Beware online investment apps and ‘experts’

Remember day trading, the fad for retail investors trying to emulate the hotshots of Wall Street from their spare bedrooms, and losing much of their money in the process? It is back with a vengeance, this time driven by a range of ‘disruptor’ apps which seek to lure risk-hungry traders by eliminating the cost of buying and selling assets. This time, the bets are even bigger. Controversially, some apps offer traders the chance to ‘leverage’ their bets: that is to borrow money to increase their gains. Or losses.

The story of canny investors looking to outsmart the system — and the charismatic ‘experts’ that lead them — is as old as the market itself. Yet with social media and the rise of influencers, the market for alternative investment strategies (or, as some see them, get-rich-quick schemes) has grown bigger than ever. Much of it is driven by a wave of younger, inexperienced investors who are prepared to take investment advice from unqualified strangers on the internet.