Last week I opened a Robinhood account. Here's what I think
In talking to young adults, one investment company name comes up constantly: Robinhood.
What do you think of Robinhood? How does it compare to Fidelity or Charles Schwab?
Last week, I did some research to be better prepared to answer these questions.
I went to Investopedia which is a superb source of information and explanation for all things financial. Investopedia provides investing and finance education along with reviews, ratings, and comparisons of various financial products such as brokerage accounts, with 17 million unique viewers each month.
Sure enough, they had a lengthy review and rating of Robinhood, as well as other major brokers. In the area titled, “Who is Robinhood For,” Investopedia said the following:
“Robinhood is best suited for newcomers to investing who want to trade small quantities, including fractional shares and cryptocurrencies, and require little in terms of research beyond seeing what others are trading. Robinhood's overall simplicity makes the app and website very easy to use and charging zero commissions appeals to extremely cost-conscious investors who trade small quantities. That said, the offerings are very light on research and analysis, and there are serious questions about the quality of the trade executions.”
Investopedia gave Robinhood an overall score of 2 stars out of a possible 5.
They gave Fidelity 4.5 stars and Charles Schwab 4.
Comparatively, Investopedia does not think highly of Robinhood.
Despite the poor review, I was undaunted. I wanted to see for myself what Robinhood was about and compare it to my experience with multiple brokers, both online and full service.
Last week I opened a Robinhood account.
Good news: it was substantially easier to open the account as compared to a Schwab or Merrill Edge account. It was also a snap to link it to my bank account. The best news was that when I transferred over an initial $200, Robinhood GAVE ME one share of Microsoft with a value of slightly over $200. In the first 15 minutes working with Robinhood I doubled my money.
Bad news: the feel of the web site is more videogame than serious investing tool. I found the colors, graphs and emojis distracting.
I will keep followers of The Roadside Scholar informed as I go down the road with Robinhood and see if my ratings jibe with Investopedia’s. I hope they give me more free stock. That would make things more fun and more rewarding.
Roadside Scholar Tip: Robinhood may be good or mediocre, but doubling your money in 15 minutes is always great.
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