Are you interested in investing in stocks but don’t know where to start?
Or are you an experienced investor who enjoys monitoring your portfolio
quickly and easily? The Robinhood app can be great for both groups. It can help you
dip your toe into investing without paying huge fees. However, it’s lack of different
investment options and educational resources can lead uninformed investors to make risky decisions.
This is Christopher Smith of Clark.com, and today we'll be reviewing the Robinhood app.
So that you can decide whether this simple investment platform is right for you.
As you can see, as soon as you open the app on your phone and you punch in your four-digit PIN
code, the app immediately opens to this graph that shows your portfolio value as well as a chart of
its performance over time. And you can sort the timeline by one day, one week, one month, three
months, one year or all. And it will show you both in real dollars as well as in a percentage
how you're doing, whether you're going up or down and by how much. And you can see in the top right
screen, there's a button that you can press to get a free stock. This is an affiliate program where
if you share Robinhood with a friend and they sign up, each of you will receive a free stock. And
most of these stocks are fairly cheap, maybe around five bucks, but I believe it's
one in 20 receives a stock that could be something like a Facebook or worth more money.
You can also see your buying power from this screen, which is basically
the cash that you have that has not been invested currently. And below that,
there is a slider that has some notifications. Usually, this is based on the stocks that you
either have in your portfolio or the stocks that you have within your list that you're watching.
But it also gives you some information about big headlines, as well as really strong or really
weak performers for the day. So you can kind of get a sense if you're watching the stock market
from the app of what's performing well or what's not performing so well. Immediately below that,
you'll actually see the stocks that are in your portfolio. It tells you the number of
shares you've purchased, it's sortable so you can see the current price of a stock,
how much you've gained or lost since you have held this in your portfolio. You can also view this by
the percentage of increase or decrease since you put it into your portfolio.
Below that is actually a list that you can create to watch various stocks or equities. So
you can add or take away from this list. But overall, it's a very simple, straightforward
way to view certain stocks in one place. So it's a very convenient way to watch the stock market.
As you scroll down, you can put in things like cryptocurrency. You can also click on
the individual stocks in your portfolio, and it will show you the same portfolio chart
for the stock price over the same filters for the time, one day, one week, and so forth.
It will also show you your position within the stock, how much money that position is worth.
You can also view the chart. You can view a candlestick chart, which is relatively
new within Robinhood’s app, and it's fairly rudimentary still as far as candlestick charts
go, but it does at least show you the range of trading where there was a huge change
or where there was high volume of trading for that particular stock that you're looking at.
You can also click on the right arrow that's next to the current price of that particular stock,
and it will show you a few features that you could see if you had Robinhood Gold,
that includes Level 2 Market Data, where you can view the current bid and ask orders
for that particular stock. So you can get an idea of whether there's a lot of people
trying to purchase it or sell it right now, and maybe get a sense for whether the stock is
going to go up or down. You can trade on margins, which means you can make riskier options trades
by leveraging the money you have and trading on money that you don't even have in your account.
Trading on margin is a more advanced investing tactic where you can risk losing way more money
than you have invested. So if you’re inexperienced you may want to avoid this type of trade.
So, as you scroll down on the AUPH stock, you can also see the average cost at which you purchased
the stock. You can see what percentage of your portfolio that it makes up. And if you want,
you can set up a recurring investment. You can also see the average volume that this stock trades
at a daily basis, as well as some stats on today and the 52-week high and low,
and it will give you some analyst ratings as well. And you can also see the EPS
expected versus actual for the last several quarters.
And if you scroll down far enough, you'll also see some similar stocks that other
people bought who own this equity. And you can see your order history and a little bit
more information about this company. And if you click the button in the bottom right screen that
stays stuck there that says Trade, it will open up the screen that actually allows you to buy,
sell, or trade options on this particular equity. And if you select Buy, it will show you how much
money you have available in your account that you can use to purchase this particular stock.
And if you click on the down arrow in the top right hand corner of your screen,
you can also see the different options you have in terms of purchases. You can just
put in the amount of money that you want to buy in terms of AUPH stock,
or you can also buy fractional shares, which is something that's not totally unique to Robinhood,
but it's a nice option that allows you to invest in the stock market without a ton of capital. You
can also put in some conditional orders, which is a nice option if you're a more advanced investor.
This also gives you the option to trade options as I mentioned before. This has been a somewhat
controversial point of contention within Robinhood reviews, as they make it very, very easy and low
friction to sign up for Robinhood after answering just a few questions, as long as you have
the $2,000 in your account that is required by the federal government to trade options.
And without a lot of warning about how risky options trading is, you can jump right into
trading options with stuff that even for advanced investors is pretty complicated
and is a great way to put a lot of your money at risk.
And they have added some helpful information under this Discover button
at the top with a star by it. They give you now sort of basic information, it's still
fairly rudimentary and doesn't necessarily serve as a strong warning for
young and inexperienced investors who are not familiar with options trading.
You can also click on the magnifying glass in the middle of the bottom
horizontal nav menu, and it will allow you to browse by the different lists and groupings
that Robinhood has. I clicked on the 100 Most Popular circular button, and it shows you the
stocks that are the most popular and owned by the most people within Robinhood's app.
Robinhood is a good platform for two groups of people.
First, if you’re new to investing and want to learn, the Robinhood app offers
you a free and intuitive starting point. There’s no deposit minimum, so you can get
started any time with any amount of money. Robinhood offers free trades and fractional
shares also. You can buy $5 of Amazon stock rather than paying thousands of dollars for
one full share. You’ll get a free stock just for signing up. Overall,
the app makes trading easy and stress-free. Buying individual stocks, or simply
building a list of companies that you’re interested in and monitoring their progress
gives you a basic education on the stock market. Robinhood doesn’t have the same
research capabilities and tools of platforms like Fidelity and Schwab. But it’s great if you’re a
person who would rather learn by jumping in the deep end and investing relatively little capital.
The second group of people Robinhood is great for are long-term, buy-and-hold investors that
like to actively monitor their portfolios. Clark recommends this type of investing where
you don’t engage in the daily ups and downs in the market.
Some people like to monitor their portfolios just like a person may read the news every day. If you
are one of these people like me, and you manage your own investments, Robinhood is great. The
convenient access to simple charts straight from your phone, plus the free, simple trading, makes
the app appealing to these types of investors. Robinhood's ease of use is a double-edged sword.
It makes it easy to invest in risky ways that aren’t smart long-term strategies.
If you’re inexperienced but you’re tempted to make options trades or trade on margin, you should read
more about them first. It’s almost always a bad idea for you to pursue those potentially hazardous
trades. The same thing goes for day trading. No matter where you choose to invest or
what platform you use, it’s important to take personal responsibility. Don’t make
quick decisions with your hard-earned money before you understand what you’re doing.
Some of the smartest investors follow what some people may consider boring strategies,
building diversified portfolios of strong long-term companies and holding them for
many years. Solid long-term investing is not synonymous with the rush of a video game.
Have you used Robinhood or another investment app? Tell us about it in the comments.
Subscribe to our channel and watch some of our other videos to learn
how to manage your money wisely. And find more everyday ways to save at Clark.com.