Why would anyone trust a financial institution with their money when they have acted like Robinhood as acted? This is a fundamental question.
3% interest
Robinhood cuts losses after transaction revenue drops
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Re: Robinhood cuts losses after transaction revenue drops
#92Earlier quoted context omitted.
Schwab or Vanguard. Vanguard pioneered the low cost index fund and Schwab was one of the original "discount brokers". Their innovations were adopted by every other broker, driving down costs for the small trader. They remain allies of small investors.
Vanguard's got excellent funds and ETFs, but they're legendary in terms of having some of the worst customer support for their brokerage account. Schwab/TD Ameritrade on the other hand, has kinda bad ETFs but have really good customer service. Besides, you can buy Vanguard ETFs / Mutual Funds in your Schwab account. Go for customer service. There's some minor benefits in terms of how quickly you can enter / exit Vang…
I tried to set up an online account with Vanguard recently. At the end of the signup flow, I got an error saying I had to phone it. It was a weekend so I tried a couple days later during business hours just to be sure and because I loathe dealing with human beings for stuff that should be able to be handled by a website. Same result.
So I phoned in, spent a half-hour with a human being. He was audibly cursing as he tried to get me set up. At one point, after I had given him my name and other PII, he addressed by a different first name then quickly corrected himself.
At the end, he said, "Ok, now you'll get an email to finish setting up your account." Email arrived and it was addressed to someone with a different name. I recognized the first name as the same name the agent had mistakenly used with me.
Suffice to say, I did not finish setting up my account and decided to stick with Fidelity.
Re: Robinhood cuts losses after transaction revenue drops
#93No post body was provided.
Re: Robinhood cuts losses after transaction revenue drops
#94Earlier quoted context omitted.
Interesting thought. Is Robinhood that common in the crypto world? I know they support it, but I would have guessed it was an “also” feature rather than a driver.
Crypto was responsible for approximately 35% of Robinhood's revenue in 2021.
The fee structure differs among their offerings, so that doesn't tell you relative popularity.
Re: Robinhood cuts losses after transaction revenue drops
#95If Robinhood had to close shop, who's a good broker to transfer holdings over to?
Fidelity or Vanguard.
Re: Robinhood cuts losses after transaction revenue drops
#96Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.
Cash is also shrinking. Loads of new investors existed thanks to the government stimulus payments. My memory is failing me but I read that after the first few stimulus checks, savings went up 33% for the average american household. (I honestly don't know what the 33% was about but it was a positive change). That's pretty much all wiped out as people lost money. I think that glut of investment was just a temporary thing
Re: Robinhood cuts losses after transaction revenue drops
#97Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.
Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.
Dow is 10% higher than pre-lockdowns Feb 2020 and I hear at least since 2017 that stocks are overvalued.
Re: Robinhood cuts losses after transaction revenue drops
#98> Rising interest rates helped lift quarterly net interest revenue to $128 million, more than doubling from the same period a year ago. Chief Financial Officer Jason Warnick said the company has about $17 billion in assets that generate interest revenue. While Robinhood used to pay a competitive interest rate for cash in the account, it is now 1.5% while Fed risk-free rate is now 3.75%+. You need to pay for Gold subs…
The current I-bond composite rate is 6.9%: https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-int... . (Usual one-year lockup for I bonds, plus a 3 month interest penalty for redemptions before 5 years, and there's a relatively low limit per person per year. Still.)
Re: Robinhood cuts losses after transaction revenue drops
#99What is this in the context of the wider market vs other Retail brokers? I don't think this is a knock against RH more a description of what's happening in main-street.
RH was a joke from the start. To invoke a no true scotsman, I know literally zero actual traders using the platform. Value investors like Schwab for it's customer service. Sometimes they prefer other firms (Fidelity). Day traders, etc almost universally use Interactive Brokers. Having done some profitable trading in my day I can tell you that IB's platform is arguably the best if your capitalization is less than 500,000 (at these capitalizations you can often find more bespoke brokers with even better access than IB, especially in futures). Their "pro" tier allows direct exchange access, and their API is complete (though antiquated). I'm not sure if they still do it but I distinctly remember them offering a FIX API if you wanted as well. IB's pro features do take some money. You have to pay for exchange access, and you pay per leg. But, as the saying goes, if you aren't paying you are the product (pfof).
RH made it's money through pfof and capturing COVID relief checks.Their brilliant corner in the market was a frontend app so easy to use that you wouldn't even think about the money you're losing. Since RH's release, most brokers offer similar (if not equal) platform usability and RH's lunch has been completely eaten. I would be surprised if it survived a few more years before either going under or being cannibalized by actual brokers.
Re: Robinhood cuts losses after transaction revenue drops
#100Earlier quoted context omitted.
What a novel and original argument. Actually Bitcoin and Ethereum have a known supply and limited inflation (Ethereum is actually deflationary now) so best suited to not go to zero. The USD on the other hand… https://fred.stlouisfed.org/series/M2SL https://ultrasound.money/
With stocks, you're purchasing future profits. That puts a floor under things. With crypto you're purchasing??? There's no floor. It has limited utility.
I've had stocks go all the way to zero.