Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. It’s notoriously hard to get ahold of anyone at the company. That’s part of how it has kept costs low. And that, along with mountains of venture funding, is a big part of why Robinhood has helped usher in a new era of zero-fee trading. This, as I’m sure you know, is a relatively new innovation. And boy oh boy, has it made it easier to get into the market. In the past, trading fees could easily eat up a small investing account. Now, even major brokerages have slashed their fees since Generally speaking, the various U.S. consumer protection agencies don’t get a whole lot of complaints about brokerage firms. The rules are pretty clear. And both sides are supposed to know how the game works. But over at Robinhood, things are a little different. This year, newly minted investors have filed more than 400 complaints against the company – roughly four times the norm for its competitors. The word in government circles is that some regulators feel like they’ve become the company’s customer-service department. companies like Robinhood have entered the scene. And that means the “dumb money” can gamble with smaller amounts without feeling like the house is taking too big a cut. Only have $20 to invest? No problem. The trade is free. Oh wait... That stock is $100 a share? Not to worry – Robinhood will sell you a fractional share you can afford.
The key for investors today is to ride the tide... then get off the boat in time as the tide goes out . I’m typically conservative... But there are times when investors must step out of that conservative way of investing. Now is one of those times.
PORTNOY’S BAND OF TRADERS IS FLOODING INTO THE MARKET
Dave Portnoy has become the poster child of the Melt Up investing mindset. But it’s not just him. In fact, brokerage firm Robinhood has come to define it. We’ve seen a rush of new traders lately – and the surge in visits to Robinhood’s “Learn” page shows it. Daily visits to that section of its site soared 250% between January and June. Sentiment data wizard Jason Goepfert of SentimenTrader.com has been tracking trading activity on Robinhood, too. The numbers have been staggering... For example, just take the number of Robinhood traders holding leveraged broad market exchange-traded funds (ETFs). In December, the number was roughly 20,000. As of May, nearly 100,000 Robinhood users were holding leveraged ETFs. That is a stock market frenzy at work. This is the Melt Up in action. If you want more proof that Robinhood has become ground zero for retail-investor mania, you just need to look at the complaints...
American Consequences
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