Robinhood is a new service that allows users to invest in stocks and ETFs (Exchange-traded funds) with a single fee, no account minimums, no bank account required, and a free stock portfolio of US stocks and ETFs. It is created by Robinhood Markets, Inc., which has a good reputation among its clients for its technological offerings.
It is a free stock trading app that gives you the power to invest in stocks like Apple, Tesla, Netflix, and other companies at a fraction of the cost. The best is that you can access Robinhood Options, which lets you short stocks, put options, and more.
The investing app (for iOS or Android) is free to sign up and open an account, and you can start trading right away. Besides using their mobile app, you can also begin trading through the web–you can use an existing Robinhood account to link to the Robinhood Investing app. If you have an existing Robinhood account, you can simply log in to it. Still, if you want to create a new account, you must first link your existing one to the new one.
Is Robinhood Investing Good for Beginners?
Since the service is free and easy, anyone who has an interest in this field can start investing. This is actually a one-of-a-kind service that was not seen before in the trading industry. Honestly, I’ve been a member for about 2 weeks now, and I’m absolutely stunned by the value this service has to offer. But unfortunately, not everyone can understand the concept of the service. I’ve been doing a little bit of research on investing, and I’ve found that a lot of information out there can be confusing to understand. I’ve also been a little bit overwhelmed with the process of creating my investment portfolio and the terminology that is involved.
However, I will try to make the readers understand this in easy words. The first thing to say is that Robinhood is not a broker or a financial advisor. They offer no investment advice and no financial advice. Additionally, Robinhood does not have any hidden fees, and it’s free to invest with. What’s more? You get a lot in return.
That said, there are two ways to invest your money. The first way is to let a financial adviser instruct you on what to buy and what to avoid. This is fine for people with no prior knowledge about the trading world. The other way is to do it yourself. If you choose the latter, you don’t have to pay a broker or financial advisor to do it for you. However, you can do it yourself only if you possess the know-how to conduct yourself in the trading market.
Why is Robinhood Investing so Popular?
As said earlier, Robinhood is a brokerage that allows you to trade stocks and ETFs from your mobile device. It is, essentially, an alternative to traditional brokerages like E*Trade, Charles Schwab, etc., that only offer you access to stocks, not ETFs.
The exceptional feature of Robinhood is that you can even trade cryptocurrency, and they charge 0% fees on the first $10.6 billion of stock trades made each quarter, 6 basis points on trades above that, and up to three cents per share on larger orders.
Moreover, it helps you invest your money by giving you real-time quotes from the biggest exchanges in the world. It is a commission-free, no-fee broker stock trader service.
What is the Advantage and Disadvantage of Robinhood Investing?
It’s not hard to see why Robinhood investors are obsessed with the company. Since it’s a free investing app with many features, including price tracking, portfolio diversification, and even automating your investments, people find it to be of great help. It’s used by over 2 million people right now, and it’s been growing rapidly. It is estimated that by the next year and a half, its number of consumers will increase by ten folds.
That said, here are a few pros and cons:
- Trading US stocks and ETFs for free
- Feature-rich mobile and web trading platforms
- Completely digital and fast account opening
- Limited product offerings
- Poor customer service
- Insufficient educational materials