows users to earn a percentage of their purchase back as a stock investment when they make a purchase at a participating retailer. The program is linked to the user’s debit or credit card, and rewards are earned automatically when a purchase is made.
The Stock-Back program is a unique feature that sets Stash apart from other investment apps. It provides users with an easy way to invest in the companies they love and use every day, and can be a great way to build a diversified portfolio over time. The rewards earned through Stock-Back can be invested in a variety of assets, including individual stocks, ETFs, and themed investments.
Is Stash available for international users?
Stash is currently only available to users who are residents of the United States and have a valid Social Security number or Individual Taxpayer Identification Number (ITIN). However, the company has plans to expand its services to other countries in the future.
International users who are interested in using Stash can sign up for the company’s waitlist to be notified when the service becomes available in their country. In the meantime, there are other micro-investing apps and platforms that may be available to international users, such as Revolut or eToro.