Freetrade App Review

Back in May 2018,  I invested in Freetrade, a new stockbroker app, via CrowdCube.

It went on to become the most over-funded equity offering.

Anyway, after what felt like the longest wait ever, the app was finally available for download for Android today – here’s the Forbes’ announcement.

So, nearly a year after my crowdfunding investment, I have finally been able to download the app (after initially taking part in their beta-test). IOS users have been using the app since October so yes, I’ve been (im)patiently waiting all this time to try it out.

Search for stocks under ‘Discover’

What can I say, except that I can’t describe the feeling of being able to buy very small amounts of shares without being charged a trading fee!

The app is slick, responsive, simple yet aesthetically pleasing.

How will Freetrade make Money?

It operates a freemium business model, which anyone who plays ‘free’ games on their phones will be familiar with – you get a great basic app for free but if you want some bells and whistles, there’s a small cost.

In Freetrade’s case, basic buy/sell trades are all bunched together and executed for free at around 4pm on a working day. Great for someone like me who’s not bothered about price or timing the market.

However, if you want to buy/sell immediately, it costs a £1. For people used to paying £10-£12 per execution, this is a huge difference. Hell, I might even be tempted to part with the odd £1 occasionally for a quick sale/purchase!  Current pricing can be viewed here. At some point, Alpha accounts will be introduced, for a monthly fee, providing discount on instant trades and other services.

One of the reasons I’m more of a passive investor is because with conventional brokers, actively trading too much adds to high costs, eating into my gains.

These free trades or low fee trades are kind of dangerous.

My ‘test’ portfolio

How so?  The free/low cost trading might actually encourage some to over-trade, tempting people to buy/sell on a whim.

Or not. I guess it depends on what type of investor you are. At the end of the day, no big fees when you want to re-balance your portfolio or want to take advantage of some low prices, so definitely a win.

I think this app might well change the way I invest – previously, I waited for dividends to accumulate up to a minimum of £100 before I reinvested once a month (using my platform’s £1.50 regular investing facility).

With Freetrade, I will be able to invest when there’s just a few quid of dividend cash in the account, so my cash in the account will be invested a lot quicker.

Apologies that my cheap Android phone doesn’t do the app any justice in the screenshots as it’s only got a small screen.

You might get a better view of the screens here.

Android Compatibility

Speaking of cheap Android phone, the app is only compatible with Android version 7.0 and above. My current phone is on Android 6 so yes, I picked up a new basic handset just so that I could use the app! (thanks @Chris Perry for reminding me to add this to the post!)

What’s on Offer?

At the time of writing, ISAs were availabe for IOS users, priced at a fixed £3 per month (from July 2019 – it’s currently free).

ISAs should be available for Android users from next month and I will be setting up my 2019/20 ISA with them to see how it goes. I’m not sure if ISAs can be transferred just yet but it’s definitely in the pipeline.

Basic graph thingy…

At the moment, the choice of investments is nowhere near what you have available with say Hargreaves Lansdown, but pretty much all of the FTSE100 is available, much of the FTSE 250, many ETFs, a few investment trusts and also numerous US shares – FANG stocks anyone?

New stocks are being added all the time (albeit slowly) while the team concentrate on continuing to improve the app.

Topping Up

At the moment, the only way to top up my Freetrade account is by bank transfer (you have to link a bank account to the app).

Top up via Apple Pay is available for iPhone users and I believe other methods of topping up will be added in time.

So it’s not as handy as topping up via debit card which I’m able to do right now with my other platforms, but it’s no great inconvenience doing the bank transfer.

Google Play store is showing a load of one star reviews, received when the company made the decision a few months back to allow the app to be downloaded, only to place the people in a queue.

For people who read the blurb and were expecting this, fine; for those who didn’t and were expecting a fully working model, they one-starred it. Hopefully, there will now be better (and more accurate) reviews now that the fully-working model has been delivered. Apparently, there have been over 20k downloads already.

There is still plenty of scope for improvement and the Freetrade team continue to work on the development of the app to incorporate functionalities we’ve become used to with other brokers (eg ISA transfers, SIPPs etc) and other functions, such as being able to buy fractions of shares (US only). Here is their open product roadmap, documenting what they are working on.

I’ve not tried to do any research of stocks or other investments on the app – right now, I prefer to do my research from other websites, so improving this area isn’t a biggie for me but some users have mentioned that there wasn’t enough research/news material. All in good time, I guess.

Also, checking my portfolio on my phone is something quite new to me as I do pretty much all my investing on pc or laptop. Hopefully, this might mean that I won’t be too tempted to tinker…

One thing I’m really looking forward to doing is ultimately having my Dogs of the FTSE portfolio on here as it will be the perfect platform to run the experimental portfolio. I might even reconsider doing another Monkey Stocks portfolio – let me have a think about that!

Another thing I’m interested in, is seeing Freetrade added to Monevator’s broker comparison table – if I were a gambling woman, I’d put money on Freetrade being the cheapest!

Anyway, with Freetrade being FCA registered and investments being covered by the FSCS, I can’t wait to continue to build my portfolio using this app.

[Disclaimer – Aside from being an investor in the Freetrade company, I have no affiliation whatsoever with Freetrade (ie this is not a sponsored post) and this is not a recommendation to download the app (although, why not? 🙂 ). There are no referral links in this post]

2018 Goals + Bingo

Happy New Year to you all!

For those who work, I don’t know about you but this felt like the longest week ever in the office!

I have no idea what this year will bring but just hope that it will be interesting (bubbles and market corrections? Bring ’em on!), with a lot of good stuff and laughs in between! Oh and with me (and you) continuing to head in the right direction with our finances (bubbles and market corrections notwithstanding!)

Anyway, back to the main topic…Goals!

I only set a few goals last year and the focus on just those few worked well for me with little room for distraction so I’m going to do something similar exactly the same for 2018.

So without further ado, here they are:

Continue reading

Liar Liar

One of my goals for this year is to read three non-fiction books. I know that doesn’t sound like many but generally, I read books for enjoyment, not for education. Of course, the two are not really mutually exclusive but I’ve yet to find sci-fi investing books out there! 🙂

I usually read around 30-35 fiction books a year and I think 3 non-fiction is about all I want to attempt really.

Anyway, the second book I’ve read is ‘Liar’s Poker‘ by Michael Lewis.

Written and set in the 1980s, this semi-autobiographical book charts the rise and fall of investment bank Salomon Brothers (which ultimately became part of Citicorp in the late 1990s) and documents the greed, ambition and excesses of the people (including the author) who worked for the company and the bond trading industry.

Salomon Brothers made an absolute killing selling mortgage bonds to customers (including other banking institutions) who didn’t really understand what they were buying. In the days before the internet, the traders had all the info (and weren’t always truthful) and customers, fearful they would miss opportunities, would jump in with their money without doing their own research (yep, that old chestnut!).

The regulators were ineffective as they were always playing catch up on the new, inventive and complicated ways financial products were being structured to make profits. The bond traders and investment banks were unscrupulous and unrelenting in their greed, with no thought of consequences.

The amounts of money involved were jaw-dropping – it was scary to read about what the traders got away with, their audacity, the lies they told and how greed ultimately had businesses investing in things they didn’t have a clue in.

Big Swinging Dicks

All the traders aspired to be ‘Big Swinging Dicks’, the ones who made the most money and commanded the biggest bonuses. Yes, even the very few women who were able to fight their way past extreme gender inequality aimed to be a BSD!

Liar’s Poker

What was ‘Liar’s Poker’? It was a high stakes gambling game which the bond traders played, using bluffing and psychological tactics.

Anyway, I thought this was a good read (thanks for the recommendation, Jim), with a fair amount of humour and kept my interest throughout. I’d be tempted to read another of Lewis’ books. I know he wrote ‘The Big Short’ though having seen the movie adaptation, I may try one of his other ones.

What did I learn from this book?

Don’t invest in things you don’t understand and don’t be tempted by huge profits.

Have a great weekend all – it’s apparently going to be a sunny one! 🙂

Race to £200k

John Kingham who runs the UK Value Investor blog recently posted about aiming for a £1 million portfolio within 30 years and talked about the theory of doubling up.

I posted a comment and in his reply, he challenged me to see who will reach £200k first.

Of course, I accepted the challenge! 🙂

The Runners

In Lane Number 1JK’s Model Portfolio

John started his model portfolio in 2011 with £50k, which is made up of 30 stocks. Its aim is to generate more income and growth than the FTSE All-Share.

Through active trading alone (with dividends reinvested), this portfolio has since doubled, having had no extra capital added! Wow!

John’s strategy is that the least attractive holding is sold every other month and replaced with a new investment the following month.  He details his analysis and reasoning in a newsletter, which is aimed at defensive and dividend-focused value investors. The newsletter is subscription-only and includes a stock screen containing over 200 dividend-paying companies from the FTSE All-Share. There’s plenty of useful stuff to read on his website and blog too that doesn’t need a subscription.

I can confirm that I have met and spoken to people (at the last FIRE Escape gathering) who subscribe to said newsletter and whose investments have done extremely well by it, so yep, John knows his stuff!

In Lane Number 2: Weenie’s Future Fund

Yep, my mixed bag of a portfolio – it’s got a bit of everything! 🙂 Its aim is to provide me with income when I choose to retire early.

I practice a predominantly buy and hold strategy, drip-feeding capital every month, making the most of pound-cost averaging.

The amount I save/invest depends largely on my expenses and whilst I’ve got the basic costs buttoned down, as I’m not practising extreme frugality, things like social life, holidays and celebrations can sometimes get in the way!

Also there’s the amount I can earn from my side hustles, ie matched betting, cashback and affiliate income – I try to chuck all of that into the pot. Oh and any lotto or premium bond wins too!

You may recall that my Future Fund hit £100k recently. In total, it took me 8 years to reach this milestone – 5 years for the first £30k (when I had no plan), then 3 years to get £70k (with my plan).

I have only been investing for around 3 years so I can’t say that I know my ‘stuff’ but I seem to be doing ok!

Five Years

According to my own projections forecast spreadsheet, I reckon I could hit £200k in around 5 years. It’s possible I could get there earlier but this is my estimate, using conservative returns, whilst assuming that I will maintain an average savings rate of 40-45%. Hmm!

Over the last five years,  JK’s Model Portfolio achieved an annualised rate of return of 14.6%, so if at least the same return can be achieved, then it’s going to be a close competition!

Of course, it could take longer than 5 years and things could go pear-shaped for the both of us with the markets tanking, although with his strategy, John will be poised to ditch the rubbish shares and get some good ones in, while I will be trying to ignore all the noise and continue to chuck in my monthly capital regardless.

Different Strategies

I hope people will find this friendly competition interesting as it showcases different investing strategies.

This is all just a bit of fun but also another thing to keep me focused and motivated.

Ladies First

I think I’ve got a bit of a head start as I reached £100k before John did, plus I’ll be transferring the remainder of my severance pay into my Future Fund this month.

Still, I’m hoping that doesn’t mean I’m the Hare and he’s the Tortoise!

Actually, I feel more like I’m Rocky Balboa to his Apollo Creed, except this isn’t Hollywood so there’s no fairy-tale ending guaranteed!

Anyway, good luck to the both of us – let’s get ready to rumble!