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> Most people should arguably be putting their money into index funds and holding for the long term I think Robinhood is great for that! Zero commission means

> Most people should arguably be putting their money into index funds and holding for the long term I think Robinhood is great for that! Zero commission means you can afford to buy small amounts without worrying about fees eating into your principal too much. You can put in $250 every pay period and buy a share of $SPY without losing ~3% to fees. With commissions involved you'd want to wait until you could afford a larger trade, at which point you've lost time in the market.

jcdavis 9y ago
Vanguard charges no fees for buying/selling their owns ETFs. I believe Schwab and others do as well.
- meatbundragon 9y ago
  While this is a great point, the casual segment of the customer base that is being discussed would certainly not have enough awareness of this fact. At the very least, I didn't even though I do trade ETFs and large cap stocks casually...
  - AFNobody 9y ago
    I am sorry but "casual investors" should be doing long term buy and hold because if you can't be bothered to spend 30 minutes on research to compare brokerages, I am genuinely horrified at the idea of you doing anything other than buying and holding an index fund. Robinhood's encouragement of the instant gratification, poorly researched trades is going to end badly for many of it's customers when we enter a bear market.
    - meatbundragon 9y ago
      I disagree that investors' abilities to understand stocks and create portfolios should be judged by someone's willingness to find which individual brokerages offer free buy/sell of their own ETFs.
- deleted 9y ago
  [deleted]
- wgerard 9y ago
  True! That being said, using the Vanguard website is... significantly different from using the RH app.
  - dguo 9y ago
    The Vanguard website/experience is definitely not that user-friendly/modern. That's the main reason I usually recommend Betterment to my friends instead.
    - dlp211 9y ago
      Betterment, where you pay an extra quarter percent to buy Vanguard funds.
      - dguo 9y ago
        That's better than the alternative of not investing at all because Vanguard is not user-friendly. And I know that's possible because I have friends who were in that situation. If you sign up with Vanguard, you still have to pick which fund(s) to buy. If you don't know anything about investing, that can be a daunting task. With Betterment, the only decision you have to make is the percentage split for stocks vs. bonds.
        btmorex 9y ago
        Isn't that why Vanguard has their Total Stock Market and Total Bond Market funds? Basically, they're the "invest in these if you don't want to bother" funds.
        mcintyre1994 9y ago
        They also have LifeStrategy 0/20/40/60/80/100 so you can balance stocks vs bonds however you want, and have diversification handled for you.
        9y ago
- vasilipupkin 9y ago
  Their own ETFs - yes. But still a fee to buy other ETFs that aren't their own.
dguo 9y ago
That is true. I'm not saying Robinhood is all bad or can't be used in good ways. My concern is that overall, the product and marketing seem to be geared towards speculative, short-term trading. When I first signed up, the app was recommending that I check out stocks like Apple, Netflix, and Snapchat, not index funds.
- grahamannett 9y ago
  I can understand why they guide people towards investing in "hip" companies versus an index fund, but regardless why is their so much animosity towards robinhood on HN? Is someone getting into investing and investing in an Apple/Amazon/etc. not overall a pretty good entry point compared to opening up thinkorswim or the pretty atrocious (at least on mac) schwab desktop client? Investing a small amount of money is better than blowing that money on tons of consumeristic bullshit that that tons of people do and RH seems like a genuinely good stepping stone compared to the current incumbents in a lot of ways (fees/minimum deposit/super simple). The fact that you can even start with RH and then at a later date transfer to a brokerage once you have a large enough portfolio is also a huge plus in my opinion to people who may have otherwise never set aside that money in the first place.
  - dguo 9y ago
    I agree Robinhood is better than the incumbents in multiple ways. But at some time, other startups offer similar benefits while promoting an approach that is more likely to help the average person increase their wealth in the long term. I don't think Robinhood is terrible. I just think someone who doesn't know what they're doing would be better off starting with Betterment or Acorns, which are just as user friendly as Robinhood.
- wgerard 9y ago
  > My concern is that overall, the product and marketing seem to be geared towards speculative, short-term trading. When I first signed up, the app was recommending that I check out stocks like Apple, Netflix, and Snapchat, not index funds. There's a broad spectrum of public companies obviously, but it's hard to see $AAPL as speculative in the same sense that people call penny stocks or cryptocurrencies speculative (i.e. much, much more risk involved in the latter two). Investing in large cap equities isn't the stupidest thing you could be doing as a new investor - that award would certainly go to buying derivatives. And indeed if I have criticism of RH it's that they're trying to appeal to all investor types at the same time, new and experienced alike. It's easy to see how new investors can get confused when RH offers the ability to sign up for cryptocurrency trading and options trading, two things new investors obviously should not be doing (though admittedly there's obviously a questionnaire involved before you can be approved for options trading, not sure about cryptocurrencies).
adrr 9y ago
Etrade, Schwab and Ameritrade have commission free ETFs. Or you can just go to Vanguard and there's no commission if you buy their ETFs on their platform.
rak00n 9y ago
You can open a Vanguard account and buy $VOO for zero commission too.
arsenico 9y ago
You're paying fees for something different than just buying and holding an index ETF - and that is a long-term diversification across asset classes and georgraphies, regular automatic rebalancing of portfolios, goal-based investing with multiple financial goals, reporting, etc. I am not saying that buying a single S&P ETF is bad, but you can do so mych more for your financial future with robos, that it is basically incomparable. Edit: I also forgot an increasingly important diversification by asset manager as well.
saryant 9y ago
But that's not new? Vanguard has long offered commission-free trades of their ETFs and mutual funds. Same for many index fund providers.

jcdavis 9y ago

Vanguard charges no fees for buying/selling their owns ETFs. I believe Schwab and others do as well.

meatbundragon 9y ago
While this is a great point, the casual segment of the customer base that is being discussed would certainly not have enough awareness of this fact. At the very least, I didn't even though I do trade ETFs and large cap stocks casually...
- AFNobody 9y ago
  I am sorry but "casual investors" should be doing long term buy and hold because if you can't be bothered to spend 30 minutes on research to compare brokerages, I am genuinely horrified at the idea of you doing anything other than buying and holding an index fund. Robinhood's encouragement of the instant gratification, poorly researched trades is going to end badly for many of it's customers when we enter a bear market.
  - meatbundragon 9y ago
    I disagree that investors' abilities to understand stocks and create portfolios should be judged by someone's willingness to find which individual brokerages offer free buy/sell of their own ETFs.
deleted 9y ago
[deleted]
wgerard 9y ago
True! That being said, using the Vanguard website is... significantly different from using the RH app.
- dguo 9y ago
  The Vanguard website/experience is definitely not that user-friendly/modern. That's the main reason I usually recommend Betterment to my friends instead.
  - dlp211 9y ago
    Betterment, where you pay an extra quarter percent to buy Vanguard funds.
    - dguo 9y ago
      That's better than the alternative of not investing at all because Vanguard is not user-friendly. And I know that's possible because I have friends who were in that situation. If you sign up with Vanguard, you still have to pick which fund(s) to buy. If you don't know anything about investing, that can be a daunting task. With Betterment, the only decision you have to make is the percentage split for stocks vs. bonds.
      - btmorex 9y ago
        Isn't that why Vanguard has their Total Stock Market and Total Bond Market funds? Basically, they're the "invest in these if you don't want to bother" funds.
        mcintyre1994 9y ago
        They also have LifeStrategy 0/20/40/60/80/100 so you can balance stocks vs bonds however you want, and have diversification handled for you.
        9y ago
vasilipupkin 9y ago
Their own ETFs - yes. But still a fee to buy other ETFs that aren't their own.

dguo 9y ago

That is true. I'm not saying Robinhood is all bad or can't be used in good ways. My concern is that overall, the product and marketing seem to be geared towards speculative, short-term trading. When I first signed up, the app was recommending that I check out stocks like Apple, Netflix, and Snapchat, not index funds.

grahamannett 9y ago
I can understand why they guide people towards investing in "hip" companies versus an index fund, but regardless why is their so much animosity towards robinhood on HN? Is someone getting into investing and investing in an Apple/Amazon/etc. not overall a pretty good entry point compared to opening up thinkorswim or the pretty atrocious (at least on mac) schwab desktop client? Investing a small amount of money is better than blowing that money on tons of consumeristic bullshit that that tons of people do and RH seems like a genuinely good stepping stone compared to the current incumbents in a lot of ways (fees/minimum deposit/super simple). The fact that you can even start with RH and then at a later date transfer to a brokerage once you have a large enough portfolio is also a huge plus in my opinion to people who may have otherwise never set aside that money in the first place.
- dguo 9y ago
  I agree Robinhood is better than the incumbents in multiple ways. But at some time, other startups offer similar benefits while promoting an approach that is more likely to help the average person increase their wealth in the long term. I don't think Robinhood is terrible. I just think someone who doesn't know what they're doing would be better off starting with Betterment or Acorns, which are just as user friendly as Robinhood.
wgerard 9y ago
> My concern is that overall, the product and marketing seem to be geared towards speculative, short-term trading. When I first signed up, the app was recommending that I check out stocks like Apple, Netflix, and Snapchat, not index funds. There's a broad spectrum of public companies obviously, but it's hard to see $AAPL as speculative in the same sense that people call penny stocks or cryptocurrencies speculative (i.e. much, much more risk involved in the latter two). Investing in large cap equities isn't the stupidest thing you could be doing as a new investor - that award would certainly go to buying derivatives. And indeed if I have criticism of RH it's that they're trying to appeal to all investor types at the same time, new and experienced alike. It's easy to see how new investors can get confused when RH offers the ability to sign up for cryptocurrency trading and options trading, two things new investors obviously should not be doing (though admittedly there's obviously a questionnaire involved before you can be approved for options trading, not sure about cryptocurrencies).

adrr 9y ago

Etrade, Schwab and Ameritrade have commission free ETFs. Or you can just go to Vanguard and there's no commission if you buy their ETFs on their platform.

rak00n 9y ago

You can open a Vanguard account and buy $VOO for zero commission too.

arsenico 9y ago

You're paying fees for something different than just buying and holding an index ETF - and that is a long-term diversification across asset classes and georgraphies, regular automatic rebalancing of portfolios, goal-based investing with multiple financial goals, reporting, etc. I am not saying that buying a single S&P ETF is bad, but you can do so mych more for your financial future with robos, that it is basically incomparable. Edit: I also forgot an increasingly important diversification by asset manager as well.

saryant 9y ago

But that's not new? Vanguard has long offered commission-free trades of their ETFs and mutual funds. Same for many index fund providers.