171–180 of 207 posts
It looks that the RH Financial LLC is good enough capitalized but I wonder why they split up into 3 different entities? Or is that usual practice?
The latest SEC filing for RF Financial: https://www.sec.gov/Archives/edgar/vprr/1701/17016683.pdf
Their pr message is priceless but a sham. The users are the real product, with all that we know goes with that.
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…
For some perspective. My uncle (retired from the Air Force) got into stocks in 1998. He did not tell my aunt until around 2002. He lost around 200K of their retirement because he was unwilling to accept loss. He is still at it and has moved on to day-trading and is doing just as bad. It is a addiction and he does not use Robinhood. I was living with my sisters kid and set him up with a Robinhood account and stuck a f…
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…
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…
Earlier quoted context omitted.
For some perspective. My uncle (retired from the Air Force) got into stocks in 1998. He did not tell my aunt until around 2002. He lost around 200K of their retirement because he was unwilling to accept loss. He is still at it and has moved on to day-trading and is doing just as bad. It is a addiction and he does not use Robinhood. I was living with my sisters kid and set him up with a Robinhood account and stuck a f…
While it may be helpful to make the stakes real for your nephew, there are fake/paper trading accounts available at many brokerages.
Earlier quoted context omitted.
> Most people should arguably be putting their money into index funds and holding for the long term Fidelity’s internal survey revealed that best performance correlated with low account activity http://www.businessinsider.com/forgetful-investors-performed...
The vast majority of that is due to transaction fees/commissions, which RH doesn't have. I would still expect this to hold up even on a zero-commission basis, but the effect would be significantly diminished.
On a side note, zero-fee instruments are not that rare for brokerages nowadays. Fidelity itself lists 3,691 mutual funds https://www.fidelity.com/fund-screener/research.shtml and 93 ETFs https://www.fidelity.com/etfs/overview as fee-free, and I think they're not even the leader in the space.
Earlier quoted context omitted.
For some perspective. My uncle (retired from the Air Force) got into stocks in 1998. He did not tell my aunt until around 2002. He lost around 200K of their retirement because he was unwilling to accept loss. He is still at it and has moved on to day-trading and is doing just as bad. It is a addiction and he does not use Robinhood. I was living with my sisters kid and set him up with a Robinhood account and stuck a f…
While it may be helpful to make the stakes real for your nephew, there are fake/paper trading accounts available at many brokerages.
Earlier quoted context omitted.
what does $0 commission mean? unless they're sourcing assets at mid then it's not 0 commission. and they can't be giving trades at mid to customers unless they're taking a loss on every transaction. they must be charging bid-offer - so how much?
I think it's pretty clear in the industry what commission means when it comes to trading stocks. It's on top of the spread. Go to any other broker and they have the same spread. It's not going to be much better at brokers for individual investors like us. And if you are worried about getting worse spread, use limit orders.
Wrong.
This is precisely how they operate their business model: they receive payment for the order flow, and don't compete with traditional brokers on execution price for marketable orders. I suggest you look at the public 605 reports for execution quality statistics.
"And if you are worried about getting worse spread, use limit orders."
This has nothing to do with it really.
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…
Vanguard has long offered commission-free trades of their ETFs and mutual funds. Same for many index fund providers.
Robinhood gets their revenue from margin interest lending to people who can't afford to invest but do it anyways. And also from selling the trading data to high frequency traders to front-run the Robinhood traders. The top guys at Robinhood all have HFT background and connections. Their pr message is priceless but a sham. The users are the real product, with all that we know goes with that.