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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

#241

Post by recursive »

paxys wrote: post #164
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.

Thanks to this comment, I was finally able to comprehend what "brokerage" actually means. Thanks.

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

#242

Post by recursive »

gdudeman wrote: post #180

Services like this can be very, very difficult to leave. Be aware that if you are doing direct tax indexing with tax loss harvesting, you are increasing your tax liability in the future. If you invest in direct indexing here, you have three choices if they tack on fees or you are unhappy with their service: 1. Take a random assortment of 300+ stocks and watch your portfolio become unbalanced over time 2. Liquidate yo…

Under 2, why would you end up worse off? I'm decidedly unsophisticated in this domain.

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

#243

Post by Glyptodon »

Looking through the surface level details of Double, I quite like what I'm seeing.

That said, I use Schwab, Wealthfront, and M1 and am not entirely happy with any of them so I am probably a targeted type of customer.

I haven't lookeded too deeply (no idea if implementing things like HFEA style leveraged portfolios in an efficient way is possible, for example, or if there are non-index means of handling hold-till-maturity bonds), and probably will later.

That said, based on the comments here I'm curious:

1. I've always assumed % fees were related to the cost of risks being proportional to account AUM crossed with holding and transaction expenses. Fixed fees to me imply that you don't think any risks on your end are portfolio size or transaction size proportional. If this is really the case, why is this the case? (Or why am I wrong about the link?)

2. Lots of commentators seem interested in questions about how you loan holdings and if shareholders get cuts and if you accept payment for order flow. I'm less concerned with these exact things and more concerned with how the customer relationship is defined. Is there an equivalent to being a fiduciary when it comes to handling such things? Or would that force you to not permit as much self direction from account holders? Are the $1 payers for sure the customer or is there a second side to your market/business model?

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

#244

Post by xur17 »

ac29 wrote: post #236
xur17 wrote: post #146

One thing I've always wondered about products like this: how is the portability between platforms? For example, if double.finance shuts down, are there other platforms that I can transfer my assets to inkind that will maintain the index fund tracking for me moving forward? I realize I can use ACATS to transfer the assets, but I want index tracking as well.

There are a number of companies offering direct indexing, but you'd need to research them individually to see how they supported transferring in assets in kind. Ideally any direct indexing would be done in tax advantaged account so if you needed to liquidate your positions and start over from cash there are no tax implications. Otherwise, be prepared to eventually deal with hundreds of individual positions each compo…

> Ideally any direct indexing would be done in tax advantaged account

A lot of the benefit of direct indexing comes from the ability to tax loss harvest, which requires it not to be in a tax advantaged account.

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

#245

Post by FactKnower69 »

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…

>I'm just really, really wary of new fintech products to save like .3% on fees

off by an order of magnitude, you're saving 0.03% on fees

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

#246

Post by recursive »

chii wrote: post #96
ramon156 wrote: post #50

Earlier quoted context omitted.

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 re…

So if the risk is calculated, it's not gambling? Lottery tickets publish their odds. And in that case, it's actually possible to be confident that the odds are correct. I don't understand.

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

#247

Post by 1oooqooq »

hn_throwaway_99 wrote: post #223
BobaFloutist wrote: post #214

Earlier quoted context omitted.

>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.

In the US, not that I'm aware of. I suppose it would be possible to add a "poison pill" ("If we change this, we'll pay everyone $X dollars") to then just make it a normal contract, but again essentially no company would be willing to do that because it extremely limits their options. Also, "forever" is a lot shorter than people think, it's only as long as the powers-that-be are in a position to enforce a contractual…

nonsense. there's millions of ways.

one is to be upfront about it on every advertisement and service description... can't get any easier than this. and is as effective as the complicated canary shenanigans.

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

#248

Post by ac29 »

sergiotapia wrote: post #168

As a layman, how is this different from just buying FZROX automatically every week for the next 30 years? No snark, trying to learn for my financial future!

Fidelity makes their own indexes for their zero-ER products, there arent any funds with the exact same holdings that I am aware of.

That being said, FZROX should track the broad US equity market pretty closely, so some of double's offerings should have very similar performance.

Double will let you do some additional things though. For example, lets say you wanted a US equity index with no exposure to the large tech company you work for. Double could do that, FZROX could not.

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

#249

Post by 1oooqooq »

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…

it's already public that frontrunning is perfectly legal if you can do it with large volume as to not show intent of frontrunning one single person.

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

#250

Post by Cataleya »

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…

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