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Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

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Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#31

Post by UncleMeat »

carbocation wrote: post #6

FZROX gives me 0% fees, can be bought in my retirement accounts, and is attached to a company with something like $1 trillion AUM. The latter gives me faith that it will still be around next year. I appreciate that the 0% fee options are limited, but personally I’d rather deal with 0.03% fees than entrust my money to a small shop. Especially when the reason to do so is not some trading edge, but saving a small amount…

Plus, index tracking error (which is ignored in the ad post) is going to be comparable to these fees anyway.

"Invest all your savings in our startup so after 30 years you'll have 1% more money in the absolute best case scenario" doesn't feel like a winning strategy.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#32

Post by don_neufeld »

hn_throwaway_99 wrote: post #16

I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you. It says my money would be SIPC insured, which means if anything goes missing (obviously not through loss of equity value, but through missing funds or a ledger bug), I get my money back, up to the SIPC limit, right? I just want to ensure this isn't the same situation with fintechs that say yo…

Yup.

Zero interest until there is a very clear answer here.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#33

Post by redrove »

I wish you had been more clear this is US only.

I had to sign up, verify my email, tried opening an investment account, had to untick I’m a US citizen/resident and only then did your platform let me know I’m not welcome as a client.

Oh and PS there’s no way to delete an account is there?

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#34

Post by taway789aaa6 »

ddulaney wrote: post #24
dayone1 wrote: post #11

1) are you going to sell your trade flow to Citadel / market makers like Robinhood and your competitors do? That's the dirty secret way of making money that you seem to have completely excluded. The reality is that adds up to substantial "invisible" fees that the investor has no transparency over because you sell your trade flows to them and they make a higher than normal spread. And the whole "doesn't matter if we s…

For 1 — dude, please back off the “[the rules] are a farce”. Citadel and friends pay to trade with you because they think you’re dumb and they can make money off you. They’re giving you or your broker a better deal because they think they’re smarter than you. That’s all it is. They’d rather trade with you than with the median person on the market. Because they think you’re dumb. You’re welcome to be insulted by that.…

The "farce" is that when a market maker like Citadel purchase your order flow, the orders are typically not routed to the lit market (e.g. NYSE, IEX, etc) but instead routed to "alternative trading systems" (ATS) e.g. "dark pools" where your purchase has no effect on the price of the security.

This breaks the whole idea of a "market" where every buy puts upward pressure on a price and sales put downward pressure. Thus, a "farce".

That's not even getting started on the "farce" that is an ETF and how they are balanced/re-balanced.

Gotta love brokers that don't have your best interest in mind. Who needs best execution? /s

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#36

Post by gruez »

ddulaney wrote: post #24
dayone1 wrote: post #11

1) are you going to sell your trade flow to Citadel / market makers like Robinhood and your competitors do? That's the dirty secret way of making money that you seem to have completely excluded. The reality is that adds up to substantial "invisible" fees that the investor has no transparency over because you sell your trade flows to them and they make a higher than normal spread. And the whole "doesn't matter if we s…

For 1 — dude, please back off the “[the rules] are a farce”. Citadel and friends pay to trade with you because they think you’re dumb and they can make money off you. They’re giving you or your broker a better deal because they think they’re smarter than you. That’s all it is. They’d rather trade with you than with the median person on the market. Because they think you’re dumb. You’re welcome to be insulted by that.…

>Citadel and friends pay to trade with you because they think you’re dumb and they can make money off you. They’re giving you or your broker a better deal because they think they’re smarter than you. That’s all it is.

More to the point, just because they're smarter than you, doesn't mean you're taking a loss by trading with them. The public markets are shark tanks, and it's better for both sides to avoid it. Market makers can make money off the spread (eg. buying at $3.14 and selling at $3.16 and pocketing the difference) without the risk of getting run over by a hedge fund, and retail traders benefit through tighter spreads, which the market makers can offer because they know the typical retail trader isn't a shark.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#37

Post by jjmaxwell4 »

tschwimmer wrote: post #26

I like the idea behind this business and like the value that you are providing. I'm a target customer because I'm sensitive to investment fees and have done lots of comparison shopping over my investing lifetime. Unfortunately, I won't use your product. While you do appear to be cheaper than Vanguard for a comparable product, I don't think the risk of switching is worth it. The primary risk I'd be worried about is yo…

Appreciate the thoughtful response. I hear you on switching costs being quite high for a brokerage and its very much a considered purchase. I'd love for Double to be considered in the future.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#38

Post by shred45 »

jjmaxwell4 wrote: post #27
shred45 wrote: post #14

Do you manage the portfolio of each customer individually? How closely will this match the target portfolio for smaller investment sizes? I see that there are minimum investment sizes. Do I need to buy at least one share of each member of the SP500 for instance? How do transaction fees compare with expense ratios of, say, Vanguard? I see that you account for them in your backtest, but it would be helpful to represent…

We use fractional shares. But otherwise you are correct, our minimums are set to allow you to buy at least $5 of each member of the US 500. We do not charge trade commissions. There are some SEC fees charged for trading across most major brokerages. The national best bid offer (NBBO) means you will get executed at the current best price for a given security across all exchanges.

Thanks, regarding transaction fees, I was referring to slippage (should have said transaction cost). This depends a lot on your customers rebalancing settings, but it would be good to be able to compare that directly to VOO.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#39

Post by [deleted] »

wrsh07 wrote: post #29
wrsh07 wrote: post #25

Earlier quoted context omitted.

Pfof is woefully misunderstood In general, citadel wants to pay to trade with retail investors because it knows it isn't going to face adverse selection. So it will give them tighter bid/ask ratios (this is better for the customer) than they would get if they were trading in the open market, citadel isn't going to get hosed by one of them (because there's no adverse selection) It's win win win

Here's the money stuff excerpt: https://marginalrevolution.com/marginalrevolution/2021/02/th... > I feel like most of what I read about payment for order flow is insane? Otherwise normal people will start out mainstream explainer articles by saying, like, “Robinhood sells your order to Citadel so Citadel can front-run it.” No! First of all, it is illegal to front-run your order, and the Securities and Exchange Commis…

[deleted]

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#40

Post by otherjason »

If your roboadvisor is buying the individual stocks that make up the index in my personal account for me, do you have data that compares the slippage (bid/ask spread) paid across all of these transactions versus a single purchase of very liquid ETFs like SPY?
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