Investment apps find an audience among college students

Joyleah Odom Reporter

College students might have the chance to see a representative from Robinhood on their college campus. In September, the online investing brokerage announced that they would be going on a campus tour. The visits will only be to select community colleges and HBCU colleges; however, this tour raises the question of whether investment apps are becoming a trend among college students. 

Junior finance major Cameron Brooks, the student analyst of Kent State’s Golden Flash Asset Management Club, said that using investment apps has become especially popular among his classroom peers. 

“Now that I am in class, even during lectures, it is not uncommon for me to glance around and see that there are people trading. It has been a very bizarre thing that’s happened,” Brooks said.

 For Brooks, these investment and trading platforms are not new to him. At 15, he had his first experience with cryptocurrency. 

“My first experience with cryptocurrency was when I was in high school,” Brooks said. “I actually got burned on that one but it opened my eyes to how much you can make and how much you can lose and then I became interested in NetCoin.” 

Assistant finance professor Marc Via said he noticed the same trend and decided to poll one of his classes. 

His results showed that 20% of his students said that they or a friend are using an investment app. He noted that a significant factor of these results could stem from many of them being finance students.

Still, Robinhood has seen a spike in its younger users in the last three years. The trading and investing app gained 3.1 million users and half of them were first-time investors. 

Robinhood was not always considered a big contender among online investing; that slot was usually given to the big four: TD Ameritrade, Charles Schwab, Fidelity Investments and E-Trade. Nevertheless, since 2017 when it had 2 million users, its numbers have spiked to 22.5 million as of this year. It was able to capture its users even during the pandemic.

 “The market was doing well before the pandemic, so people wanted to be a part of that,” Via said. “Of course, the pandemic sent stocks down for about a month, but after that, the market started doing well again, bringing in more users.” 

During this time, even without being the top online investing platform, Robinhood made a name because it offered $0 to deal with trade. Without the initial upfront fee, it appealed to more people.

“Robinhood was never known for boosting a lot of data. Never known for execution, speed, use, customer service – anything like that – its whole draw was for the young retail/investor,” Brooks said. “It was just a very simple and ‘free’ way to make money.”

With these platforms making it so easy for beginners to start, can students make money from these platforms?

Junior accounting major Grant Jackson noticed a pattern with how his peers used investment apps.

“People are not investing, they are trading. Where they just want to be day traders. They want to go to the trendy stocks; it’s not about the company whatsoever – like GameStop,” Jackson said. “GameStop goes up just because people pump it up.”  

Compared to other known online investment platforms, Robinhood appeals to first-time investors because it makes it easy for beginners. Students like Jackson enjoyed its layout and were able to make money from it and then even recommended it to other first-time users. 

However, he does not recommend that students use this as another source of income.

Via said that students interested in investing or trading should look into investing for the long-term and use the other big four online brokerage accounts because they have resources for learning. 

“If you want to trade, do your homework first,” Via said. “Use their resources to learn how to trade, and my best recommendation is to learn how to paper trade.”

Joyleah Odom is a reporter. Contact her at [email protected].