At Alty, we like to practice what we preach.
Previously, we’ve published a large guide about researching the target audience for your mobile app. And today, we’d like to turn it into a little master class and show the key reasons to build a stock market app.
That’s a potentially successful idea both for startups and established businesses. But words no more, let’s move on to the actual data, charts, and stats.
Why You May Want To Make a Stock Tracker App: Market Research
So, we are doing preliminary marketing research to help you decide whether this niche is worth pursuing or not.
Let’s assume we are targeting the US market as the investment and stock trading culture is pretty ripe there. Here are some stats to prove the point:
- 14.1 million of US citizens live in households that used an online investing/stock trading service within the last 12 months as for spring 2015.
- 52% of Americans have money invested in stocks.
IRA (Individual Retirement Account) is usually the most common option for personal investing and accumulating wealth through further investment in public stocks, bonds, mutual funds and other assets.
Here’s how much money Americans have on average in their IRA accounts:
So, it’s safe to assume that your target audience, in this case, are folks in their 30-40th, who are interested in increasing their existing financial assets to reach six-figures by the age they retire.
While there are a lot of IRA investing and broker companies, those not always operate in the client’s best interests. And that is also the case with the majority of financial advisors and brokers.
A recent research conducted by Andreas Hackethal and Michael Haliassos of Goethe University in Frankfurt prove that point with actual numbers:
Lower performance: Accounts, who have employed professional financial advisors have 5% lower returns (net of fees) compared to those who did not.
Imagine starting with a $100,000 portfolio, and receiving 7% of returns instead of 12% over the span of say 30 years, means that a negative difference of nearly $2.2 million. Not cool at all.
Lower risk-adjustment performance. A lot of investors and independent stock traders often mention that advisory companies like to play it “safe”. So, that should mean that the risks should be lower, right? Well, not exactly.
The research has discovered that advisor-managed accounts also had lower Sharpe ratios, which is a measure of performance, that adjust for the risks. In simple words – those using investors were compensated less for the risks they were taking opposed to those without advisors.
Acting In Their Own Interests. The rumors are that most advisory tools are designed to offer the best option for their company and the one that “suits” you as well. They are not obliged to offer you the best options available out there based on your interests, but rather to play it safe and in-line with their company’s guidelines and interests.
And this research had proved that these assumptions are indeed true. Advisory-governed accounts had higher turnover and were invested more frequently in mutual funds – an outcome that conveniently ears a higher commission for the advisors, but not for the clients!
So, we have an actual market problem here: traditional advisors do not always act towards the best client’s interests, and neither do guarantee the highest returns on investments.
This problem makes a great case for building an app for monitoring stock market. In that case, users could:
- Ping their advisors to make the right choice and adjust their portfolios.
- Take respective actions themselves on the go.
How Popular Are Apps for Investors and Traders?
Okay, so we do know that a lot of stock traders and investors are not completely satisfied with their portfolio management experience. If you speak to some of your potential clientele, you’ll be able to discover the full spectrum of their frustration.
This can explain the rapid rise of robo advisors – software programs and tools to manage personal assets. According to Bloomberg, by 2020 over $2.2. trillion of personal assets will be managed by robo advisory services.
So, here’s some more food for thought – apps and software do have a huge fan base among the investors. Your stock market investment app can not only feature a tracking tool but actually, suggest users when it’s time to sell/buy stock, offer detailed market analysis and pitch them the right decisions to make.
Next, let’s tap into Google Trends to analyze how often do people search for stock trading apps.
(growth curve for “stock trading app”, irregular but steady)
However, you do know that less than 5% of users actually search for apps in Google Search.
The healthy 47% of iOS users and 53% of Android fans tend to search for apps directly in the app store. So, let’s look at the data App Annie can provide us.
For starters, let’s have a look at the possible competition.
RobinHood – a Free Trading App
This app has made huge waves in the trading community and the press. In a nutshell, it simplifies stock trading by removing the need to open a blockage account and pay respective fees.
The iPhone app was featured on the iTunes Homepage and highlighted as a top suggested app 12 times. In 2015, they also won Apple Design Awards.
Bottom line: Want to develop a stock trading app – think how you can disrupt this highly-regulated industry with an unexpected freebie factor.
Stocks Tracker : Real-time stock, forex, and chart
If you are thinking about a simpler solution, which would also cost less to develop, how about building the next best app for tracking stock market?
That’s exactly what Stocks Tracker does, for instance. This freemium app has approximately over 30,000 downloads and currently ranks as #1 for the next keywords on app store: “portfolio”, “stock”, “stocks”, “trade”.
So, these were just the two possible app ideas.
Considering that we’ve started talking about building a stock tracking app, let’s wrap it up with the list of required app features and the development price.
Possible Stock Tracking App Features:
- Real-time stock data (duh).
- Multiple custom watch lists for different stocks.
- Real-time alerts on changes – can be created as push notifications.
- Different US Stock Options.
- Global Indexes & Currencies Overview.
- Smart Stock Screener to take better decisions.
- Stats on Futures & Commodities.
- Support for selected US/Global Brokers
- Exportable portfolios.
- Marker/User Stock Scan
- Market forecasts & market momentum indicators.
And these are just some of the features you may want to consider. To come up with the full list we suggest surveying your target audience a bit deeper and analyzing a larger scope of competitors to determine the initial set of features.
When it comes to stock tracking app development cost, it would be proportional to the amount of feature you plan to implement. For experienced developers creating real-time data integrations and updates won’t be an issue, yet creating and supporting multiple data streams may require some back-end programming magic ☺
The very approximate price to develop a stock tracking app can vary between $15.000 and $25,000 heavily depending on the functionality.
And if you’d like to get more details on the possible app UX/UI design, tech stack and development timeline, do get in touch with Alty team!