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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

#71

Post by adrr »

wgerard wrote: post #26
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…

> 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…

Etrade, Schwab and Ameritrade have commission free ETFs. Or you can just go to Vanguard and there's no commission if you buy their ETFs on their platform.

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

#72

Post by lewisl9029 »

Blackthorn wrote: post #67
lewisl9029 wrote: post #50

Earlier quoted context omitted.

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.

Thanks! Just looked it up. It's really cool that they're moving in that direction.

Can you do bill payments directly from an IB brokerage account? I think that might be the final missing piece for me, but I'd love to be wrong about that.

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

#73

Post by adrr »

astrange wrote: post #28
AdenFlorian wrote: post #25

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.

Vanguard has a full robo-advisor which has more assets under management than all fintech robo-advisors combined.

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

#74

Post by ThrustVectoring »

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).…

IB has a debit card but no bank account, dunno if that's enough. You can also receive and initiate ACH transfers, but that doesn't pay credit card bills without routing through a checking account with bill pay.

What's stopping me from using IB is the $10/month commission minimum. It's waived at $100k account balance, so I plan on switching over then.

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

#75

Post by misterbowfinger »

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…

If Robinhood opened up an API, wouldn't it be possible to invest in a way that mirrors existing index funds? I'm not super familiar with the details but it feels like it would be.

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

#76

Post by dguo »

grahamannett wrote: post #53
dguo wrote: post #38

Earlier quoted context omitted.

That is true. I'm not saying Robinhood is all bad or can't be used in good ways. My concern is that overall, the product and marketing seem to be geared towards speculative, short-term trading. When I first signed up, the app was recommending that I check out stocks like Apple, Netflix, and Snapchat, not index funds.

I can understand why they guide people towards investing in "hip" companies versus an index fund, but regardless why is their so much animosity towards robinhood on HN? Is someone getting into investing and investing in an Apple/Amazon/etc. not overall a pretty good entry point compared to opening up thinkorswim or the pretty atrocious (at least on mac) schwab desktop client? Investing a small amount of money is bett…

I agree Robinhood is better than the incumbents in multiple ways. But at some time, other startups offer similar benefits while promoting an approach that is more likely to help the average person increase their wealth in the long term.

I don't think Robinhood is terrible. I just think someone who doesn't know what they're doing would be better off starting with Betterment or Acorns, which are just as user friendly as Robinhood.

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

#77

Post by adrr »

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.

Most ETFs support DRIP and the dividends reinvestment happens at the fund level.

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

#78

Post by jurassic »

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 web experience isn't great, I agree. But if you set up a recurring automated purchase you rarely need to log in and mess with it. Set it and forget it.

Viewed another way, I would say the Vanguard fund costs are low for a reason. It seems unfair to expect a Mercedes experience for a Honda worth of expense ratio.

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

#79

Post by twblalock »

logicallee wrote: post #70
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 fo…

I don't admire active investors. Most of them are going to get killed on commissions and fees and won't be able to compete with the professionals who spend all day, every day investing and have sources of information that aren't available to retail investors.

It's good that most Robin Hood investors are young and don't have much to lose. I hope they learn their lesson before they put they are old enough to put their retirement investments at risk.

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

#80

Post by dlp211 »

dguo wrote: post #64
wgerard wrote: post #61

Earlier quoted context omitted.

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.

Betterment, where you pay an extra quarter percent to buy Vanguard funds.
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