On a sunny afternoon, I sat down with Dan Silver, Co-Founder and COO at Stake, to find out more about the emerging FinTech trading platform and how they were disrupting the status quo.
But before we explore what makes Stake special, let’s start with a bit of context.
Who is Stake?
Stake is a digital brokerage trading platform that allows people to buy and sell US shares. Created with the vision of making the US stock market more accessible and affordable, Stake seeks to challenge traditional, outdated ways of trading to create a world where borders aren’t a limitation.
With this in-mind, Stake provides a one-stop-shop single platform to make it easy for people outside the US to access the American stock markets, get local currency into the US or execute trades in a seamless, intuitive way.
Breaking Down Borders
Why should where you live determine where you invest?
Dan provides the example of someone who lives in Scotland but has ties to the US. Why should the fact that they’re in Scotland stop them from investing in US companies? As Dan put it, “borders should not be a limitation for how you deploy your capital.”
Many people are overly exposed to their local markets as they may own property or have shares in the local market. But being too invested in the local market prevents people from being able to diversify their asset base and access industries outside of their country. People shouldn’t need to be limited only to their local market.
Challenges & Opportunities of Investing in the US Market
Diversifying your portfolio comes with exciting growth opportunities as well as a degree of risk. Dan explained that anyone should be able to invest and it’s ultimately up to set up a portfolio based on their risk appetite.
Investing in companies outside your local economy creates exciting opportunities by opening doors to other industries and local regions and diversification can undoubtedly bring some strategic advantages, such as not being overly exposed to local industries.
The US market represents 40% of the world’s listed exchanges, which creates quite a big demand for access amongst investors.
Yet, on the other hand, the US economy has certainly been impacted by COVID with an astronomical number of people filing for unemployment. However, these economic challenges aren’t unique to the US with almost every exchange, seeing some impact from COVID.
US companies have more international exposure and have a significant online presence, so could arguably be better prepared to weather the current storm.
Dan, quite sensibly, explains that any economic downturn or disruption creates opportunities to gain as well as lose. Interest in the market is currently at an all-time high, with many people paying attention to stocks, watching companies closely and questioning what this means for them. People are watching as legacy companies go to the wall, while others thrive with online offerings or other innovations.
Advice for Getting Started During COVID-19
While the market uncertainty may at first seem off-putting, Dan stressed that now is a great time to engage with the market and start small. However, he encouraged people to only invest what they’re prepared to lose, especially since Stake’s minimum investment is as low as £50.
He also encouraged investors to focus on building their strategy, such as investing in companies they already know or who have a strong historical performance. It’s essential to do your research and use a strategy that suits you and your risk appetite. Building a robust strategy takes time, so now is an excellent opportunity to start that process.
When handled correctly, the market can be a great equaliser as investors are only going to improve and the best way to learn is through trial and error.
Stake is an excellent source of information for people looking to learn more about the market as they host regular podcasts with experts to find out their strategy, companies they’re watching and inspire the next generation of investors. Stake’s weekly round-up is also useful for seeing what’s happening in the market.
3 Companies to Watch Right Now
We, of course, had to ask Dan what companies were currently on his radar and who, if anyone had surprised him in their response to the current economic situation. Here are Dan’s recommendations on top companies to keep an eye on.
- Gilead. Gilead’s Ebola drug could potentially be used to speed up the patients’ recovery times from 15 days (standard) to 11 days. As a result, they’ve seen a huge inflow into that stock and claimed a place at the forefront of the fight against COVID.
- 3M. Despite an earlier spat with Trump, 3M has doubled production for the US market with lofty goals of creating two million masks per month from next month. While this is traditionally a product they provide, the speed they’ve been able to innovate is certainly impressive.
- Disney. Disney has risen to the current challenge of theme parks, cruises and other tourism operations grinding to a halt by launching their new subscription service. Disney+ has smashed market predictions and created a whole new, recurring revenue stream. Dan considers them one of the most surprising amongst the top companies to watch right now.