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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

#91

Post by Invictus0 »

koolba wrote: post #79
Invictus0 wrote: post #71

Earlier quoted context omitted.

Please recall this is the website that discusses startups. It is absolutely not fair to use "you are not a big company" as a point of criticism

It's absolutely fair when you're evaluating a potential fiduciary. I personally don't consider small regional banks secure beyond the FDIC limits for the same reason. But one of the "big guys" is fine as they're too big to fail.

> As part of the agreements with the United States Attorney’s Offices for the Central District of California and the Western District of North Carolina, the Commercial Litigation Branch of the Civil Division, and the Securities and Exchange Commission, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the Company was not entitled, harmed the credit ratings of certain customers, and unlawfully misused customers’ sensitive personal information, including customers’ means of identification.

https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-3-bill...

> As a result of HSBC Bank USA’s AML failures, at least $881 million in drug trafficking proceeds – including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia – were laundered through HSBC Bank USA. HSBC Group admitted it did not inform HSBC Bank USA of significant AML deficiencies at HSBC Mexico, despite knowing of these problems and their effect on the potential flow of illicit funds through HSBC Bank USA.

https://www.justice.gov/opa/pr/hsbc-holdings-plc-and-hsbc-ba...

Madoff had $65B AUM.

You must be living under a rock (or a democrat) if you trust an institution just because it's large.

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

#92

Post by jjmaxwell4 »

otherjason wrote: post #40

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?

Great question. The bid-ask spreads of the ETF itself already take into account the bid-ask spreads of the underlying securities, since there exists an arbitrage opportunity via the ETF redemption mechanism.

I found this PDF from State Street quite informative on the topic. We are working on our own data here as well and aim to share that down the line.

https://www.ssga.com/library-content/pdfs/etf/au/spdr-au-etf...

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

#93

Post by insane_dreamer »

Looks like a great product. In all honesty though it would take a lot to get me to switch from Wealthfront because they not only offer these funds but also various IRA funds, bonds, etc. I like having everything in one place, and I don't have the time, nor sufficient knowledge of the market (if I'm honest with myself), to micro-manage my investments, so I can put up with a 0.25% AUM fee to "set it and forget it". But for those want more control or who are trying to reduce fees as much as possible, this looks great. Good luck.

Update: Having said that, the fact that you say stocks are held in an account at Apex in my own name (avoiding the Synapse problem), is attractive. I'm actually not sure whether Wealthfront does that. That would be an incentive to get me to switch (or at least partly).

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

#94

Post by ahstilde »

I like the inclusion of a backtesting tool. However, I find it quite anemic.

I was hoping to see something like portfoliovisualizer to create strategies that I could then invest into. Especially as we're seeing stuff like momentum strategies and dual momentum strategies come into play.

I understand I can replicate SPY. Can I replicate MTUM? UPRO?

Also, MIDU is missing.

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

#95

Post by shmatt »

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…

I dont know the reasoning behind this comment, but YC isn't a charity. The investment was made with the hopes of making 100x return without customers paying fees. Obviously there are other cashflows in play

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

#96

Post by chii »

ramon156 wrote: post #50
taway789aaa6 wrote: post #41

Earlier quoted context omitted.

Ah yes, the old "we'll buy stocks for you and then turn around and lend them out to short sellers that actively want you to lose money. Promise we care about you!" I do not trust any institution that makes money off of lending MY shares out to predatory short-sellers who's sole purpose is to decrease the value of MY shares.

Sorry if this sounds uninformed, but what is the alternative? Even the bank and pensions gamble with your money, its how they move. I wish it wasn't the case either

> Even the bank and pensions gamble with your money, its how they move. I wish it wasn't the case either

banks don't gamble with your deposit - that's illegal. They use your deposit as a form of security when they loan money out (it takes similar position as equity).

Pensions don't gamble, they buy investments which could have some risks (and it's calculated risks). These risks are such that they make a reasonable return for taking it, and therefore can service their obligations (as a pension fund).

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

#97

Post by ddgddg »

much hate here; but mostly it is transparent jealousy arising from frustration about the great global money game being unfair and many educated and deserving ppl having no hope of ever making it off the bottom rung.

But jjmaxwell4 don't let any of that distract you

1. This problem (solid, simple, inexpensive) direct indexing is totally real 2. Congrats on identifying this and getting going on it 3. All your best customers are almost certainly not posting on reddit. Again don't let it distract you. This is a great idea 4. Pricing

While you don't want to price on AUM, 1$ is going nowhere fast, and as someone who is jazzed to be an early customer, I would really appreciate it if I could pay more than 1$ (along with everyone else out there) to ensure that the lights stay on and you don't feel pressure to sell to a trash retail bank who will just pepper me with lame cross-sells

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

#98

Post by hn_throwaway_99 »

chasebank wrote: post #64
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…

IIRC, FDIC only covers the deposits if the underlying bank fails, not the fintec layer built on top of it. Please correct me if I’m wrong.

That's literally exactly what I wrote in my comment.

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

#99

Post by highwaylights »

taway789aaa6 wrote: post #49
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

> PFOF and excessive off-exchange trading persist because so many trading platforms rely on the revenue it generates, essentially productizing their clients. Defenders of PFOF have claimed that retail brokers who route to high-speed traders (in exchange for PFOF) provide better price execution for investors and that it’s a net positive, despite creating an inherent misalignment between these platforms and their custo…

This.

It seems very much like that bogus stat that HR departments were peddling 20 years ago about how they only hire the top X% of people because they reject (100-X)% applicants - it tells you nothing about the quality in the gap.

These systems don't have to actively attempt to front-run you or pro-actively make bad trades, they can just optimize for deal flow, which is enough to cause the customer to get a sub-optimal price.

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

#100

Post by gruez »

chii wrote: post #84
gruez wrote: post #36

Earlier quoted context omitted.

>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 m…

> because they know the typical retail trader isn't a shark. so why don't the sharks use robinhood, which then they can do their shark thing there, but at a better price than before?

1. "sharks" in this case doesn't mean some guy trading out of his house with 6 monitors. They are institutional investors. They can't exactly open a robinhood account, which only serves actual people. Professional traders also value other niceties, like being able to trade on their desktops (rather than having to type in their orders on their phones), which is worth the 1-2 cents per share in potential savings.

2. It doesn't have to be 100% effective. For every day trader that's beating the market and running over market makers with $1M orders, there's a 100 that's losing everything in ill timed trades on meme stocks. As long as there's less sharks than the public markets, they'll come out ahead.

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