Investing General Discussion

But it should probably be made clear, Robinhood is not a bank, we are using terms like checking/saving. It remains a broker and is regulated and controlled as such. It is certainly not unique in that regard and many brokerages offer similar services.

Your risk with Robinhood in the manner being discussed is no different than having your money at any brokerage. I have a significant amount of money at a brokerage far beyond SIPC limits. I'm comfortable doing that with Vanguard. In the case of Robinhood I would probably seek to keep it under $250,000, but more out of a fear of lack of customer support than I would "financial Loss"

I will certainly be reading the fine print if/when it launches, there are rules about what a broker can do with your idle money as far as risk taking, which plays into it's ability to qualify under SIPC. The link is rather light on details. Taking issue about the intent of the money is not something that worrisome from a risk standpoint. This is such a good deal that I think they realize this will become a gigantic pool of money quickly.

If they failed to talk to SIPC I think that is troubling, may not be nefarious but calls into question their due diligence.

..edit More potential problems. I don't use debit cards because I'm not an idiot, but the bank they partnered with seems inadequate for the scale of this offering. If the fed announces next week that they are backing off on next years rate increases I think this offer will quietly disappear or be altered.

Frenzied Wombat said:

Don't really understand the allure/risk. You can get 2.8% on a Certificate of Deposit right now with a 1 year term. If you plan on actually making any real interest on the RobinHood 3%, you're still going to need to maintain a significant balance, so don't see the term on a CD being an issue.

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well 2.8 is not 3 and this was to pay daily with no minimum. So to answer you it's just more flexible. I primarily use <12mo. T-bills for short term cash, this just would have been less work, while reducing principal risk if I sell a bond prior to mat.

VMMXX is currently yielding 2.34% so has the easy in/out flexibility but giving up even more on yield. I've just been happy to finally make some return on cash, but that doesn't stop me from hoping we creep up higher than here and get back to a more long term neutral level. That just seems less likely in the last 30 days, we'll know a lot better next Wednesday.

Today's rate for anyone curious (Money market accounts tend to be around the 30-45day cost for money)

They are now calling it cash management, which they should have done from the start .

Bloomberg - Are you a robot?

I don't believe in making quick decisions on long term money, but I did make a move towards cash today on LT money. My gut tells me that this market cycle is still not over, but the technical's are looking quite bad, and I follow a discipline regardless of how it may feel in the moment. We need to recover 20 month moving avg soon to avoid this turning into something uglier than a deep correction. The outlook in late 15-2016 was also quite bad and we ended up rallying quite hard off the Feb'16 lows. Not telling people to panic, anyone who has seen me post here for years knows that's not something I would do, BUT if you have strong gains going back to the beginning of this bull market it may be prudent to start watching a little to see if you want to take some off to have cash to redeploy at better prices.

We sometimes wait years and years for those low PE opportunities, so maybe the better message given the average age person here is to get cash ready, even if you would rather leave current investments alone. (timing the market successfully has low probability of success) We may be seeing some good companies at prices that just recently seemed unreachable.

Feel pretty much the same , I could see it stopping 2400~ and a recovery to 2800-2900 sometime in 2019.

The secular bull trend can stay intact all the way down to 2150-2200 so it is likely to be some scary moments but still keep the longer trends healthy. One day at a time, we aren’t going to adjust from 7yrs of super low rates without some pain along the way.

He changed my financial life without a doubt.