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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

#211

Post by chis »

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.

Handy calculator. Comparing to VTSAX (.04% expense ratio), they show a 1% difference. Not nothing, but hard to justify switching when you consider the downside risk of this company going out of business or selling in the next 30 years.

I think this is going to be a hard product to sell when your target market is exactly the sort of people who are well-informed enough to just buy vanguard mutual funds for a nearly identical result.

Not to sound like a total hater but I'm always so surprised that VCs are willing to invest in these companies that just seem obviously flawed based on common sense. Similar to that web browser startup Mighty.

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

#212

Post by jjmaxwell4 »

Hasz wrote: post #177

One of the things you can easily do with your approach is to offer "soft shorting". Essentially, one of the biggest issues with normal short positions is that downside is basically unlimited. Plenty of shorts have been wiped out in this very, very long bull market. Soft shorting, imo, is just discluding a particular stock from your index. No insane downside, less active, but still a bet against a company. I want the…

Yes we allow this right now very easily, although we don't call it "soft shorting". You can remove or de-weight specific stocks or sectors quite easily.

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

#213

Post by chis »

dehrmann wrote: post #178
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…

How does FZROX make money? Loss leader for Fidelity? Improved economies of scale?

I believe it is a loss-leader. But these days companies get a pretty direct payout from people who accidentally hold cash in their investment account while on the way to buy ETFs

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

#214

Post by BobaFloutist »

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

Is there really no way to put a binding bylaw in incorporation papers that will survive a sale? Something like a land-use covenant, but for a corporation?

I'm not sure that's necessary for this particular case, but for something like private data exposure I've been playing with the idea that it's the only way to actually trust a company with your data.

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

#216

Post by jjmaxwell4 »

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…

If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets.

SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.

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

#217

Post by freeone3000 »

dboreham wrote: post #204
freeone3000 wrote: post #181

Earlier quoted context omitted.

The consumer finance protection bureau is your best bet. Banking regulators will also get involved for patterns of conduct, but this can take years.

Isn't that getting deleted after January?

Elections have consequences.

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

#218

Post by Hasz »

jjmaxwell4 wrote: post #212
Hasz wrote: post #177

One of the things you can easily do with your approach is to offer "soft shorting". Essentially, one of the biggest issues with normal short positions is that downside is basically unlimited. Plenty of shorts have been wiped out in this very, very long bull market. Soft shorting, imo, is just discluding a particular stock from your index. No insane downside, less active, but still a bet against a company. I want the…

Yes we allow this right now very easily, although we don't call it "soft shorting". You can remove or de-weight specific stocks or sectors quite easily.

nice, idk exactly what to call it, but it's imo a much bigger value than a clear 0% vs 0.05% fee difference.

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

#219

Post by jjmaxwell4 »

tmendez wrote: post #203

Does it rebalance daily? Wouldn't you pay short term cap gains if it does? Or is the strategy to buy an index, then only sell losers after an amount of time?

We optimize (look at the account) daily but only trade if the portfolio meaningfully improves.

We take into account tax rates while optimizing your account. You can also chose to put your strategy in Buy & Hold which will never sell anything thus never realize any cap gains.

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

#220

Post by ac29 »

aeyes wrote: post #136
Workaccount2 wrote: post #128

Earlier quoted context omitted.

I mean, $12/yr is not a lot, but if the platform is geared for long term investing and not trading, I'd imagine that in any given month 95%+ of accounts are doing nothing but sitting static and handing over $1.

They still have to rebalance all the time.

Most indexes are capitalization weighted, so they don't ever need to be rebalanced.
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