How can Robinhood Investments benefit your future?
Updated: Jan 15, 2020
Do you want to pay transaction fees for stock trading?
I grew up knowing next to nothing about investing - I didn’t know it was an option. Then in my senior year of homeschooling, my grandpa gave me a class on economics. That was when I started learning about the problems with idle cash and started considering the idea of money growing in value. At the time, silver prices were spiking, so I considered that a safe and sensible investment. I bought a few ounces of silver - a fortune to my 16 year old mind.
Grandpa would give me updates on the market and through time I became more interested, but I didn’t have enough money to open a brokerage account. Later on, in grad school, and shortly after getting a smartphone, one of the grad students I shared an office with introduced me to Robinhood.
This was exactly what I was looking for - a free brokerage account with no minimum investment! I generally take a good amount of time researching and analyzing a product before trying it out and I usually check out several competitors for comparison. Though at the time, I couldn’t really find any similar services. I joined in April 2017 and it’s still one of my primary investment accounts. I love the flexibility, the information provided, and the fact that it’s free. In my time, they have made a lot of improvements, including adding free options trading, candlesticks, and a PC version.
Some of the features Robinhood offers
One time or scheduled bank transfers - this is a standard deposit from your bank to your Robinhood account.
Purchase of any number of stocks or ETFs that are available on Robinhood, with no trading cost.
Extended hours for trading - instead of 9:30 AM - 4 PM (EST), you can trade from 9 AM - 6 PM (EST).
Limit orders - these are buy or sell orders that wait for the stock to hit a certain price to initiate the order.
Options trading - this is basically a contract to buy or sell shares of a stock at a certain price after a certain amount of time. I’m personally not a fan of this.
Charts for the past day, week, month, three months, year, and five years. These include regular graphs and candlestick graphs.
There is a paid, gold membership to Robinhood, but I don’t use it, so I’m not going to recommend it.
Pros of Robinhood
All trades are free!
There is no minimum investment requirement.
You can see basic stats on the stocks, such as P/E ratio, Div yield, Market cap, 52 week high/low, etc.
There are information cards with notifications and relevant articles on the dashboard.
You can add stocks to your watchlist and track their progress.
Cons of Robinhood
There is no day trading - You get 3 trades of the same stock in a 5 day period, which is more than I would recommend using.
You can’t buy partial stocks, so no AMZN for you, unless you have enough for a full share.
The summaries aren’t as detailed as they could be (I rarely want more information than given though) - You might want to check out the financials on a different website, if you know how to read them.
There is always risk to investing and there is no guarantee you will make money.
All in all, I think it’s a wonderful tool to start out in the market and get some experience using little money. Kids can’t use Robinhood until they are 18, so I plan to start my children on a custodial account with Stockpile. I plan to continue using Robinhood myself for years to come.
If you’d like to join, please use this link and both of us will get a free stock! It might be a penny stock, but at least it’s something.
Don’t impulsively open a Robinhood account. Think about it, see if you have enough money saved, check your budget, and if it still looks good, go for it!