Robinood Versus Vanguard/Brokerage Account

Office Hours
#1

Can someone share some light on the following:

  1. Is investing in a brokerage account better than investing in Robinhood?
  2. Does Robinhood have Index Fund options? Or is it just ETFs?
  3. If they offer Index Fund options or ETFs, would investing in Index Funds/ETFs in Robinhood be the same as investing in Index Funds/ETFs in Vanguard?
  4. Is Robinhood designed to encourage more day trading versus buying and holding?

I guess I’m just trying to understand why people advice against Robinhood and if it would impact your future wealth.

#2

Robinhood is a brokerage and you open a brokerage account with them. So those aren’t really two things you can compare. Although, I prefer more traditional brokerages like Vanguard, Fidelity, or Schwab as they have better access to index fund. Betterment is a great option if you want a fancy modern user experience.

Just ETFs as far as I know.

Basically, yes. You can buy Vanguard ETFs (like VT) inside your Robinhood account. Although, Robinhood’s brand seems to focus on picking stocks and trading which i don’t like. But if you buy and hold ETFs with Robinhood the underlying investment will be the same.

  1. Is Robinhood designed to encourage more day trading versus buying and holding?

In my opinion, yes. Which is why it’s not my preference.

1 Like