Investors trading via apps buy more riskier stocks

Research from a team at Frankfurt’s Leibniz Institute says that it’s still important to tread warily, even when you’ve got the investing power of a small dealing room sitting in the palm of your hand. The research found out that a move to app-based trading can do investors more financial harm than good if they’re not careful.

The researchers tracked the transaction of 15,000 customers of two large German retail banks over several years. They discovered that, when people placed trades via a mobile app, they were 8% more likely to buy riskier stocks than when they bought via a computer.

Deals placed via apps were also 12% more likely to be for past winner stocks, those that had enjoyed a recent surge. The report concluded that the findings caution against the indiscriminate use of smartphones as the key technology to increase access to the financial markets.

Sven Franssen