Robinhood is the bees knees when it comes to millennial-aged investors. Over the last few decades, brokerage prices have gotten lower and lower due to ease of access through the internet and, now, Robinhood has taken that one step further to include FREE stock brokerage. While it may not feature every aspect that paid brokers offer, it gets the job well – quite well for non-day traders that are always on the move. This is an overview of my experiences on the platform for well over a year now. As an investor with a positive track record, I have to warn you the dangers of investing with out the proper due diligence. Even the stocks I suggest looking into on my site are relative to my risk/reward tolerance and shouldn’t be blindly invested in.
- IT’S FREE. In 2016 alone, my portfolio went from $2,000 to over $6,500, where I saved around $4,000 in brokerage fees thanks to robinhood . If I had used a traditional broker, I would have made a few hundred on the $2,000 I invested, but instead I nearly tripled my initial investment. It took more work to achieve these results because I referred to multiple sources of information and charts (I swear by TradingView’s platform for Robinhood investors and those new to trading) to trade reliably, but because I started with such a small amount of money and couldn’t afford a traditional broker it was worth it in the end.
- Ease of Access. Its extremely nice to be able to wake up and roll over to check my portfolio before getting out of bed. I can also check it on the toilet, at lunch, work, wherever I want really. My entire portfolio is in the palm of my hands at all times.
- Small investments. While bigger brokers have more information to offer their clients, robinhood trumps them when it comes to investing in small amounts. You can start investing with the same amount of money it costs to make a single trade with some brokers. My first deposit was for $90 and when it reached $110 after a while I took it out. With a normal broker charging $10 a trade, my 22% gain would have been erased to the commission.
- The biggest con in my opinion, is the slowly updating information. While the stock price is relatively quickly loading, its still not optimal in high volatility days or if you are trading stocks with high spreads and low volume. While limit orders help reduce risk it cant help in all situations when you need to move quickly, but for most investors it shouldn’t make a world of difference.
- The news feed. For massive companies like Apple or Google, it may included enough relevant information to know whats going on day to day, but for smaller companies with higher growth potential, its almost useless. With paid brokers, you can rely more heavily on their aggregated data. I’m invested in Sophiris Bio and none of my useful research has come from Robinhood’s suggested news cards.
- The Chart. The chart may show general trends but you can forget about technical analysis or getting any clear picture of the price action without using a supplementary site such as TradingView.com which offers a TON of options and can make trading a great deal easier.
- Robinhood Gold. Their Gold program allows everyday investors access to thousands of dollars by paying a monthly fee. Essentially they are offering ridiculous loans to people who, in many cases, don’t know how much risk they are putting themselves in. You should never invest money you can’t afford to lose, let alone pay for more money that you can’t afford to lose.
Investing is not for everyone, but if it there were an app for everyone to invest, it would be called Robinhood. Its creating a new generation of investors where anyone can become the next Warren Buffett simple by using their smart phone or tablet. You can download it here: