Robinhood is a stock trading app that is popular with millennials. What’s great about it is that you can buy and sell stocks without a commission charge. Other stock sites can charge around $6.99 per transaction.
I have used Robinhood to play around with buying stocks in an effort to learn. I have no technically legitimate stock research advice to give, but here are a couple of things I’ve learned through the app and associated research:
- The fact that you can buy and sell for free is great, but also has some downfalls. Since there is no barrier to a purchase (once you have cash in your account, which can take a few days), I found myself buying stuff on a whim rather than doing hardly any research. I would be bored riding the train and next thing I know be sliding right to confirm a purchase off of some random inclination I had gotten.
- Start Small – I started making deposits of around $100.00 and would wait a specified amount of time before depositing again, just so I didn’t get overzealous and really blow it. Robinhood can take some time from the time you deposit until you can actually trade that money, which can also be good to prevent impulsive trading. There are tax implications of making trades, so that’s something to keep in mind as well.
- Playing around with different purchases can help you figure out your investing style. There are dividend growth investors, growth investors, day traders, technical traders and many more. When I received a dividend through the App for the first time (in the massive lump sum amount of $0.75) I was ecstatic. I loved the idea of getting a regularly scheduled payment, no matter how small. I like to maintain a mix of dividend stocks and riskier growth stocks.
- Don’t trade what you read in the news- Robinhood has a feature where it aggregates some news stories pertaining to the stock you are looking at. It isn’t uncommon to see one article recommending something and another recommends something totally different right next to each other.
I’ve been at it for about a year now – here has been my bottom line:
- Haven’t come out w/ any huge gains or huge losses. I fluctuate between being around 15% down to 15% up at any given time.
- Biggest win: A stock for a company that was bought out and went up 90%. I only had 5 shares so I didn’t make a ton, but it still felt like a big win.
So, is this helping me get richer? Not so far. I’m far from being competent but I have, however, learned some using it. Anyone, including experts, can loose large sums of money trading individual stocks. It is basically a form of gambling when it comes down to it, so I’ve kept my risk pretty low risk as I don’t put anything into it I can’t afford to lose.