I went and grabbed this to add more,
August 15, 2018 4:15 PM ET money.com reviews robinhood.
Quote:
When asked for comment, a Robinhood spokesperson wrote, “Robinhood’s entire platform offers U.S. stocks, ETFs, options, as well as six different cryptocurrencies, allowing customers to create diverse investment portfolios.”
But unless you’re looking to trade stocks, cryptocurrencies and options — a practice that MONEY generally doesn’t recommend — you should understand Robinhood’s major pitfalls
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interesting promise: make money in the stock market without paying a single cent in commissions.
If this sounds too good to be true, well, it probably is.
Robinhood’s main audience — young investors with little experience in the market — has driven its success. Its valuation has recently ballooned above $5 billion while its user base is larger than the number of brokerage accounts at E*Trade Financial (the company says it currently has 5 million users).
Yes, it offers some benefits, including ease of use as well as the ability to gain access to certain investments without paying commissions. The app also provides a way to purchase exchange-traded funds (ETFs) — baskets of stocks and bonds that can be the basic buildings blocks of a diversified low-cost portfolio — although you have to dig a bit to find them.
But make no mistake: Robinhood is simply day trading for the mobile era, and its design could actually hurt young investors who don’t recognize the risks. The Robinhood app encourages stock-picking and frequent trading and profits from this behavior.
