151–160 of 207 posts
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I mean, average portfolio size for Robinhood users is probably in the $1k-10k range. How much does your 22 year old cousin care whether she pays $325.60 or $325.62 for a share of TSLA? For individuals it’s negligible, but for the HFT firms whose kickbacks make up most of Robinhood’s revenue, this adds up.
Yeah, worst case scenario use a limit
And despite having a small fraction on the market share and a small fraction of the markets available, RH raised at the same value as IB'S market cap. The only reasons I can think for this is that RH has a plan on how to become scummy like etrade, or SV doesn't know how to value brokerages.
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Reducing the free loan you provide to a bank with a checking account is good, but be very careful with leverage. IMO any leverage should be a very deliberate decision. 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…
You definitely raise a valid point, but as I mentioned in reply to a sibling comment, I do try to prepare in advance for big purchases like those by selling off stocks to pay those off in cash. I would never deliberately use margin as a financing option due to those dangers you mentioned.
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And this is what limit orders are for. Disclaimer: I'm a robinhood user, who also works for a large high frequency trading firm. You're spot on (well that and robinhood gold is how they really make their money).
I used to work with the founders, Vlad and Bijou. The are smart and very entrepreneurial guys. I actually assumed they were selling order flow. They have a ton of dumb money that many firms would die to interact with.
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Betterment, where you pay an extra quarter percent to buy Vanguard funds.
That's better than the alternative of not investing at all because Vanguard is not user-friendly. And I know that's possible because I have friends who were in that situation. If you sign up with Vanguard, you still have to pick which fund(s) to buy. If you don't know anything about investing, that can be a daunting task. With Betterment, the only decision you have to make is the percentage split for stocks vs. bonds…
This is literally what happened to me. I lost out on 20%+ in gains because I procrastinated a year after reading about how much Betterment fees eat into your gains. In hindsight the amount of money I missed out on was WAY more than any fee Betterment would have hit me with.
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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.
I really wish Robinhood supported DRIPs, I'd move to them in a heartbeat. It seems like such low hanging fruit for a brokerage, way less work than crypto trading. Just not sexy enough I guess.
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I have both Betterment and Vanguard accounts. I haven't bothered to consolidate yet because Betterment is trying to add value to justify the fee with features like tax loss harvesting, and I haven't decided if it's worth it or not. With regards to my friends though, my priority was to get them to invest in the first place, and the user friendliness of Betterment helped a lot.
Your friends can't exercise some level of long term financial responsibility unless they're presented with pretty graphics and a slick UI? The lack of financial education in the US really makes me sad sometimes. And it pisses me off that companies like RH will take advantage of that.
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Washington Mutual, Bear Stearns, Lehman Brothers, General Motors, Fannie Mae, Freddie Mac are all good examples of why you should avoid individual stocks, even if they are "blue chip".
Amazon, Alibaba, Mercado Libre, and Netflix are good examples of reasons not to avoid individual stocks. More than 90% of my investments go into index funds and 10% into individual stocks, but if hindsight was 20/20 it would be 100% into my individual stocks and I’d be retired on my own private island today.
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You definitely raise a valid point, but as I mentioned in reply to a sibling comment, I do try to prepare in advance for big purchases like those by selling off stocks to pay those off in cash. I would never deliberately use margin as a financing option due to those dangers you mentioned.
Your scenario meets the definition of 'using margin as a financing option'. It is the same as the overdraft option provided by credit cards, only it is more dangerous since in the margin call scenario they actually liquidate your stocks without asking you (if I recall from reading up on how this works at most discount brokerages a few years ago). The fact that you rarely do it helps some but as we know the thing abou…