Bad Things I've Heard About the Robinhood App -- with David Moadel
welcome to looking at the markets with David Modell I have a lot of clients who
I coach on skype or by phone for their trading and investing and often times
they ask me about brokers they want to know about a low-cost or no-cost broker
and they'll ask me about Robinhood sometimes whether I think it's good or
not good I am NOT going to take a side I'm gonna remain neutral as to whether
it's good or bad and I'm just gonna tell you what I've heard I'm gonna report it
to you and you can decide for yourself okay
and these are all just allegations I don't know if they're true or not
allegedly the app crashes sometimes which for me would be a deal breaker if
that's true imagine being in the middle of making a really important trade a buy
or sell order and the app crashes that's not good that can be very costly
allegedly it's missing the more robust trading platform and features you'd get
with other brokers I'll let you decide that for yourself I definitely think
it's a good idea for most people to have more than one broker and then you know
pick and choose the one that you like the best try out their platform see if
you like it allegedly market buy orders execute above the current price I don't
know if that's true or not I certainly hope that's not true I mean
you might get price movement where there's some slippage between the time
that you hit that order button you know the buy or sell and when it actually
executes yeah the order can execute above the
current price that's true but if it's way above or if that happens
consistently that's not good one possible solution regardless of what
platform you're using is to always use limit orders to buy stocks I'm not
saying you have to do that but that's one way to solve that hopefully possibly
allegedly they have poor customer support that would be a deal-breaker for
me I want to be able to contact my broker and get support I want to get
help when I need it and finally allegedly I don't know if
this is true or not but allegedly they sell their customers orders to
high-frequency trading firms or market makers and make a lot of money from that
practice now I have no problem with my broker making a lot of money and even if
they sell my orders to other trading firms or market makers as long as the
orders get executed promptly and at a good price I think I might be okay with
that although if they're selling my data my personal data or my financial data to
somebody else to a third party I might have have a problem with that so again
that's just an allegation I don't know if that's true or not I'll let you
decide on that one and then there's an article here that I found that's it's a
little bit of an old article but eight reasons why you shouldn't invest with
the Robin Hood app according to Dan price from make use of dot-com I'll put
a link in the description below this video first let me note that here's one
e Trade ad and then I think I found one - mori trade ads here at least so you
know they're I don't know you know if they're necessarily going to
recommend Robin Hood if they have all those etrade ads I don't know I don't
know what's going on there necessarily all right but let's see what Dan price
has to say I'm not saying I agree or disagree with this lack of integration
with other apps like he mentions mint quicken personal capital I don't use any
of those so but if you do that might be a concern I don't know it doesn't really
interest me that much right now at least unshared interest profits we kind of
talked about that but this is a little bit different modern brokerages double
as giant lending organizations they use the cash balances in clients accounts to
fund margin accounts and buy low risk bonds according to this article and
they're saying that for example TD Ameritrade Interactive Brokers Schwab
and so on if you just leave your cash in the account depending on the type of
account they may pay you interest payments yeah
I've received interest payments from putting my cash in brokerage accounts
but they're very very small and they don't happen very often you know once in
a while I'll find a small relatively small amount of money from interest and
you have to I've had to pay taxes on that interest so you know it's not
really that great it's nice it's fine if you just have cash sitting there might
as well make a little bit of money off of it
but I mean I've kind of paid that back and more through the commissions and
fees whereas yeah okay so you're not making
you're not earning the interest but you're not paying commissions either so
I guess that might balance out possibly so that I don't know look if they lend
out the money the cash that I put in there I don't know if I care that much
again as long as they're not giving out my personal or financial data to people
I don't know I don't know that this is just an allegation I'm not sure if I
care about it that much if that's what they have to do to keep it free maybe
it's all right that's for you to decide delayed stock quotes again I don't know
if that's true but that yeah that if that's true that's a deal-breaker for me
if the the quotes are really really delayed so that's something you'll have
to try out what you could do is again I'd often recommend that people try out
a number of brokers and pick the one that's best for you maybe try a few
different brokers try their platforms and see what the quotes look like
compare them and contrast them and see which ones have the best quotes all
right the poor customer service we talked about that one Dan price here is
saying it's notoriously bad hmm interesting
users complain of waiting weeks for an answer in the Help section lengthy lines
to speak to somebody on the phone no responses to email general lack of
urgency and responding to issues so mmm I don't know I hope that's not true
unimpressive watch lists options I don't know I don't really use my
broker necessarily as a watch list and they recommend Yahoo Finance which I've
used market watch you could use that one I don't know if that's a big deal
charting yeah I mentioned that you know some people don't necessarily care for
the charts the plant the platform as far as the charting and reporting is
concerned lack of account types yeah I read this one I don't know if I care
personally but if you're interested in certain types of accounts the Dan price
here mentions joint accounts trust accounts IRAs whatever I mean okay if
that's your thing that's cool then maybe Robin Hood might not be for
you lack of investment types I don't know if I agree with this one I I think
the fact that Robin Hood offers cryptocurrency trading options trading
and stock trading I mean that's pretty good I don't know I don't have a problem
with that so should you avoid Robin Hood that's up to you I'll let you decide on
that one and keep in mind that Robin Hood is not the only free no cost
trading option out there there are other ones so look around and make your own
decisions and there are also really low-cost ones there are quite a few
brokers that charge five dollars or less per trade and you know over the long
term that yeah that adds up but if it gets you better customer service and if
it gets you faster more accurate executions
you know the filling of your trades then might be worth it to pay a few bucks
alright so I'll let you decide what you're going to do on that but I'm
trying to bring you the information that can help you as a trader or investor if
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so you'll know right when these kinds of educational videos come out and if you'd
like some help with putting together a trading or investing plan that's one of
the things that I do and I really like to do it so you can email me at David
Modell at gmail.com thank you so much I appreciate it I'll talk to you again
soon