Ninety Nine, the 'Spanish Robinhood', boosts its user base by 500% due to GameStop fever and WallStreetBets
This is an automated machine translation of an article published by Business Insider in a different language. Machine translations can generate errors or inaccuracies; we will continue the work to improve these translations. You can find the original version here.
The market is changing. More and more people have the ability to access it.
Part of the blame for this greater hunger for the stock market lies with some brokers that have arrived to try to democratize investment with reduced commissions. This is the case of Robinhood in the United States and Ninety Nine in Spain.
Business Insider Spain interviewed Ninety Nine’s CEO, Javier Sanz, to assess the commitment to democratize investment, the growth of the platform in recent times and the investment trends of millennials through the app.
The latest movements caused by WallStreetBets from the Reddit community have completely altered the panorama. So much so, that Sanz claims they have had a growth in their user platform of 500% in the last week. “We have had a 40-50% growth in the last in the last few months maintaining a strong presence of millennials and a large part of them, almost 40%, had never invested before, so we are getting very close to our mission of improving people’s relationship with money,” he says.
However, this increased interest in moving money into the markets has no correlation to the increase for risk appetite. “We’re actually seeing less risk,” Sanz explains.
The Ninety Nine CEO highlights that investors on his platform are taking a more cautious dynamic. “Unlike everything that is being published in the media with GameStop that the stock market is a casino, it is quite the opposite, because when we presented the first report, the average money that users had spent on the platform was much higher than it is now, which shows that despite the fact that there are more users and more opportunities, there is more reflection when it comes to placing bets,” he comments.
Learn how to invest your money and beat inflation
Sanz adds that the dynamic has changed. Now there is greater prudence. “You used to see users investing in Tesla’s split , only to rotate to other companies soon after, and now you don’t,” he begins.
“At present you see that there are people who invest their money in those opportunities, but stay with them… In fact, I would tell you that 85-90% of our investors are focused on the long term,” he stresses.
And what is the user profile like on a platform such as Ninety Nine, which can give clues as to what is happening on the stock markets? Sanz specifies that the average account would be around €1,200 to €1,500. “There are users who have from 50 euros to much higher accounts, although the average profile has those numbers,” he explains.
The debate over Robinhood’s restrictions on investor trading: Ninety Nine has already halted traders’ trades
Another debate that has emerged in the current scenario is the measures that some brokers have taken to restrict trades in the face of the volatility caused in the markets by the rise of WallStreetBets.
In this regard Sanz recounts that Ninety Nine has already blocked trades from people who were jumping the limits. “What we aim to be is the most transparent platform and we put the values and money of our users above all else, because if in the end they lose money, they will leave the platform and will no longer be clients,” he stresses.
For example, Ninety Nine’s CEO says that a student who is unemployed and says he has an income of less than €10,000 has some limits on trading, while a user who in the registration process says he has €13,000 average income has other caps. “We have more than 500 limits that are adapted to each user profile we have and that will protect their interests,” he adds.
Savings accounts are a thing of the past: the democratization of investment will continue to grow.
The way of approaching investment is undergoing a revolution among small savers. For Sanz, savings accounts are dead. “The idea that you stayed with the same bank all your life is gone, because now the idea of the bank moving your capital in exchange for interest doesn’t make much sense,” he says.
Why it’s better to invest your money rather than keep it in the bank
But he goes further, bearing in mind the recent events that have hit the markets: “I think that an investment account where you don’t invest wildly, you don’t bet on companies like Gamestop, and you do invest in consolidated companies, is more positive than opting for traditional savings accounts“.
Millennials’ investment shift: Tesla, Apple and Nvidia, the companies of choice
The pandemic has affected all sectors, including the stock market, which has seen large falls, but also significant rises. This has encouraged, more than ever, Spaniards to invest in international stocks, especially millennials, and they have done so in the hands of the brands that are most fashionable or that they know for their consumer habits: Tesla, Elon Musk’s electric car manufacturer; the American and well-known Apple and NVIDIA, the integrated circuit supplier.
This is reflected in the second edition of the Millennial Investment Report, prepared by Ninety Nine with the aim of improving people’s relationship with money and after studying the international stock investments made by its users during the last quarter of 2020.
“This generation is particularly active in using financial technology and managing their own finances. Heir to one of the biggest financial crises in history, they are fully aware that investing is something vital for financial planning not only for their present, but for their future,” Sanz points out.
things you need to understand about investing to make money in the stock market
“They are very up to date with everything around them, so it is not surprising that in the last quarter they have bet on sectors such as technology, pharmaceuticals or automobiles, focusing on new electric mobility companies,” adds the CEO of Ninety Nine.
In the last three months of the year, investment trends changed compared to the third quarter of 2020. While Tesla and Apple continue to occupy the top positions in millennials’ investments, e-commerce company Amazon, technology company Microsoft and one of the most well-known pharmaceutical companies for its vaccine against COVID-19, Moderna, have been ousted from the top 5 of millennial investment.
As this report shows, this generation now prefers to invest instead in NVIDIA, which is in third place in the ranking, followed by the company specialized in genomic analysis and genetic diagnosis, BioNano Genomics, and the Chinese company NIO, focused on the development of electric and intelligent vehicles.
Source: Read Full Article