I think you hatin on the company is unwarranted. Millions of people already trade stock. Given that they do, they are better off paying less for it than more. Investors who trade infrequently and trade something like SPY also benefit because they get lower fees and, hopefully, they don't need brick and mortar support. "Whales will always take their money elsewhere" - why ? Why do "whales" want to pay more for their trades. I am not saying Robinhood is the second coming of Jesus, but I don't see any good reason for hatin' on the company, the way you do
First, I am not "hatin" on Robinhood. I don't believe the company's value proposition is very compelling, particularly for its target market, and I explained in detail why.
Second, you are making some flawed assumptions about what's best for investors. In terms of transaction costs, to save a meaningful amount, you need to be making a meaningful number of trades. As I noted, other brokerages, like Fidelity, offer access to commission-free products that are appropriate for average investors, so in some cases Robinhood offers no savings.
Beyond transaction costs, the average investor does not benefit from engaging in frequent trading and stock picking. Saying you saved $200/year on transaction costs doesn't mean much when your portfolio performance lags the market. The average investor will do better with reasonable diversification and a sensible buy-and-hold strategy than he or she will trading in and out of individual issues because there's no commission.
Regarding whales, at Interactive Brokers, for instance, you can pay as little as 0.5% over the benchmark rate on margin balances and a fixed rate commission of $0.005 per share per trade. Do the math. Robinhood will never realistically be able to compete on cost for that segment of the market.
As I wrote, I think Robinhood's entry into a market that is substantially smaller than the US at this early juncture is a telling indication of its prospects in the US.
I don't think the entry into Australia is a negative, the way you describe it. Australian fees are much higher than in the US, so it's a great value proposition there. So why not offer the service there as well ?
I agree that people shouldn't trade a lot. This is besides the point. People shouldn't eat a lot of burgers, either. Given that people do trade a lot, though, it adds a lot of value to reduce the cost of that trading. Some people trade a lot for fun, knowing that they shouldn't, if they wanted to maximize return.
As far as Fidelity or Vanguard or others offering commission-free products, how is it bad to have MORE of such products out there ? It's just competition. The devil of the value add is in the exact terms and details.
