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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

#161

Post by rcMgD2BwE72F »

hn_throwaway_99 wrote: post #135
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…

> If the answer is no, you don't sell trade flows and yes, you will rebate your borrow fees, can you make a lifetime commitment that you won't go back on your word? To be honest, why would you even ask that? "Lifetime commitments" are ridiculous. It's simply not a promise that any founder or business owner could ever make. Businesses get sold, circumstances change, etc. It's better to just accept that as a risk facto…

>Businesses get sold, circumstances change, etc.

More importantly, founders also lie about their intent.

It's easier to trust owners when they commit and are ready to go to court over their promises. Ever heard of Lavabit? https://en.wikipedia.org/wiki/Lavabit

It's never ridiculous to ask. What's ridiculous is for founders to make their customers believe they're ethical when they're not. Let's ask then, and you don't have too high expectations.

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

#162

Post by jkulubya »

Lionga wrote: post #112
jkulubya wrote: post #75

Earlier quoted context omitted.

Leaving aside the veracity of that figure, if they've sold $60B of shares they don't own then they must've sold shares they borrowed in some way, and that shows up in the demand/supply. Someone (or someones) in the market would know.

As a market maker Citadel is allowed to do naked shorting.

A naked short on their own account would be illegal. A time-bound naked short to fulfill their role as market maker would be acceptable.

But even then, all trades are either eventually settled at some time t, or fail to settle, e.g. if the seller is not good for the shares. Any of these 2 events happening is reported outside of a single broker-dealer, i.e. public info. And to settle a trade, you will need the actual shares, that you've either bought or borrowed.

All this info, settlements, failures, stock buys & loans is visible to other parties in the market.

If your point is that the Citadel is breaking the law, and not reporting what they should, when they should, then that's a problem. But there would be so many other parties discovering it way before their annual financials are published.

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

#163

Post by danielmarkbruce »

paxys wrote: post #158
danielmarkbruce wrote: post #137

>> Over a 30-year period on a $500k portfolio, the money lost to those fees would be $1.30M for the financial advisor and $244k for the average ETF and even $42,951 for the low fee VOO. How do you calculate $42,951 for VOO? Seems too high on 500k, or at very best you are conflating FV and PV and comparing apples to oranges. First year is going to be $150. Last year is going to be maybe 2^3 * 500k * 0.03 = $1200? I'm…

The calculation is at https://double.finance/pricing They are assuming an additional $2000 contributed per month and a 7% return.

So, future value of fees against PV of portfolio, then with an additional $24k added every year for 30 years...

It's going to be difficult for them if right out of the gate they fudge numbers every time they talk about their company.

Is it that difficult to just shoot straight?

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

#164

Post by paxys »

coldpie wrote: post #20

I'm not super well versed in how investing stuff works, so sorry if I get some words wrong. This isn't a fund I'd be able to purchase from my existing brokerage/retirement accounts, right? I would have to actually give my real money to you (via "Apex Clearing," who I've also never heard of & doesn't even have a Wikipedia page) to hold & manage? Even in the best of times, it'd take quite some convincing for me to give…

You should in fact be worried if they were a fund, because then you are giving them your money to manage. They are instead a brokerage, so they money you deposit will simply be used to buy shares. If they go under, you still own the shares.

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

#165

Post by wbl »

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…

The reason people pay for trade flow is the same reason they sit at the table of drunks when playing poker.

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

#167

Post by elil17 »

jjmaxwell4 wrote: post #123
elil17 wrote: post #118

I do think this is a great model for someone who wants to hold the S&P 500 (which many people do). However, educated index investors typically hold a total market index fund. Double’s US small cap offering is severely under diversified and there is no international offering. 10 bps is absolutely worth it to get broader diversification and international exposure.

Complementing a Direct Index US 500 portfolio with Small Cap or International ETFs is very possible. You can exposure yourself to US Small Cap and International through ETFs - there is the related ETF expense ratio in that case.

Sure - but now that's looking like a lot more work and you're not saving much money. VT is 7 bps but VXUS is 8 and VB is 5. So if I want to use double just for my US large caps, I've got maybe 40% of my money there, 20% in VB, and 40% in VXUS. Then I wind up with a blended expense ratio of 4.2 + $1/month. Okay, I've saved about 2.8 bps, which is $28/year on $100,000.

In return I don't just have to do manual rebalancing - I have to move money in and out of a separate account every time I want to rebalance. I also have more tracking error.

I don't think that's something anyone is actually going to do for less than 3 bps. But of course if you are able to use Double as a one-stop-shop, then it's great.

I'll absolutely be keeping an eye on them and would seriously consider moving my money over if they could track MSCI ACWI.

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

#170

Post by jjmaxwell4 »

ahstilde wrote: post #94

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.

Thanks - worked hard on the backtester despite it not being front and center product wise.

We currently have 50+ strategies. About 30 of these replicate popular ETFs. MTUM is one of them (https://double.finance/p/explore/124). Here are our 4 factor focused portfolios (https://double.finance/p/explore/factor-thesis). If there are more you want to see please let us know as we can most likely add them.

MIDU is unfortunately not eligible to be traded on a fractional basis by Apex. Main things missing are some new/low volume ETFs and ADRs (although we have some of them).

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