When investing in single stocks on a budget, paying a $5 or $10 commission every trade can make a big difference on overall earnings. The people behind the app based trading tool Robinhood are looking to take on the big players in the marketplace and give power to the millennial aged demographic looking to get into stocks for the first time.
After downloading the app, Users create their account using their personal information, their social security number, and other identification information. Next, you can transfer funds from your bank account into the app to start trading. One important limitation of Robinhood is that the platform typically takes about 3 days to move funds over $1000 between your bank and the company’s assets tab. While the trades are cheap, this is not really a viable day trading device if you are looking to get into more frequent money movement. You can use the search bar at the top of the home page to look at any ticker on the Nasdaq or S&P 500 to invest in, and the user interface is minimal but informative. You can create a watchlist of your favorite stocks as well as easily browse your current holdings and the earnings related to them. There are no real research tools to speak of within the app and this means that choosing what to invest in really requires that you use external websites for analyst opinions. Picking a stock like T-Mobile (TMUS) which I covered recently only gives simple information, so it pays to be patient and look on Marketwatch, Yahoo Finance, or other places for company fundamentals. NerdWallet published a great article that covers all the pros and cons of the app and the trading platform as a whole that you should read before committing to Robinhood fully.
Users who have tried the platform have started with only $100 or less and have been able to grow their wealth and assets without expensive minimum balance limits, pay to trade stocks, and load fees on their funds. The New York Times just posted an article on the company and the disruptive nature of their trading platform. Mutual funds, options, and other higher skilled trades can not be performed using the app, but this platform is great for small transaction single stock, short or long term trading strategies. For a starting college student with minimal capital, Robinhood can get your foot in the door and give you a chance to learn the markets with potential for real gains as well.