Robinhood – Free stock trading – Update

January 11, 2015 at 8:04 pm Leave a comment

Just a quick update.  My Robinhood account was opened early last week and I started the process of transferring a little money to it.  Transfers to the service seem to take about 3 business days, which seems a bit longer than other similar services.  So far, they don’t seem to take it on faith that you have the money, so you can’t start trading with it the same day you initiate a transfer, but you have to wait for it to clear.  Perhaps that will change once I’ve been with the service for a while.

My first trades

Friday morning, I was able to complete my first trades with the service.  I was able to set Limit orders and the IOS app sent me a notification when my purchases went through.  Market orders seem to go through almost instantly.

Over the course of several hours, I purchased 8 different stocks, as few as 3 shares per order.  Sadly, 7 of them ended the day down, not that Robinhood had anything to do with that.

Negatives

First of all, there’s only an IOS app today.  I know android users are feeling left out here, but I understand they are working on that.  Personally, I prefer a web platform.  Maybe I just like seeing more information on the page at a time than you get with an IOS app.

News?  What news?  I’m used to the IOS Stock tracking app, which lets you easily see news stories about each stock.  I’d like to see something similar in Robinhood, so I don’t have to go to other apps to see what’s going on with my stocks.  Of course, this could encourage frequent trades, so perhaps this is really a plus.

I can’t buy every stock I want…  I added all of the stocks I’m currently interested in to my watchlist, and one of them does not show up with a “BUY” button.  I’m not sure which exchange it’s on, but it seems that there might be some exchanges Robinhood doesn’t cover yet.  The actual stock I have this issue with is CLB.

Overall

I’m impressed.  So far, everything is as advertized.

This looks to be a great way to purchase small orders of stock with no fees.  That’s extremely important if you are an investor without a lot of money to invest at once.

Basically, this is replacing long-term savings for me.  I’m likely to add a few hundred per month to my account, and pick up a couple of shares of stock with it.  I don’t plan to do this with money that I’ll need in the next 6 months or so.  Instead of socking my long-term savings away in an account earning a *YAWN* whopping 1%, I can put it into a stock, bond, REIT, ETF, etc.  And while these investments can lose value, if invested in a diversified manner, it is likely to return far more than 1% a year.  Heck, it’s likely to earn about 10% a year if you just invest in an index fund.

Another thing – Robinhood will let me take full advantage of dollar-cost averaging, something I have been hesitant to do with other services due to the $10.00 fee for each trade.  With Robinhood, as soon as my deposit clears, I can start buying without worrying about paying junk fees.

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