latest robinhood stock review and news

In its early stages, Robinhood stock stood out as a disruptor in the brokerage industry. Its biggest competitive advantage was not charging commissions for stocks, options, and cryptocurrency trading. That edge has been neutralized as most of the brokerage industry joined in eliminating commissions. Despite the increased competition on cost, Robinhood stock has developed a strong brand and niche market with young, tech savvy investors thanks to a clean design and user experience that focuses on the basics. The broker recently added cash management services and a recurring investment feature in an effort to attract new customers and deepen the financial relationship with existing customers.

Although Robinhood stock’s user base has grown exponentially in recent years, the success has brought more scrutiny to the company. In the last year, the platform has also received criticism for untimely outages and intentional trade restrictions amid market volatility. This led many to suspect a conflict of interest, spurring class action lawsuits and catching the attention of politicians. We’ll dig into some of this as we look at Robinhood stock and whether it is the right fit for your portfolio.

In June 2021, Robinhood agreed to pay $70 million to settle regulatory investigations related to misleading customers, approving ineligible traders for risky strategies, and repeated outages affecting users' ability to access the platform.
On April 7, 2022, Robinhood announced that it rolled out Crypto Wallets to every eligible person on the WenWallets waitlist of more than two million people. According to the company, all eligible customers who signed up for the waitlist will be able to send and receive any of the cryptocurrencies currently available on Robinhood.

Key Takeaways

New investors are attracted to Robinhood because of their low fees, zero balance requirement to open an account, as well as the easy-to-use interface.
Robinhood has a limited range of offerings. Customers can trade stocks, ETFs, options, and cryptocurrency, but there is no fixed income, mutual funds, forex, or futures trading.
Robinhood customers must pay $5 per month for Robinhood Gold in order to trade on margin, view market data, and access in-depth research reports provided by Morningstar.
Most brokers publish their trading statistics to aid investors with comparing payment for order flow. Robinhood does not disclose this information to the public.

Who Robinhood Is For

With more than 13 million users with an average age of 31, it is clear that Robinhood has positioned itself to be ideal for younger investors who want to get skin in the game—even if that means in small quantities through fractional shares.1

Robinhood’s overall simplicity makes the app and website straightforward and easy to navigate. If you’re interested in trying cryptocurrency investing, Robinhood can help. You will be able to use their platform to trade Bitcoin, Ethereum, and more. Robinhood has also expanded their options trading platform, making the broker a potential choice for options traders, although there are concerns about the quality of trade executions.

Pros

Very easy and simple to use
Low trading costs, access to fractional shares and cryptocurrency offerings
Good cash management and recurring investments features

Cons

Limited research and educational resources available
Limited investment offerings
Lack of transparency around payment for order flow

Pros Explained

Robinhood’s mobile app is extremely easy to use. Although the broker provides a web-based platform, it is a mobile-first company. This is a key area of differentiation between Robinhood and its competitors. The mobile app is not actually robust. In fact, its features are basic. But for investors who know what they want, the platform is more than enough to quickly move from screen to screen, and place trades.
You can trade stocks, ETFs, options contracts, and cryptocurrency for free. Robinhood allows you to purchase fractional shares with as little as $1. If you enable the dividend reinvestment program (DRIP) in your account, Robinhood will automatically reinvest any earned dividends from stocks or ETFs—provided the positions support fractional share trading.
Robinhood’s cash management features will allow you to earn .30% APY. You also don’t have to pay ATM fees at any of the 75,000+ ATMs in their network. The recurring investment tool enables you to automatically invest a fixed dollar amount periodically, such as once per month.

Cons Explained

Robinhood has little in the way of research or educational resources available for customers. If you want more than the basic stock quotes, you will likely need to subscribe to Robinhood Gold. Even then, Robinhood lacks resources when compared to its competitors’ offerings.
Robinhood doesn’t offer any mutual funds or fixed income investment products and you will not be able to trade any commodities, forex, or futures. Moreover, Robinhood only supports taxable brokerage accounts.
Payment for order flow statistics are usually published by brokers. It is the best way for investors to compare and ensure accurate and timely trade executions. Robinhood doesn’t disclose this important information to the public and loses points for this lack of transparency.

Usability

Robinhood is extremely easy to set up and use. Thanks to a mobile app with a clean design that focuses on the basics, Robinhood is an easy choice for investors who primarily use devices to manage their accounts. You can also use the web-based platform which has a similar look and feel to the app. Both platforms support the same order types and asset classes.

Once you log into the app, you will see a line chart that shows your portfolio value and buying power. You will find the main menu on the bottom of the screen, where you can easily use the search function to pull up a stock’s chart over multiple time frames. You’ll see information pertaining to the stock, including its highs and lows, market capitalization, and P/E ratio. Robinhood also provides a news feed, a composite of analysts’ rankings, and a company profile. When you’re ready to make a buy or sell decision, the trade button scrolls along with the page, allowing you to submit an order at any moment.

Overall, Robinhood’s user experience is pleasant and the app functions seamlessly. One caveat is that there is very little you can do to personalize or customize the app to your desired trading experience. The mobile app also lacks any charting or in-depth research tools.

The mobile apps and website suffered serious outages during market surges of late February and early March 2020. The founders said in a blog post that their systems could not handle the stress of the "unprecedented load" and pledged to beef up their systems.