Robinhood Review

What is Robinhood anyways?

Robinhood is a free app that is designed as a free stock trading platform. You are able to trade stocks for free with no commisons on trades. Pretty standard fare now but they were one of the first to offer it. The other part worth mentioning is they have Robinhood Gold, a premium service that gives access to more in depth data on whatever company or fund you are looking at, in addtion to other bemefits. This is currently priced at $5/month but is totally uneccessary for you to start using the app. I bring this up so you understand that you can use this app for free and not pay anything to dip your toes in the stock market. The tl;dr for Robinhood is, recommended. You get a free stock for signing up and free is nice. Download it and try it out with my link, Robinhood download. Full disclosure, it is a referal link. You follow it, we both get a free stock. But, there is a lot more to why I recommend this service and app than self-enrichment. Let's break down some of the parts of the app and service as a whole.

Disclaimer: I own shares in Sunpower, and Ford in the images shown. Some of the links in this post are affiliate links. If you click the link, I could earn a reward or commission.

User experience

Now Robinhood is, in my opinion, a decently designed app and has a good user interface. Navigating screens is reletively easy and intuitive. Overall, I can find the place I'm needing to go with 1 or 2 taps.

Features: Free, Gold, Options, Crypto, etc

Another area I like are the features of Robinhood. Like I mentioned before, free is where I'm at using their service and I do not want for anything more. It is s place I have like $10 I personally invested. All I need the app to do is make it easy to navigate and easy to view quick glimpses of companies I have some background on. Other features free has are:
  • Instant deposits up to $1,000- Robinhood will go ahead and front you up to $1k while you wait for a bank transfer to clear in a few business days. They can revoke this feature so be smart.
  • Basic info- All the basic info like P/E, Volume, 52 week highs and lows is available when you load a specific stock.
  • Fast trades- Really, the best part is being able to make 3 taps and sell or buy stocks. Very nice and free.

  • Robinhood Gold

  • Some quick added features for Robinhood Gold are:
      • Bigger instant deposits: You transfer from a bank, they front you the money until it clears
      Margin: You get access to a margin account up to 2x your portfolio value. That's a hard pass for me but hey, I'm not a risk it for the biscuit kinda guy. It might be a good try for you though.

    Crypto and options

    Robinhood also lets you trade options and cryptocurrency on its platform as well. I don't use these optional features but it is worth mentioning if you were wanting to trade bitcoin and the like.

    Cash Management

    Robinhood also launched a service called cash management. This is a service that automatically sweeps up any cash you have into partner banks; the 6 banks are listed in the terms. Essentially, you have any cash that you have left and not invested, they move it to the partner banks' saving accounts on your behalf and earn interest. Prior to the Corona-crash of 2020(R.I.P. High Yield Savings), the rate was hovering near 2% APY but of course, near 0 Federal Funds rates pushed the rate down to near 0. It currently stands at 0.3% APY. Abysmally low but honestly, still better than most of my traditional banks current advertised rates of 0.01%. Like really, that's insultingly low.

    Dividend Reinvestment Program- DRIP and Fractional Shares

    The newest and greatest combo of features on Robinhood is the Dividend Reinvestment Program and Fractional Shares. Together these really work with my strategy for growth.The DRIP is an automatic, set it and forget it program that allows you to select certain stocks that award dividends and have the dividend be automatically reinvested back into purchasing more of the same stock. Example: X Corp awards a $1/share dividend, the DRIP would automatically purchase $1 worth of X Corp for you after the dividend is in your account. Simple right? Now as most of you can guess, $1 usually doesn't buy a full share of a company. If you can't purchase a full share, usually this means your out of luck. Luckily, Fractional Shares helps you out. Continuing with the above example, if X Corp awarded $1/share but had a share price of $4/share, you can't purchase 1 full share. Fractional shares allow you to purchase, you guessed it, fractional values of shares, as low as .000001 pieces or $1 worth. This means you could automatically purchase .25 shares of X Corp. As a partial shareholder, the fractional value of the share also confers fractional claim to dividend distributions($0.25 in the X Corp example). This is very visible compounding growth. Important things to keep in mind, fractional shares have NO voting rights. Fractional shares are also non-transferable. You have to sell your position and use the proceeds to make a purchase.

    Areas for improvement

    Robinhood has a lot of good features. The things I'd want to see changed are:
    • Bonds: I would love to have access to the bond market. Granted, I don't know any of Robinhood's competition that offers this option but something to note.
    • Market Insights: Basic market data is free BUT market data that includes bid/ask spreads among other stuff. Gold gives you this information but competition offers this and more for free.

    It’s a wrap...

    Final thoughts If I talked you into it, please try out Robinhood and dip your toes in the water buying stocks and stuff. It's fun and educational. Watching stocks has lead me to be more well read on the new so I don't miss big stuff going on like the Fitbit-Alphabet acquisition and now more recently, Corona-conomy closures and bankruptcy and big wins. If you want to tryit out, here's the link again, Robinhood download. Like I said, my experience says recommend and try it.

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