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Stock trade app Robinhood raising at $5B+, up 4X in a year

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Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#61

Post by wgerard »

jcdavis wrote: post #34
wgerard wrote: post #26

Earlier quoted context omitted.

> Most people should arguably be putting their money into index funds and holding for the long term I think Robinhood is great for that! Zero commission means you can afford to buy small amounts without worrying about fees eating into your principal too much. You can put in $250 every pay period and buy a share of $SPY without losing ~3% to fees. With commissions involved you'd want to wait until you could afford a l…

Vanguard charges no fees for buying/selling their owns ETFs. I believe Schwab and others do as well.

True! That being said, using the Vanguard website is... significantly different from using the RH app.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#62

Post by lawrenceyan »

nerfhammer wrote: post #20
lawrenceyan wrote: post #7

Earlier quoted context omitted.

That's only true in the most technical of senses. Yes, there is a spread, but other brokerages take a spread AND additionally charge you another fee on top of that which is often an outrageous $5-10.

depends, how big is the spread?

The spread is generally on the order of a cent.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#63

Post by Scoundreller »

tanderson92 wrote: post #58
astrange wrote: post #28

Earlier quoted context omitted.

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.

You can rebalance and reinvest dividends at Vanguard.

Does the amount of dividend need to be the cost of one share?

If so, with VTI trading at $140, you would need about 250 shares to buy a share with each dividend.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#64

Post by dguo »

wgerard wrote: post #61
jcdavis wrote: post #34

Earlier quoted context omitted.

Vanguard charges no fees for buying/selling their owns ETFs. I believe Schwab and others do as well.

True! That being said, using the Vanguard website is... significantly different from using the RH app.

The Vanguard website/experience is definitely not that user-friendly/modern. That's the main reason I usually recommend Betterment to my friends instead.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#65

Post by tanderson92 »

Scoundreller wrote: post #63
tanderson92 wrote: post #58

Earlier quoted context omitted.

You can rebalance and reinvest dividends at Vanguard.

Does the amount of dividend need to be the cost of one share? If so, with VTI trading at $140, you would need about 250 shares to buy a share with each dividend.

No.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#66

Post by dguo »

Scoundreller wrote: post #63
tanderson92 wrote: post #58

Earlier quoted context omitted.

You can rebalance and reinvest dividends at Vanguard.

Does the amount of dividend need to be the cost of one share? If so, with VTI trading at $140, you would need about 250 shares to buy a share with each dividend.

No, they allow fractional shares. Source: https://investor.vanguard.com/investing/brokerage-dividend-r...

"When reinvesting dividends, Vanguard Brokerage Services combines the cash distributions from the accounts of all clients who have requested reinvestment in the same security, and then uses that combined total to purchase additional shares of the security in the open market. Vanguard Brokerage will attempt to purchase the reinvestment shares by entering a market order at the market opening on the payable date. The new shares are divided proportionately among the clients' accounts, in whole and fractional shares rounded to three decimal places. If the total purchase can't be completed in one trade, clients will receive shares purchased at the weighted average price paid by Vanguard Brokerage Services."

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#67

Post by Blackthorn »

lewisl9029 wrote: post #50
jtchang wrote: post #31

Earlier quoted context omitted.

I am curious how much money you pay on margin a year using this scheme.

Had to look it up, but I paid a bit under $5 in total last year. Mostly towards the beginning of the year when I didn't have my bills set up properly (i.e. the timing didn't match my direct deposits at first, had to make some calls to change that) and from some large ticket purchases that a single paycheck couldn't fully cover (with sufficient planning those could have been avoided if I sold some stocks beforehand).…

> Though if Interactive Brokers were to offer a bank account, I'd be very tempted to switch with their amazing margin rates.

IB just started offering some kind of debit card. I don't use it, but I keep getting notifications from them about it.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#69

Post by Blackthorn »

justonepost wrote: post #27

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.

> You’re not going to get the best price.

That's FUD (and I'm an Interactive Brokers user). That sort of routing flashes your trade to groups before it hits the exchange, and they have the option to take it. By regulation they can only take it at or better than top of book price. If they don't take it, it will hit the exchange.

Look, Interactive Brokers is a great brokerage. Very usable software and API, best in class commissions and margin rates, and you get direct routing and their smart router works pretty good too from what I understand. But don't oversell it by bashing RH.

Re: Stock trade app Robinhood raising at $5B+, up 4X in a year

#70

Post by logicallee »

dguo wrote: post #19

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…

Index funds aren't just boring, there is something morally abhorrent about simply investing in everything that has done well enough to be in an index fund. At that rate, why not invest in government bonds, given that the government gets whatever share it wants of literally every penny that goes through commerce in any capacity? If you want security, why invest in anything other than the government?

I admire people for investing their money actively instead of in an index.

It is the closest you can come to the capitalist spirit without actually doing anything. (Not a slight - not everyone needs to "do something" in the sense of starting a business - but being an active investor is very close to the same.)

Actively investing takes guts and a kind of entrepreneurial risk-taking.

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