New Apps Teach Investing Basics

Summary

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WSJ Your Money Briefing – Episode Summary

Episode Title: New Apps Teach Investing Basics
Date: March 17, 2021
Host: J.R. Whalen (Wall Street Journal)
Guest: Julie Jargon (Family and Tech Columnist, WSJ)

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Overview

This episode explores how a new generation of investment apps are helping to educate novice investors, especially young people and even children, in the wake of high-profile trading frenzies like those involving GameStop. The discussion centers around the knowledge gap faced by new investors, the features of educational apps versus pure trading platforms like Robinhood, and practical advice for parents teaching kids about investing.

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Key Discussion Points & Insights

1. Recent Surge in Retail Investing Activity

• Stock market's recent run, viral attention around stocks like GameStop, and the resulting surge in first-time investors.
• Many new investors attracted by high-profile stories but lack core investment knowledge.

"The recent trading frenzy involving stocks like GameStop and AMC Entertainment has brought a lot of inexperienced investors off the sidelines and into the market in the hopes of making a quick profit."
— J.R. Whalen (01:43)

2. The Knowledge Gap in New Investors (02:10–02:37)

• Many first-time investors lack understanding of long-term investing and risks.
• Apps aim to teach users to think beyond day trading and quick profits.

"These apps are trying to teach young first time investors how to think about the market before they just jump in and start day trading."
— Julie Jargon (02:13)

• Emphasis is on long-term perspective and risk management.

3. Personal Stories: Learning by Experience (02:37–04:11)

• Julie interviewed two young siblings, both caught up in the GameStop frenzy with minimal prior knowledge.
  • The sister: Invested $3,000, withdrew at $10,000 profit, now wants to learn more before further investing.
  • The brother: At one point up $40,000, failed to cash out and settled for a $10,000 gain. Now diversifying and avoiding excessive risk.

"He said he texted his dad when he was up $40,000 and his dad told him to pull out of the stock and he didn't... Now he said he's put several thousand dollars into a managed account. He's still in GameStop stock... but he said he doesn't plan to be as risky in the future as he was during the GameStop stock frenzy."
— Julie Jargon (03:23)

4. How New Investment Apps Differ from Robinhood (04:11–05:05)

• Educational components built in—quizzes, analyst reports, risk warnings.
• Example: The Investor app lets users play a "fantasy finance game," simulating trades before risking real money.
• Investment clubs, performance tracking, risk exposure insights, and portfolio rebalancing alerts.

"People can create investment clubs, their own leagues and it kind of simulates trading and provides data on their investment performance and gives them detailed insights into their risk exposure and also gives them warnings if they're over concentrated in a certain sector."
— Julie Jargon (04:34)

5. Big Financial Institutions and Their Incentives (05:05–05:42)

• Many apps, new and old, are backed by major financial companies.
• The goal: Build brand loyalty among the next generation, who may prefer self-directed, commission-free trading over traditional brokerages.

"I think what they're hoping to do is build a new audience of investor."
— Julie Jargon (05:19)

6. Teaching Investing to Kids & Teens (05:42–06:22)

• Apps like Greenlight target children and teenagers.
  • Started as an allowance app, now includes educational content and allows parental-supervised stock trading (including fractional shares).
  • Analyst research and educational videos integrated.
  • Parental approval required for transactions.

7. Parental Guidance and Financial Literacy Advice (06:22–07:11)

• Use social media as a starting point, but encourage deeper research via credible sources.
• Trusted adults and reliable financial news are recommended.
• Key advice: Know the difference between investing and gambling.

"Don't confuse gambling with investing. You know, investing means doing your research and making careful decisions, not just rushing in to put money in the hottest stock that's being talked up online."
— Julie Jargon (06:59 & earlier at 00:45)

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Notable Quotes & Memorable Moments

• “Don't confuse gambling with investing.” — Julie Jargon (00:45; 06:59)
• “He said he texted his dad when he was up $40,000 and his dad told him to pull out of the stock and he didn't. ...Now he said he's put several thousand dollars into a managed account.” — Julie Jargon (03:23)
• "I think what they're hoping to do is build a new audience of investor." — Julie Jargon (05:19)

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Important Timestamps

• [01:43] – Context: Why new investors are entering the stock market
• [02:10] – How apps are addressing the knowledge gap
• [02:37] – Young investors’ stories of GameStop trading
• [04:14] – How educational apps differ from Robinhood
• [05:13] – Financial companies’ motivations for supporting these apps
• [05:51] – Apps designed specifically for teens and kids
• [06:34] – Expert advice for parents on teaching their kids about investing

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Tone & Language

The tone remains practical and accessible, in keeping with the Wall Street Journal’s mission to break down complicated financial topics for a general audience. Julie Jargon provides clear, real-world anecdotes and actionable advice. The host, J.R. Whalen, maintains an encouraging and cautionary approach, emphasizing both opportunity and the risks of uninformed investing.

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This summary provides a comprehensive overview suitable for listeners who want to understand the content and takeaways from this episode without tuning in.

Transcript

[A]

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[B]

Here's your money briefing for Wednesday, March 17th. I'm J.R. whalen for the Wall Street Journal. The market run up over the past year and the white hot performance of individual stocks like GameStop are luring more wannabe investors to put their money in. But investing in the stock market can be risky if you don't really understand how it all works. A new crop of investment apps is aiming to bridge the gap and teach novice investors how to navigate the market more wisely.

[C]

Don't confuse gambling with investing. You know investing means doing your research and making careful decisions, not just rushing in to put money in the hottest stock. That's being talked up online.

[B]

Our family and tech columnist Julia Jargon's been checking out these apps, including some that are geared to kids. We'll have more from her after the break.

[A]

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[B]

The recent trading frenzy involving stocks like GameStop and AMC Entertainment has brought a lot of inexperienced investors off the sidelines and into the market in the hopes of making a quick profit. You don't have to be a financial whiz to make money in the stock market, but but it's important to know some basic rules so you don't get burned. Our family and tech columnist Julie Jargan joins us with a look at a new generation of apps that are helping new investors understand the fundamentals. Julie, thanks for taking the time to be with us.

[C]

Thank you for having me.

[B]

So what is the knowledge gap that these apps are trying to close?

[C]

These apps are trying to teach young first time investors how to think about the market before they just jump in and start day trading. They're trying to teach them about long term investments and about really thinking about keeping their money in the market for the long term instead of just making these quick, fast trades that could result in significant losses.

[B]

Yeah That's a real thing. And you've spoken to people who use the trading app Robinhood without any prior understanding of the stock market. What was their experience?

[C]

So I spoke with a young woman in California who began trading and she had no priority experience trading, no formal knowledge or education in, in financial markets. But she got kind of swept up in the GameStop stock frenzy and decided to put in $3,000 and she ended up making approximately $10,000. In the end she got lucky. She got out in time to still come away with a profit. But she said that she, you know, before she invests any further, she wants to learn more about investing. And so for the time being, she has put her money, her earnings from the GameStop stock into a savings account. I also spoke to a young man, this woman's brother, who likewise invested a few thousand dollars in GameStop. He came out ahead as well and he said that it was an emotional rollercoaster. He said he texted his dad when he was up $40,000 and his dad told him to pull out of the stock and he didn't. He still was, came away with about $10,000 in profit, but it wasn't as much as he hoped to make. And now he said he's put several thousand dollars into a managed account. He's still in GameStop stock and he's also purchasing shares in some other small stocks. But he said he doesn't plan to be as risky in the future as he was during the GameStop stock frenzy.

[B]

So what do these new apps do that's different from Robinhood?

[C]

These apps are trying to provide more education either through the use of different quizzes, stock pick recommendations Financial analyst reports One app called Investor actually allows people to play a game, a fantasy finance game, to learn about investing before they actually put any real money into the market. People can create investment clubs, their own leagues and it kind of simulates trading and provides data on their investment performance and gives them detailed insights into their risk exposure and also gives them warnings if they're over concentrated in a certain sector. So the idea is that they will get real time data and information that will inform their investment decisions and alert them if they need to rebalance their portfolio a bit.

[B]

Now some of these apps have been around for a while, others are newer. A few of them are also backed by some pretty big financial companies. What are those companies hoping to get out of this?

[C]

I think what they're hoping to get is a long term base of investors, kind of the next generation of investors who want to do things differently. Than their parents and grandparents did. They don't necessarily want to go through stockbrokers and third parties. They don't like paying commissions on trades and having restrictions on the amount of money that they can put in the market. I think what they're hoping to do is build a new audience of investor.

[B]

Now it's not just people in their 20s who are getting into investing. It's becoming a hot topic among teenagers and even kids. How are these apps designed to teach them?

[C]

Yeah, there are some apps that are trying to go for that even younger market. One is called Greenlight. It actually started out as an allowance app that also comes with a debit card. And they recently launched a financial education and trading arm that allows kids to have access to analyst research notes and educational videos about investing. And then kids can also buy and sell stock within the app. They can buy fractional shares of stocks, but they have to have parental approval in order to actually complete a transaction.

[B]

Now, of course, the rules are very strict regarding accounts like these where kids are involved. And you spoke to some financial professionals who had some ideas for parents who want to teach their kids about investing. What kinds of things do they tell you?

[C]

One of the things which I thought was good advice was, you know, it's fine to learn about stocks through social media. That's the main source of news and information that younger people are getting. That's fine, but then take that and do your own research. You know, use credible sources of information, financial analyst reports, read financial newspapers, go to trusted adults who might be in a better position to provide advice. And also, you know, don't confuse gambling with investing. You know, investing means doing your research and making careful decisions, not just rushing in to put money in the hottest stock that's being talked up online.

[B]

All right, that's Wall Street Journal family and tech columnist Julie Jargan. Julie, thanks for coming on the show.

[C]

Thank you for having me.

[B]

And that's your Money briefing. I'm J.R. whalen for the Wall Street Journal.

[A]

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