Robinhood Stocks Review - Pros and Cons
Founded in 2014 by Stanford University alumni, Robinhood is on a mission to democratize the stock market. Its commission-free trading and no minimum account balances make it popular among millennials and other new investors. It offers a range of stocks, ETFs and cryptocurrency trading on its mobile app platform with no fees (except for Bitcoin transactions) and no minimum investment. The company also features a debit card-based spending account, which can round up purchases to invest the extra change, similar to the tactics used by robo-advisors Acorns and Stash. However, Robinhood’s lack of assets like fixed income, mutual funds and futures and its meager research and account tools are notable drawbacks for more advanced investors.
The app’s sign-up and funding processes are smooth and fast, though it has faced criticism for "gamifying" investing by using digital confetti in celebration of successful trades. The brokerage has responded by addressing some of the concerns, including lowering the amount of time it takes to trade and halting trading during GameStop-related volatility. Robinhood’s margin accounts offer competitive rates, with Gold members earning a higher rate.
Robinhood’s research offerings are somewhat lacking in comparison to other brokers, though the firm is working to increase its capabilities. For now, it resurfaces research from other users and third-party sources and provides charting functionality. The service also offers low-cost Level II market data from Nasdaq and Morningstar. In addition to a free account, Robinhood offers a paid premium tier called Robinhood Gold, which charges $5 per month and gives you access to additional research tools.