In an era of working from home, some students are making financial gains through investment apps, but the ongoing COVID-19 pandemic has presented challenges even for the market-savvy.
As students navigate online day trading platforms in their spare time, the stock market continues on an unpredictable trajectory as businesses face closures and other financial obstacles in the wake of a national crisis.
Aaron Moore, a senior majoring in accounting and finance, uses the trading app TD Ameritrade as a platform to assist him in making important decisions on long-term investments.
“I’m not necessarily a day trader in the sense that you’re in and out in a day –– I look more like five days to a month horizon,” Moore said.
Day traders are investors who buy and sell stock on the same day.
Using a scanner, a tool used to scan the market to find stocks, Moore creates a set of criteria for the scanner to find when choosing which stocks to invest in, he said.
“Every day (the scanner) makes a list of probably 25 stocks that meet the set of criteria that I’m looking for,” Moore said. “I use that and do some more fundamental looks at it to see if it's something I want to buy into.”
Moore said he is using the knowledge from his classes he has taken to help make potential investments.
“Last year I was in fixed income security and this year I’m in portfolio management,” Moore said. “Those (classes) are great because a lot of it points you in the right direction and then you have to go and figure it out.”
Moore has made around a 10% average return in a month, which he considers to be pretty phenomenal given what the market does on average in a year, he said. The average stock market return is around 9.2% according to Goldman Sachs data showing trends over the past 140 years.
As a beginner at selling and trading stocks, Moore creates his account based on specific goals, figuring out the necessary information before buying into stock, he said.
Lucas Camerlingo, a sophomore majoring in communications, began daytime trading at the start of the pandemic using Robinhood, an investment and trading app.
Robinhood garnered three million new users in the first quarter of 2020, according to Bloomberg.
Robinhood’s user interfacing was easy to use and was an effortless way to make money as a college student, Camerlingo said.
“My roommate and I wanted to get into stocks and Robinhood seemed like the easiest way to do it,” Camerlingo said. “As a college student who wasn’t really making much money, investing was a passive way to make money, in the sense that you can just put money in and make a profit easily.”
Camerlingo put $100 in stock investments to get started and joined a Discord chat quickly after to know which stocks to invest in. COVID-19 has increased the stock market’s unpredictability, making it difficult for users to strategize important decisions, Camerlingo said.
“Before the pandemic hit, it was a relatively stable market compared to what it is now,” Camerlingo said. “Now it’s to the whims of the disease.”
In March, global markets saw dramatic losses as nationwide lockdowns were implemented and unemployment rates rose. This year, the Dow Jones Industrial Average index reported some of the biggest single-day gains and losses of its history.
The market’s unpredictability causes obvious risks, Camerlingo said.
“I stopped (daytime trading) because it’s a very volatile market, it’s like gambling,” Camerlingo said. “You don’t know if it might go sideways, which if it does you’ll get clowned on, or if it goes down you’ll get clowned on. And if it goes up you’ll make a profit, but it’s basically two against one.”
Camerlingo now invests the capital he has made into long-term stocks.
“I probably made around $500, I put in $300 and I got that in return in investments, and so I made in total like $700, with all my capital and everything,” Camerlingo said. “I’m investing in long term stocks now, I just needed capital to invest in so I could get some money.”
For Corey Shock, a senior majoring in financial management and investments, the pandemic acted as both a negative and positive catalyst in deciding which stocks to invest in.
At the start of the pandemic, there was a big boom in technology stocks, Shock said. However, these stocks shortly took a hit as public spaces that use technology began to close in response to stay-at-home orders. Investors did not start going back to technology stocks until business had plummeted at restaurants and other public spaces, Shock said.
Shock began investing in stocks after receiving high school graduation money. Since his graduation, investing has become a part of his daily routine, he said.
“I’ve been doing it for so long it's kind of like I just wake up and I go to see things that are undervalued,” Shock said. “I'll buy it and by the end of the day I'll either sell it or buy it and literally five minutes later sell it.”
Aside from day trading, Shock said he also has a long-term account in which he will put the profits he makes from day trading into.
“I normally take 50% of what I make on my day trades and I put in my long term and keep 50% in my day trade accounts,” Shock said.
Building up an account goes beyond just picking and choosing stocks. You have to piece together information and self-study is important, Moore said.
“Really it’s about discipline and money management,” Moore said.