We hear about investing in the news, on TV and from our parents, but many young college students still don’t know how to invest in the stock market or don’t think they have enough money to do so.
According to Business Wire, a recent survey by Harris Poll has found “that nearly four in five millennials (79 percent) are not currently investing in the stock market…70 percent of millennials think they need at least $100 to start investing in the stock market.”
Robinhood is a commission-free stock trading mobile app that has recently received a valuation of $1.3 billion after four years of operation, according to TechCrunch. And it may be the solution to millennials’ fears about investing in stocks. Geared toward a younger generation of people who want to get involved in investing but lack the know-how, Robinhood offers a sleek and simple platform without many of the perks catered mostly towards serious investors.
I started using Robinhood last October because I was interested in investing and wanted to have the freedom to trade commission-free, unlike most brokerage accounts, which usually charge a minimum of $5 per trade. The appeal of Robinhood is its simple-to-use app that makes it easier for a younger generation of adults with little investing experience to trade in the stock market.
Like the Stocks app on the iPhone, Robinhood offers similar research on each public company including graphs of stock prices over time, basic financial data, and news reports. However, it doesn’t offer the deep market research and multitude of features that other more advanced services like OptionsHouse and TD Ameritrade do.
· Actually commission-free trading on stocks and ETFs (no hidden fees)
· Mobile app
· Simple to use
· No account minimum
· Easy to set up
· No computer web app
· Can only can trade stocks and ETFs
· Not yet established (still a 4-year old startup)
· Poor customer service
· Little research and data on stocks
Comparison between Brokerage Accounts (For Beginners):
Data from nerdwallet.com
As a college student and an investor with little experience, I would recommend Robinhood to people who are interested in investing and want to get started quickly and easily. Before you get carried away picking stocks and making trades, be wary that any investing involves real money, and the risk of losing that money always exists.
Remember to diversify your portfolio, which means buying stocks in different industries. Also, a little bit of research on the company you plan to invest in can help you make a more educated decision. With some basic investment knowledge, Robinhood can be a great way for college students to get some investing experience and make some cash along the way.
How to Start Investing: A Review of Robinhood was originally published in The Northwestern Business Review on Medium, where people are continuing the conversation by highlighting and responding to this story.