271–280 of 394 posts
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Most lifestyle business have similar revenue models. We shouldn't just object against one company.
The difference being that margin investing by novice investors has already led to the worst economic collapse in history.
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I got here: http://johncbogle.com/wordpress/ But I'm not sure where to go to find information about the returns.
That's John Bogle. You're looking for Jack Bogle. https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...
> John C. (Jack) Bogle, after whom the Bogleheads® are named, is founder of the Vanguard Group and creator of the world's first retail index mutual fund.
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The long play is that it actually doesn't cost significant money per trade at an institutional level. The only reason the other major brokers charge you money is because it covers their brick and mortar retail costs (e.g. Scottrade) and it adds to the bottomline (e.g. Etrade). So Robin Hood is actually just giving this surplus to the consumer instead of keeping it for themselves, and building a user base / brand in t…
But how is competing on price a business model in and of itself? Surely Etrade can do the same thing, right?
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What's the lesson?
Index funds (over time) tend to beat most professional money managers, much less amateur speculators.
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Wouldn't want to enable people to make their own decisions with their money, would we? The fact that you have to make a paid account to use leverage (whereas you can trade indefinitely for free) is deterrent enough for most people who do not already actively manage their investments. I think Robinhood is doing a great service -- I just wish they would expose a better API.
> Wouldn't want to enable people to make their own decisions with their money, would we I think you're missing what the criticism here is. Let's say you, right now, have $10,000. I say "Hey, lend me that money so I can play the stock market with it." Would you give me the money? You know literally nothing about me. You don't know if I've ever traded a stock before. You don't know if I can ever pay you back. There's a…
Isn't a credit check required to open an account?
“But ‘how are you going to make money long-term?’ has been a question mark” Bhatt says. Gold has answered that question.” A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage Wow, so that's effectively opening up new easy to get credit vehicles for unsophisticated investors. How could that go wrong? Even if you are a professional trader you'll take a bath on m…
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Robinhood makes money off of uninvested capital and margin accounts, not trade commissions. So why would they care what we buy or whether we make purchases rarely or not?
According to TFA they also make money off of rebates, which are proportional to the number of shares traded.
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I don't think that's a very good way of putting it. I'd say its more correct to say orders from retail investors are valuable because: 1) They tend to be a relatively equal number of buys and sells. This is figurative manna from heaven for market makers 2) They don't mind crossing the spread, also a gift for market makers. 3) They can't really move the spread and probably least importantly...... 4) they aren't tradin…
Retail investors are essentially paying a few pennies more per share in order to trade commission free. I think that's a good deal.
Enticing millenials to "trade" individual stocks is quite possibly the most anti- Robinhood thing I can think of. The only thing more ironic would be to encourage them to take on margin...which as it turns out is literally Robinhood's business model. 99% of users on the platform will ulimately end up participating in a direct transfer of their own wealth to a more sophisticated trader or algo (i.e. The banks and hedg…
I've written this on HN before but Fidelity(1) and Schwab(2) have similar low cost index fund offerings to Vanguard as well so don't think you are stuck with Vanguard. Both Fidelity and Schwab also offer the best checking account you can possibly get (no fees, minimums, plus ATM reimbursement) for free as well. Additionally, Fidelity has a great 2% cash back credit card. Even if you don't use Fidelity or Schwab's bro…
But I use Merrill Edge as a commission-free brokerage (30 trades per month with $50k assets, 100 trades per month with $100k assets). The upside (apart from not being limited to iShares at Fidelity and Schwab at Schwab) is in the credit card, which beats Fidelity.
Bank of America Travel Rewards rates:
* $50k+ Merrill Edge Balance: 2.25% travel rewards cash back
* $100k+ Merrill Edge Balance: 2.625% travel rewards cash back
Bank of America Cash Rewards:
* $100k+ Merrill Edge Balance: 3.5% groceries, 5.25% gas cash back.
Great deal. Oh, and they'll often pay you about 0.5% (up to $1000) of assets to transfer your equities in. Holding Vanguard/Schwab/iShares ETFs there is a dream for a personal finance geek. The credit card deal alone makes it all worthwhile.