Robinhood is a stock trading app for Android and Apple devices that somehow manages to not charge trade commission. Will this be the platform to create change? I think so.
If you are not familiar with Robinhood and you are an investor in the stock market or hope to begin, this is an amazing place to start. The entirety of the platform is app based, so to sign up simple go to your respective app store and download it. Signing up (according to the website) takes about 4 minutes.
Once signed up all you have to do is fund your account and you are ready to start investing. You have access to all stock on the New York stock exchange and various ETF's simply search in the top right hand corner and type a stock such as "MSFT" or Microsoft.
Robinhood is a really basic application and to me that is definitely a positive. For example I invest with Charles Schwab also and their interface is overwhelming to say the least. This is a much better place to begin as an investor but totally useful for those of you already investing. The single biggest advantage of Robinhood vs the competition is the fact that they do not charge trade commission. This means that if you buy 1 share of MSFT for $68.49 that is the price you pay. Other sites charge as much as $10 per transaction. You can truly build your portfolio 1 stock at a time with Robinhood.
Another really nice feature is bank transfers from your checking account to Robinhood are instant. If a stock you are watching becomes ripe to buy you can transfer money and purchase the stock that day. I do not know of any other investing platform that allows this transfer that quickly.
A couple of issues:
No DRIP: DRIP refers to Dividend Reinvestment plan; this is a program in which dividends paid to you in cash are reinvested towards the purchase of more stock. This isn't too big of a deal because Robinhood doesn't charge fees but still.
Not able to purchase shares not in NYSE (New York Stock Exchange). This is not a big deal breaker for most but if you want to invest in a foreign company such as Samsung or Nintendo you will have to do it elsewhere.
Robinhood has officially changed the game. Other companies will start to react, for example Schwab now only charges $4.95 trade commission but that doesn't beat $0. My investment style is perfect for Robinhood and you will get to watch that journey right on this site.
Used Robinhood? Love it? Hate it? Share in the comments below.
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