I've written several times about my experience with Robinhood, an online broker that allows investors to buy and sell shares of stock, ETFs, options and even cryptocurrencies without paying a sales commission. Up until recently, the only weakness I found was that Robinhood required you to use a smartphone app; the website was not much more than a landing screen directing you how to download the app. However, the last time I went to their website, I found something new, and it looked a lot like what you see above. Yes, you can now buy and sell via Robinhood's website. So, let's take a look at the website and its features.
Appearance:
Beauty is in the eye of the beholder, and this beholder doesn't much care for the black background with white print.
What You Get:
The screen you see above is what I see once I've logged in. You can see that my portfolio lost value today ($5.52) but then gained in after hours trading ($1.88). On the right side of the screen, you can see a list of the stocks I own, and how much each is worth, as well as a chart showing its progress today (green for gain, red for loss).
If I click on the symbol for a stock, I am taken to a page like this. You can see that today, AT&T decreased in value, per the red chart. It shows that the current value of my AT&T shares is $316.26 and that my average price per share is $36.25. This screen also tells me that I own 9 shares of AT&T and that they make up 19.04% of my portfolio. From this screen I can both buy and sell my shares, and it tells me I have $4.12 buying power at this moment. I would guess that this is all pretty standard stuff for a stock brokerage.
Robinhood has a couple of interesting things on this screen that due to the size of the screenshot, you can probably barely see. Above where it says AT&T, are the words "100 Most Popular", "Telecommunications" and "Wireless". These are what Robinhood calls "collections", groups of stocks that have something in common. Click on "100 Most Popular" and you get
This particular collection is a list of the 100 stocks most popular with Robinhood investors. Besides the current price and how the stock performed today, I can see what percent of analysts recommend the stock. On the right side of the page is a simple stock screener that I can apply to the current collection. Of those 100 most popular stocks, only are recommended by more than half the analysts. Of those, only four are small cap companies. Three of those deal with drugs or health, and one, Plug Power, which I had never heard of before starting this article, provides alternative energy technology. As happened when I clicked the AT&T symbol on my homepage, clicking the Plug Power symbol took me to a page about them.
From the AT&T page shown above, if I click on Analysts' Rating, I am taken further down the screen where I see
I like the way it shows both points of view and tells you that 40% of analysts recommend buying AT&T, 57% recommend holding it, and only 3% recommend selling it. I wish I knew how many analysts they polled, and who they were. Perhaps Robinhood plans to monetize that information later, but right now, I don't see any way to access it. Still it is good information to use to screen stocks to pick those worthy of further investigation.
As I continue down the page, I see what is above--a graph of AT&T's earnings per quarter and my history with the stock at Robinhood. You can see that I will get a dividend on May 1 and if I click the word "Pending" it tells me that I'm going to get $0.50 per share for a total of $4.50.
Some stocks also have links to articles about the company and its potential as an investment.
Finally, the front page offers me links to articles. From what I can see, these, shown above, are just articles of general interest to investors as opposed to articles about my stocks.
Web or Phone?
I was a late adopter of smartphones--I got my first one a Christmas, and one of the reasons I wanted it was to run the Robinhood app. At this point, the app is easier on my eyes but the website has more information. Interestingly, the app also has the black background with white letters and it doesn't bother me.
Neither "collections" nor analysts ratings have made it to the app at this time, so I think if you are looking for a company in which to buy stock, more information is available on the web (and I prefer a keyboard and screen for any serious research.
How Does Robinhood Compare to Other Options?
Stockpile
Robinhood wins many comparisons to other online brokers. I have reviewed Stockpile, which offers gift certificates and supervised trading for minors. Robinhood does not offer either one, but it also does not charge $0.99 per trade, and it offers a much larger variety of investment choices. Stockpile offers fractional shares, whereas Robinhood does not. Stockpile engages in once per day batch trading, Robinhood offeres real-time trades. I prefer the appearance of Stockpile's website. If you want $5.00 worth of free stock, use this link to open a Stockpile account (and I get $5.00 too).
Motif
Motif offers free first opening price trades, or you can pay for real-time trades. However, if your account is under $10,000 Motif charges you a $10 account fee every other month. Also, Motif has started charging a fee for owning one of the "motifs" or baskets of stocks that they designed. Robinhood offers real time trades and no monthly account fees. While Motif allows the purchase of factional shares, Robinhood, as stated above, does not.
Vanguard
Vanguard is my favorite mutual fund company, hands down. They have a large portion of my net worth under their umbrella. However, I just "tried" to buy stock from them. The interface was easy, and I had no problem setting up the order. However, there was a $7.00 commission whether I was buying one share or a thousand. Clearly buying individual stocks via Vanguard is not realistic for people who don't want to invest a lot of money in any one company.
How Does Robinhood Make Money?
If a company is going to stay in business it has to make money. Otherwise, it ends up going out of business, like Loyal3 did, or it has to change its business model and start charging fees. Motif, for example, used to charge a $9.95 commission to buy or sell a "motif" or basket of stocks, but no monthly fee. Now they've reduced sales commissions but added a monthly fee for small accounts.
Robinhood says that they make their money by charging for Robinhood Gold, which is basically a margin account that allows after hours trading, and by the interest earned on uninvested money in stockholder's accounts.
How to Get Started
If you would like to invest with Robinhood, use my link and we'll both get a free share of stock. The last free share I got was Sprint, which has increased in value by 15% in the last month. Fill out a few simple forms, link your bank account and you are ready to go. Robinhood will even let you instantly invest up to $1000 that is en route from your bank to Robinhood.
While full service brokers may offer features Robinhood does not, if you are looking for a place to dabble in the stock market without paying a lot of fees, Robinhood is a great fit.
"Beauty is in the eye of the beholder, and this beholder doesn't much care for the black background with white print."
ReplyDeleteHaha. Totally agreed. It's odd how much it looks like a late 90s/early00 style website. It's not that difficult to make something a little easier to read and navigate these days.
Sounds like there's some good information on the website. For research, I agree that I definitely prefer a full scale keyboard and screen.
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