As costs of living rises and inflation takes a toll many Aussie investors are looking for value when it comes to share trading platforms but moomoo warns to read the fine print.

The Australian chief market strategist of moomoo Matt Wilson reckons share trading platforms are one of those services where the adage ‘you get what you pay for’ applies.

Wilson said millennials, the generation where trading platforms are proving particularly popular, are used to getting tech products for what appears to be ‘free’.

However, he said there are often charges associated with these products, even those users may not directly pay themselves.

“Many things that are advertised as free aren’t actually free – users are paying somewhere,” he said.

“History of share broking in Australia shows us that offering free brokerage on share trades can’t make a company money.”

He said many have gone broke trying to offer free trading as a client acquisition strategy.

“You will get some clients but then what?” he asks.

What you want out of a platform?

Wilson said traders of course want value for money but ultimately need a platform that is continuously being upgraded, provides tools to help discover  shares to trade and identify opportunities.

“The free or cheap brokerage models don’t provide these tools and often clients feel duped that their chosen platform has minimal features,” he said.

“Or they feel cheated by the hidden costs when they become apparent later.

“Wilson said given the number one question from relatively new investors is what shares to buy and any platform that can’t help in finding those shares isn’t worth using.

“On the other hand, paying a high commission makes it difficult for active traders to make money consistently,” he said.

So, what’s that answer? 

Wilson said investors must find a trade-off between low brokerage and a platform that is technologically advanced enough to help find the right shares to trade or invest.

While moomoo brokerage on trades is among the lowest in the market the company prides itself on its superior tech.

“Our technology is being constantly upgraded with around 70% of our 2,400-strong workforce in IT development,” Wilson said.

Its AI-powered platform has many free stock screening tools and institutional grade features that you simply cannot get on other Australian platforms.

“On moomoo, users can look at what the world’s best investors are buying and selling using moomoo’s institutional tracking tool,” he said.

“They also have access to moomoo’s hundreds of customised screening tools to filter their desired stock attributes, including earnings, dividend, industry, volume, market cap and turnover.”

Source: moomoo


Volatility: risk or opportunity?

Wilson said while some investors may consider current market conditions too volatile, there remain many great opportunities.

He said investors simply need the right tools to find and monitor stock opportunities.

“A strategy that has stood the test of time is finding a well-managed company that has good market share and that’s products have good pricing power,” he said.

“Measuring that company against its peers and other industry drivers, should set you up nicely.”

Wilson said once an investor has zeroed in on several stocks, they should watch how they trade, the volume that is traded and whether they are delivering on their stated goals.

“If you are confident the share price is reasonable enough to generate a relative return on investment, then you can start to step up your investment over time,” he said.

Wilson said  you don’t have the time to do that amount of research, then perhaps you can look at an Exchange Traded Fund (ETF).

“These are themed funds based on an equity index or an industry such as mining, consumer products, energy, or technology, and can be easily bought and sold on the US and Australian stock exchanges,” he said.

This article was developed in collaboration with moomoo, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.