What’s with this Robinhood app the promises free trades? Are they reliable and will my money be safe if I invest with them? Do they really offer free trades and what’s the catch? Watch to find out more.
How’s it goin everybody this is pete the bush today i’m going to review the robin hood app which offers commission free trades on stocks and etfs you might wonder how the heck did they make money if they don’t charge anything for the portion of the cash balances that you did not buy any securities with they take that and earn interest off of it not everyone is
Going to always have 100 percent of their cash invested into a certain security sometimes you might want to sell it and you’re going to have a bunch of cash sitting there for a while until you’re able to find another security that you want to buy other times you might buy some shares and you might still have a little bit of cash left over and an aggregate of a lot
Of users they have a lot of money sitting there which can earn them a lot of interest this is also sort of like paypal where when people make money off ebay they put it in the paypal account and sometimes they leave it in there you don’t earn interest on that and instead paypal makes money off of that this robin hood thing is sort of like a freemium type of model
Where they offer everything for free initially totally optional but you can choose to pay the premium model at $10 a month and you can get access to margin trading and also after-hours trading now this app requires you to have a smartphone so if you don’t have one you can’t use it because they don’t have a web interface for this this is the startup in palo alto
It’s funded by a lot of the big vcs already and it’s started by two high frequency traders and currently they have over 1 million users as with any kind of brokerage account they are a member of si pc which means that if at any point somehow they go away this company goes away you will be insured and you will actually lose all your security suddenly interesting
To note is that 80% of their customer base is actually millennials which means you’re aged 18 to 29 that are actually using this app the main selling point of this app and they pushes really hard is that there’s no training fees and also no mendham about now if you ask me this is not the only place with free trading i actually use mayor edge from bank of america
And you can actually get free trades there as well this is the preferred platinum rewards account of course you need to have $50,000 of investable assets in your merrill edge account and then you can get 30 free trades a month if you happen to have 100k or more you can get one hundred free trades a month the difference here with merrill is that you’ll also have
An app on the phone and you can also trade online if you have $50,000 of assets you can have free after-hours trading you have the analytical tools you can use it on your computer and you also have options trading all those things i listed are not available on the free version of robin hood app so this tells me that this is really great for people just starting
Investing and they only have a few thousand dollars but once you start building it up all the way to let’s say 50 thousand dollars you might want to think about switching it over to merrill edge where you can get access to some free stuff the app actually doesn’t have a lot of investing tools built in so you probably have to use other tools to look at your research
Such as you can use a bloomberg news app you can use the one that’s built into ios there’s a bunch of news in there if you go on the google portfolio they also have a bunch of news i’ll relate it to a certain ticker symbol that you’re looking at you can either sign up on their mobile app or go to their web page and click sign up fill out a form put your username
Password and click continue then they’ll ask you for your contact information just fill everything out and continue again they do ask you for your date of birth and social security number because whenever you do trading it has tax implications after you’re done filling everything out you can fund your account easily through one of the popular banks over here like
Bank of america chase wells fargo pnc etc after you download the app just click it and to enter into it just put in your pin you see i put a whole dollar in there so far but let me go in there check out pck which is the pimco california municipal bond fund – and you can see a one day chart here too bad they don’t mark which hour it is got one week and they don’t
Mark which day it is so you just got a cunning eyeball it one month three months one day year five years and you click buy it’s going to ask you how many shares buying low-cost index funds is probably a little bit more sane so let me put in vo o vanguard s&p 500 and you can see over five years here wow it made 99 percent more it doubled over one week is the
My one percent over one month is – 1.6 percent so i do like the black background here it’s really easy on the eye and then you can go transfer to robinhood automatic deposits there’s the refer friends here but i don’t think there’s any referral fees it’s just referring your friends just for the sake of it account over here and then it has these date range thing
If you get too active on it it’s going to trigger a date rate thing this whole app of course kind of tempts people to do day trading because you go oh it’s free ok i’m just going to do trade here trade in and trade out if you just find index funds on the monthly basis that’s okay but then if you start doing day trading you really got to know if you’re investing
Or gambling so i’ll put that video over here which i did a little while ago don’t forget to give me a like on this video comment down below let me know if you’re going to try out this robin hood app if you’re interested in supporting this channel i have an audible link down in the video description below we can get a free audiobook through the free trial i also
Have a patreon link over here and don’t forget to subscribe thanks for watching
Transcribed from video
Free Trades with Robinhood App | BeatTheBush By BeatTheBush