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The stock market has a way of schooling people who think they have this investing thing all figured out.

Young people using free stock-trading apps such as Robinhood in the United States and Canada’s Wealthsimple Trade may soon have their turn. They’re been trading up a storm lately and generating all kinds of snarkiness about their investing naiveté and the extent to which it’s being exploited.

Without a doubt, there is some foolish trading going on with these apps. But it’s nothing we haven’t seen before, and we will see it again as long as there’s money to be made in stocks. The tech stock bubble of 20 years ago, starring Nortel Networks, is one previous example that stands out.

The more interesting story in these apps is how a generation of young adults has been engaged in stocks and investing in an unprecedented way. If the investing industry can get them on a more sustainable track for long-term investing success, then this is a huge win.

Wealthsimple Trade and Robinhood are apps for mobile phones that let you trade stocks and exchange-traded funds for free. Wealthsimple Trade makes money through the 1.5-per-cent currency-conversion fee charged when clients trade U.S.-listed securities, while much of Robinhood’s revenue comes from other parties who pay the app for routing them client trades for execution.

Trading apps target young people with platforms that are easy – and kind of fun – to use. Wealthsimple Trade says its average client age is 29.

This near-gamification of investing has led to criticism that trading apps are irresponsible in the way they dump people who may know nothing about investing into a predatory stock market. CNN has reported that the family of a Robinhood client says he died by suicide after some confusion about how much money he owed in an account where he traded options. Robinhood has said it is making changes to its interface as a result.

Since COVID-19 hit earlier this year, the investing landscape has been distinctly odd. Stocks plunged then powered right back while the pandemic raged. Many investors have been stunned into paralysis or a preference for safe cash, but young people have been throwing themselves into the markets with abandon.

Wealthsimple Trade has gone from 25,000 users last July to about 180,000, while Robinhood has about 13 million users. In a year of massive social change, here’s one more: The stock market, home to the affluent, has been invaded by hordes of non-wealthy Gen-Z and millennial investors.

These investors tend to have small accounts and big appetites for trading; Wealthsimple Trade reports an average of three trades daily by users. Some of Wealthsimple Trade’s most heavily traded stocks in late June were Air Canada, Tesla Inc., Toronto-Dominion Bank, Apple Inc., Suncor Energy Inc. and Cineplex Inc., which is to say a mix of blue-chip and speculative shares. Robinhood clients have been criticized most recently for going big on Hertz Global Holdings Inc., the bankrupt car-rental company.

Trading apps have teamed up with conventional online brokers to give new life to day trading, an investing fad that boomed and went bust in the dot-com era along with tech stocks. A lot of young day traders are going to have their butts handed to them. Why don’t they know better?

One reason is the hothouse atmosphere created by the pandemic – people stuck in their homes, feeling stressed about money, looking for amusement and financial gratification. In a rising market, day trading through an app is escapist entertainment.

There’s an economic driver to all this trading as well. In financial literacy sessions on university and college campuses over the past 10 years, I’ve seen young adults ask over and over about how to score big in the stock market. It’s a natural question to come from a cohort that feels stifled financially by a job market where full-time jobs, raises and career advancement aren’t easy to come by.

Technology also attracts young people to trading apps, which stand out for making stock trading easier than ordering a pizza. The traditional investing industry can’t shake its Internet 1.0 mindset, and many online brokerage firms still plod along with online stock-trading platforms that look like an Excel spreadsheet.

Stock-market rallies and investing fads all end, and they often end ugly. Can trading apps redirect their obviously clever technology to help clients become investors instead of traders?

Don’t rule it out. After helping more than a few investors blow a fortune in the tech-stock boom, online brokers successfully pivoted to mainstream investing. Trading apps will either grow up or blow up.

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