Not all online brokerage platforms offer the same services. Some are more geared towards established investors, while others approach marketplaces like a casino with dangerous leveraged derivatives. In the commercial republic, the stock market is seen as a solution to get out of the savings problem that brings nothing back to the individual. A vision that does much more justice to the interests of young investors.
To translate its considerations, the application has launched a very relevant new service, which it presents under the name of a programmed investment plan. It is geared towards the long term and tries to limit the risks with our money. It is also open to all profiles, regardless of the envelope you want to invest. An appropriate answer to an alternative to savings on savings accounts that are no longer useful?
A smart and free investment
In order to present its offer, Trade Republic uses an observation. “The French have to wait around 140 years until their capital has doubled with the Livret A (0.5% annual return). 60 years for life insurances 100% invested in euros (1.2%) but only 10 years with a diversified stock market portfolio (7%). The savings of the French deserve more than a Livret A ”, said Christian Hecker, co-founder of the platform.
Determined to grab the attention of its clients, Trade Republic has decided to offer its programmed investment plans with no commission or hidden costs. The purchase of stocks and ETFs via programmed investment plans is therefore completely free. But what are these plans made of? What’s the point of using this new service halfway between savings and investments?
In the Brokerage application, the programmed investment plans are automatic and recurring stock purchase programs (with a choice of 2,500 French and international stocks) or ETFs (exchange-traded funds numbered 1,150). Customers can determine the size and frequency of purchases based on the companies or ETFs they want to invest in.
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The processes are then carried out automatically (it is of course possible to deactivate them at any time). This enables users not to be fooled into giving in to the temptation to invest it all at once and in the same stake.
“If you don’t invest all of your money at once, but buy consistently for years, you will outperform 90% of the people who invest all at once,” Warren Buffett told the Berkshire General Assembly Hathaway back in 2004!
What are the benefits of a long term investment?
If you are interested in investing some of your savings in the stock market, it is important to understand the difference between short-term and long-term investments.
“Trading” as we know it is dedicated to positions ranging from a few minutes to a few hours. Long-term investments correspond to purchases over several months or even years. Special features for every case. One thing is certain, however: long term investing is not only successful in Warren Buffett, it is also the smartest way to conduct yourself for an individual.
The first benefit relates to the level of skill required to be proficient in the stock market. In the long run, you don’t need to follow mathematical models to determine the optimal time to buy and sell stocks. The question is whenever you can, within the limit of the capital that you can invest. Then you don’t have to focus on details that only have short-term effects.
For example, a crash with a Tesla on the autopilot can have ramifications for Wall Street for a few days. On the other hand, the results of deliveries during the year and the forecasts of the number of sales over five years in view of the development of the electric car market will be much more relevant indicators of the development of the price of long-term measures.
This is exactly what Trade Republic’s proposed investment plan is about. By buying stocks or fragments of a stock, the energy and knowledge required falls far short of what a verified trader would need. A recurring investment makes it possible again to eliminate short-term fluctuations and to put the long-term opportunities in your favor.
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“Today 80% of our customers in Europe have programmed one or more investment plans. We want to continue to develop products with which millions of Europeans can save and invest better in order to benefit from higher returns than those traditionally offered by their banking products, ”said Christian Hecker.
The trading republic has been present in France since January 2021. The platform, which was launched in Germany at the beginning of 2019, already had more than 150,000 customers on the Rhine after just under a year.