41–50 of 207 posts
Maybe that isn't their intended audience, though.
Contrast that to Wealthfront, Betterment, or Acorn - they're all built on the "buy and hold" philosophy. They use technology to automate allocation, tax reduction and rebalancing, while investing solely in index funds. How these two trends play out is fascinating to watch.
I appreciate the zero commission trading, but at the same time, I'm worried about the attitude towards "investing" that they promote. Most people should arguably be putting their money into index funds and holding for the long term[1], not picking individual stocks and following price movements on a daily basis. I wouldn't criticize anyone for speculating (i.e. gambling) with money they can afford to lose. I've done…
Earlier quoted context omitted.
Have you seen the vanguard ETFs in Robinhood? Would those be just as good as using the funds directly with vanguard?
Yes, better because the minimum is $0 not $10,000. It's not as good as Betterment/Wealthfront/Hedgeable because you can't rebalance, reinvest dividends, or get fractional shares.
I appreciate the zero commission trading, but at the same time, I'm worried about the attitude towards "investing" that they promote. Most people should arguably be putting their money into index funds and holding for the long term[1], not picking individual stocks and following price movements on a daily basis. I wouldn't criticize anyone for speculating (i.e. gambling) with money they can afford to lose. I've done…
you think they need a slap on the wrist for the attitude they promote? have you seen etrades recent ad campaigns? https://www.youtube.com/watch?v=yZ2Fa0zVglU
Crypto trading is the least notable reason why they are valued so high. Real reasons: 1) Large number of users 2) Large number of younger users (Millennials love Robinhood) 3) High amount of use per user (due to no fees) They are still a growth company. If they add IRAs (they said they would soon), Website (currently in closed beta), Options (currently in closed beta), and OTC (not sure if they will), then they'll li…
After using Schwab for both my banking and investments for more than a year now, I'm convinced that the most under-appreciated killer feature for a brokerage is actually cash management (i.e. a checking account you can pay bills from). Managing both my banking and investments at Schwab allows me to keep $0 in my checking account, and make use of their overdraft transfer feature to debit my investment account whenever…
If you buy a 30k car/tuition one day (depending on how much you have invested, this could be a lot of leverage!), and the market crashes by 50% the next day, would you be ruined? It's possible that even if the stock immediately recovers from some flash crash, you'll have insufficient collateral and the positions will be closed. (Locking in huge losses at the worst time during some irrational panic)
EDIT:
I suppose this is no more risky than buying something on a credit card, then selling a stock to pay off the card after a month. Still, Schwab can't get your credit card balance and close a position in real time, whereas they can with this leverage strategy.
I wonder if they're able to separate their cryptocurrency risk from the rest of their brokerage. I figure I'm insured to the $500k limit by their SIPC/FINRA insurance, but it'd be annoying if they lost millions of dollars of tokens and went out of business because of it. Or are they somehow insured against that risk? I'd find that hard to believe.
I imagine it's for the reason you stated until they get the security protocols in order. Not sure how they're getting around SEC approval, unless it's something sort of like an IOU loophole where you can only sell the IOU, but not redeem it for the coins yet per their terms of service?
I have no clue.
What people don’t realize is that these 0$ trading commissions just make it up in their routing of the transactions. You’re not going to get the best price. Use interactive brokers if you want a good price. Flat fee is higher but the trade routes are great.
IB doesn’t sell their order flow but they do take payment from dark pool operators & liquidity providers.
Earlier quoted context omitted.
After using Schwab for both my banking and investments for more than a year now, I'm convinced that the most under-appreciated killer feature for a brokerage is actually cash management (i.e. a checking account you can pay bills from). Managing both my banking and investments at Schwab allows me to keep $0 in my checking account, and make use of their overdraft transfer feature to debit my investment account whenever…
I am curious how much money you pay on margin a year using this scheme.
Schwab's margin rates are on the high side, starting from 7% and up, but even then if you're borrowing for 2 days at a time the cost ends up being negligible (about ~$1 for every ~$3000 borrowed). At the very least, it's much better than most overdraft fees/lines of credit. Though if Interactive Brokers were to offer a bank account, I'd be very tempted to switch with their amazing margin rates.