Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

techcrunch.com

Post reply on HN
Print view View original

81–90 of 207 posts

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

#81

Post by dguo »

misterbowfinger wrote: post #75
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.

It'd be possible, but you can buy index funds on Robinhood already.

Other services that are built around long term investing provide additional features like automatic rebalancing and dividend reinvesting. An API could allow you to emulate those as well, but at that point, it seems like you might as well just use a robo-advisor instead of building your own on top of an API.

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

#82

Post by Blackthorn »

lewisl9029 wrote: post #72
Blackthorn wrote: post #67

Earlier quoted context omitted.

> 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.

No idea, sorry :-( I don't use any of those features, I just trade. I don't even use bill payment on my regular checking account.

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

#83

Post by vasilipupkin »

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.

Their own ETFs - yes. But still a fee to buy other ETFs that aren't their own.

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

#85

Post by zanny »

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…

> If you want security, why invest in anything other than the government?

Because you make more money in index funds with comparable security?

Bonds used to be the principal way to save and invest in the past when interest rates were much higher. Its honestly a bit of a shame that as a society loaning money to the government is such a poor investment - it more reflects on the failings of the state if there is literally nothing profitable they can do with money to justify a competitive return. States can do pretty much anything a company can and more, and in a perfect world would be the best managers of capital. Thats where concepts like single payer healthcare come from, after all.

And add to that that not everyone wants to be a capitalist. Index funds are specialization of labor - let the teachers teach and the doctors save lives while their money is invested and managed by people who are good at tracking markets.

That being said, financial advisory in general is adjacent to such prestigious professions as televangelists and online poker in my mind - the most successful in the business have almost no correlation with actually sane analytical expertise and more to do with who can advertise the best. Fundamentally it is all making educated guesses, and until shit hits the fan people flock to whoever boasts the most rather than whoever is nuanced and rational, at least until after a stock crashes or a market tanks.

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

#86

Post by vasilipupkin »

adrr wrote: post #73
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.

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

Vanguard has no robo advisor. There is a human advisor involved

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

#87

Post by Blackthorn »

nicholas73 wrote: post #18
bobcostas55 wrote: post #8

Earlier quoted context omitted.

Not really, just because they're selling order flow doesn't necessarily mean the customer gets a worse deal. Robinhood still has to follow reg nms, they have to fill you at the NBBO.

But is their NBBO worse than other firms (worse routing options)?

That's literally a contradiction. Look up what NBBO actually means.

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

#88

Post by dlp211 »

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…

If that's your attitude, you should only buy corporate bonds and IPO's.

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

#89

Post by Blackthorn »

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 same as literally any other brokerage.

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

#90

Post by ThrustVectoring »

lewisl9029 wrote: post #23
asdsa5325 wrote: post #17

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…

I think the ideal cash management setup is to get a rewards checking account without a debit card usage requirement (harder than it sounds to find), direct deposit your paychecks into that, have a 1-2 month cash buffer there, and invest the extra through ACH pulls out of that. If your portfolio is large, having a month of expenses earning 1.75% or whatever risk-free is likely a small improvement. If your portfolio is large, the lower return on a small portion doesn't matter. If you portfolio is not large, you should have a larger cash position to de-risk your overall life.

You might also be able to mail checks written against a brokerage account with that option enabled, but mailing checks sounds like a pain. I know that Vanguard's brokerage account allows both check writing (with a $250 minimum) and direct deposit, but that doesn't quite do enough for running your life out of one account.

>whenever I make a purchase or bill payment from it

FWIW, if you have access to credit cards, you should pretty much always use a credit card rather than a debit card.

Post reply on HN