Robinhood for the Web: My Review

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.  

*Part of Financially Savvy Saturdays on brokeGIRLrich.*

Low Cost Brokers: Robinhood vs Motif vs Stockpile

Until recently, one thing that kept small investors from investing in individual shares of stock vs mutual funds was the fees charged.  Most brokerage houses had a minimum fee per transaction and if that transaction only involved a few shares, the fees made it cost-prohibitive.  The advent of the internet and electronic trading has made it possible to reduce those fees considerably, to the point that it is possible to buy a single share of stock in one company or even fractions of shares.  Let's take a look at a few of the companies set up to serve small investors.

Stockpile:

Stockpile charges $.99 per trade, and offers a large selection of stocks, though not the entire market.  The market they seem to be trying to reach is that of the young and inexperienced investor.  Stockpile's website includes a "Learn" section which includes articles on such topics as "What is an Exchange?" and "What Is NASDAQ?".  The articles are short, informative and easy to read.

Another way Stockpile reaches small investors is by offering fractional shares.  As of this writing, Amazon stock costs $1448.69, which is more than I want to invest in any one company.  Stockpile allows me to pick any dollar amount to invest, so that I could invest $145 and get 1/10 of a share of Amazon, or $14.50 to buy 1/100 of a share.  

A unique feature of Stockpile is that they offer gift cards, either physical or virtual.  With Stockpile I can choose to give you stock in Disney rather than Disney bling.  However, when you go to redeem the gift card, you are allowed to invest that money in any stock you please, so if you prefer Universal to Disney, go ahead and switch (and you don't even have to tell me).  

Stockpile does not charge account maintenance fees and they do not offer IRAs.  However, they do offer custodial accounts for minors.  With these accounts, an adult custodian is responsible for the account, but it is owned by the minor.  Minors can be given their own log in information.  The only difference is that when a minor tries to enter a buy or sell order, the request is routed to the custodian for approval.  

If you want to get started with Stockpile, clicking this link will give you $5.00 worth of whichever stock you want.

The main disadvantage of Stockpile is that trades are made at the closing price the day you order them.  You cannot make a quick choice to get out NOW, and, if the market drops noticeably between the time you requested the trade and the time it executes, you may find that you don't get the price you were expecting.

Stockpile charges $.99 per trade, so if you are buying a very small amount of stock it could get expensive on a percent of assets basis.  I recommend a minimum investment of $100.00.  Other fees include a 3% debit/credit card fee (though you can transfer money from your bank account at no cost) and a $2.99 gift card fee.  While there are other fees, these are the ones most investors will be most likely to see.

Motif

Motif's claim to fame is enabling small investors to buy fractional shares of a variety of companies in one basket, dubbed a "Motif".  Motif offers some professionally designed motifs as well as many designed by ordinary people.  If you design a motif and convince others to buy it, you will get a sales commission.

The minimum amount of money necessary to invest in a motif is $300, and each motif can contain up to 30 different stocks.  

Motif recently changed its fee schedule.  Now, you can get commission-free next market open trades of both individual stocks and professionally designed motifs.  If you want to trade in real time, professional motifs will cost you $9.95 per motif, a motif you build is $19.95 per trade or if you want to trade single stocks, the fee is $4.95 per trade.

For larger or more active investors Motif offers "Impact" or "Motif Blue" accounts.  An "Impact" account is a fully-automated portfolio what is automatically rebalanced and which has a composition that changes as you age.  Regarding the cost of an Impact account, Motif says "The fee structure for a Motif Impact account, that provides a fully automated portfolio aligning your financial goals with your values, is 0.25%, expressed as an annual fee rate."  A "Motif Blue" account is one in which you pay a $19.95 per month fee in exchange for three "free" real time trades per month, plus real time quotes.  If you would like to try Motif Blue, click this link and you will get three months free.  

Motif is now charging $10 per quarter for each account that is under $10,000 and which has had no commissioned trades in the last three months.  In my opinion, that cost is high, percentage-wise, if your account is much under $5,000.  

Right now I own eight professionally designed motifs, most of which were purchased when Motif was offering them at no commission as "motifs of the week".  I also own one that I designed, which I did pay a commission to purchase.  Today I made my first use of the commission-free trade service and used my accumulated dividends to buy a fraction of a share of NVIDIA.  

If you would like to try Motif, use this link; you'll get three months of Motif Blue (and then you can decide whether to keep it or not) and I'll get one.

Motif's strength is allowing you to spread a moderate amount of money among a large number of stocks for a relatively low amount of money.  However real-time trading will cost you, and fees will disproportionately affect small accounts.  

Robinhood

Robinhood is a smartphone app only (for now) brokerage.  They are planning a webpage but it is not live yet.  The app is available for both Apple and Android phones.  

While Robinhood does not offer IRAs, it offers margin accounts and is in the process of rolling out options trading and crypto-currency trading.  

Stock trades on Robinhood are in real time but most users are not allowed more than three day trades (buying and selling the same stock on the same day) per five day window.  Trading on Robinhood is commission free, which makes it easy to buy and sell one share of stock at a time.  

One nice feature is "instant deposit".  Once your bank account and Robinhood are linked, you can deposit up to $1,000 into your Robinhood account and have instant access to it.  When the market fell quickly last week, I deposited an additional $200 in my account and went shopping.  I did not have to wait for the check to clear.

Robinhood offers a margin account, known as "Robinhood Gold" Besides allowing you to borrow money with which to buy stocks, a Robinhood Gold account allows you extended trading hours and a larger instant deposit.

I find the Robinhood interface to be easy to use.  When I log in I see my account balance, along with how much it moved that day.  As I scroll down I see each company in which I own stock with a notation of how many shares of each I own.  There is a small graph that shows whether the stock is up or down for the day, and the latest price per share.  If I click on any company, I get a graph that shows its movement in the last day, week, month, three months, year and five  years.  I can click to buy or sell.  I can scroll down and see what my equity value (shares times share price) is, and how much my average price per share was, and my percentage return both in total and today.  I can see my history with the stock, along with an earnings chart.  Often there are links to articles about company.

If you would like to invest via Robinhood, use this link and we both get a free share of stock.

So, Which Is the Best?

Honestly, it depends.  I have accounts with all three.  Right now, I have little reason to use Stockpile.  My Motif account is almost $10,000 and with their new pricing structure, I plan to bring it up to that level soon, thereby eliminating the quarterly charge.  For people who have an account big enough to avoid Motif's fee, I'd recommend using it to purchase fractional shares, as you can do so without commission.  If you do not have that much money and want to be able to purchase fractional shares, I'd recommend using Stockpile for that purpose.  

For purchasing shares in companies you can afford to buy full shares of, I'd recommend Robinhood.  It is free, easy to use and trades in real time.  The only downside is that you have to use a smartphone, at least right now.  

Motif is the only one of these companies that offers IRAs, but unless you have $10,000, the fees get high.

If you are interested in opening an account with one of these companies, please use my referral links.

Review and Giveaway: Stockpile: The Beginner's Broker

Those of you who follow this blog know that I used to invest via Loyal3, a free online brokerage which allowed investors to invest in the stock market at no cost.  The "catches" were that it only offered about seventy stocks, it only traded them once daily and you could not name the price you were willing to pay or accept to buy or sell.  Unfortunately, Loyal3 went out of business, probably because the ways it was trying to monetize did not provide enough revenue.

I was recently approached about writing an article about Stockpile, a new online stock broker. After poking around their website and speaking to a representative, I decided to open an account.

Opening An Account With Stockpile

Opening an account with Stockpile is straight forward, though it is not immediately apparent where to do so.  Here is a screenshot of their homepage:

It is clearly trying to get you to push the "Buy Stock" button, and doing so will eventually get you to sign up for an account, but at first it made me think the only way to buy stock was with a credit or debit card.  Fortunately, that's not true.  If you click on the Log In button it will lead you to register and to link your bank account, if desired.  

Completing the forms was simple and the requiste micro-deposits were in my account in less than 24 hours.  After verifying the amounts, I was all set.  I transferred some money into my account and was told I could do so by debit card ($0.25 fee for most debit cards and funds available right away) or by bank transfer (free but it takes three business days).

Buying Stock at Stockpile

Stockpile offers four different ways to buy stock:

• With cash:  Transfer money from your bank account to stockpile and use it to purchase stock.  This method costs you $0.99 per trade
  
  
• With a Credit or Debit Card:  If you don't want to link your bank account or if you want some float between the time you purchase the stock and the time you pay for it, you may use your credit or debit card (no float with a debit card). This costs you the $0.99 trading fee plus a 3% debit/credit card fee

• By Purchasing a Gift Card:  If you want to give stock to someone as a gift, Stockpile offers both conventional and e-gift cards.  You pick both the amount of money you wish to spend and the company in which you would like have the recipient invest.  As the purchaser you would pay the fees which are  $2.99 for the first stock, $0.99 for each additional stock, and 3% credit/debit card fee.  For example if I wanted to give you $50, split between AT&T and Ford, I would pay $5.48 in fees.
    
• By Redeeming a Gift Card:  If someone gives me a gift card, I can invest the face value in any stock(s) I want, despite what the giver selected.  I can also redeem it a retailer gift card if I don't want to own stock.  Since the purchaser paid the investing fees, I don't have to pay them.

No matter how you choose to pay for your stock, Stockpile sells it by the dollar, not by the share.  Investors end up with fractional shares, depending on the cost at the time they invest.

Also, Stockpile only transfers stock once per day.  Buyers pay that day's closing price for their shares, and that's what sellers receive.  While this is fine for people who plan to buy and hold, those who day trade or want to be able to sell within  a few minutes will need a different broker.

Information Available at Stockpile

Looking at Stockpile's website, I definitely get the impression it is targeting investing beginners, not long-time sophisticated investors.  There are catchy graphics and articles about such topics as "Why Do Stock Prices Go Up and Down?".  The articles are short, easy to read and informative.  I recommend them to anyone who wants a quick easy way to learn about investing in the stock market.

Once you are done learning about the stock market, simply click on "Return to Homepage" to get back to the investing side.

On the investing side, Stockpile offers a little information about all the stocks it sells.  If you click on the name of a stock as if to purchase it, you are shown a diagram of the price of that stock the previous day, week, month, year and for the lifetime of the stock.  You can click to Stats and get information like that shown above.  The News tab links to news articles about the company and About gives a short description of the company and its products.

Advantages of Stockpile:

1. Stockpile operates on a per dollar basis rather than a per share basis.  This allows the investment of relatively little money in companies with high share prices.  
   
   
2. Fees can be low.  A quick search told me that the average actively managed mutual fund has a yearly expense ratio a little over 1%, and that index funds are about 0.2%.  Those are numbers I keep in mind when considering brokerage fees.  If I pay too much in fees, I don't make money.  If you purchase $100 worth of one stock from Stockpile using cash transferred from your bank account, your expense will be about 1%, which I think is reasonable for a buy and hold investor.  If you purchase significantly less than that, your expense ratio becomes less reasonable.
   
   
3. Website is very visual and organized to make it easy for a beginner to use.  There are limited choices (though not as limited as Loyal3) and the only thing they sell (at this time) is stocks and ETFs.  They do not sell bonds, options etc.
   
   
4. They allow you to set up an account for a child, and allow the child to trade in that account subject to your approval.  
   
   
5. Stockpile makes it easy to give the gift of stock to someone else.

Reasons Stockpile May Not Be For You

1. Purchases and sales are recorded only once per day, at the closing price.  If you hear the market is dropping and you want to cash out NOW, it isn't going to happen with Stockpile.
2. They don't offer every stock (though they have a large selection).
3. They don't offer IRAs
4. They don't offer margin trading, though they do allow you to use your credit card to purchase stock.

Giveaway:  $5.00 Worth of Stock

Stockpile wants to help people learn about the stock market, and what better way than to have some money involved?  Stockpile is offering all of my readers $5.00 worth of stock.  You never  have to buy another share (or fractional share).  You know there is a stock out there that you have thought about buying but....well here is your chance.  Use Stockpile's money, buy the stock, and if it skyrockets, well, that $5.00 could turn into $50 or $500.  If it crashes, well, it was Stockpile's money, not yours. 

I thought about putting up a Rafflecopter gadget and making you think you had to do all sorts of things for a chance to win this $5.00, but no, it is for everyone, just click here. When you do that, this nice blogger gets paid too.  

If you are a beginner who is looking for a low cost way to dip your toes in the stock market, Stockpile may be the place to start.

Securities offered through Stockpile Investments, Inc. Member FINRA www.finra.org / SIPC www.sipc.org.

*Part of Financially Savvy Saturdays on brokeGIRLrich.*