i have a vanguard account with most of my investments, with like 10% in robinhood for gambling.
the way i think about it is vanguard works fine (theres some bugs but not end of the world). but it is not optimized for timed trades. it works well enough for me to put in a big chunk of money on a recurring basis or liquidate funds for use elsewhere.
robinhood allows me to easily trade off of market emotion or do options trading.
they serve two very different markets. if i tried to trade options using vanguard i'd probably want to throw my phone against the wall.
Maybe—just maybe—we shouldn’t be encouraging the general public to trade options? Triply so with margin accounts?
This is isn’t “democratizing finance”. It’s literally just a wealth transfer from the poor to the rich. It’s putting fish at a poker table full of professional sharks backed by billions of dollars and teams of analysts, and encouraging the fish to put their life’s savings on table.
Index funds are boring as fuck, but have done more to put market returns in the hands of the average member of the public than anything in the history of finance.
I’m not saying people who want to shouldn’t be allowed to trade options. But putting the ability in the hands of anyone who has zero financial experience but can download an app isn’t helping things.
i partially agree with you. robinhood is ran by rich guys who make money when people use the app - regardless if the traders make money or not. and i agree that index funds are a great way to get exposure to the long term growth of the economy.
however, giving people the ability to trade on margin and options just like the big shops is an equalizer. robinhood wasn't lying there. the problem really is:
1) education
there's a significant inequality in knowledge. the average person isn't taught market fundamentals, theory, or the technical details of how stuff works (how does a call work? what does T+2 mean?)
2) capitalism
the market is tipped in the favor of the big guys, because currently the financial market is incentivized to keep these guys not just afloat but jacked up. big gains = everyone is happier. as such, very smart people, like physicists, are attracted to the financial sector where they are paid the big bucks to make insanely rich people even wealthier, instead of working in academia or an industry where they can contribute their abilities to bettering the entire world. i.e. working on green energy or reducing environmental impact or improving productivity
the way i think about it is vanguard works fine (theres some bugs but not end of the world). but it is not optimized for timed trades. it works well enough for me to put in a big chunk of money on a recurring basis or liquidate funds for use elsewhere.
robinhood allows me to easily trade off of market emotion or do options trading.
they serve two very different markets. if i tried to trade options using vanguard i'd probably want to throw my phone against the wall.