Diary of a Robinhood Investor: Week 1
Ramping up: My new portfolio’s performance
Last week I signed up to Robinhood, the new investing app with no trading fees. So far my portfolio is up 14%. That’s the best return I’ve ever earned in my life. I’m not throwing in the towel on my financial advisor just yet, but there’s something awfully satisfying about earning a double-digit profit in less than a week from my own stock picks.
Trading on Robinhood is super easy. It has debunked the myth that playing the stock market would be time consuming and expensive. It’s not. The smartphone app is simple and cute, and I trade in and out of companies throughout the day in the same way I text friends and check my email. The app doesn’t distract with headlines and premium products and services. I just go straight to my portfolio where I buy and sell stocks, any time, for free. I can also trade ETFs, cryptocurrencies and options.
What’s the catch? There isn’t one. Critics say the pricing of individual stocks may not be as competitive as other trading platforms, but unless you’re planning to shift bulkloads of shares on a regular basis, the difference is marginal.
Robinhood is the AirBnB of stock market investing: It’s totally revamped my perception of trading stocks and has made me feel in control of my money. All of sudden portfolio investing doesn’t feel so threatening or time consuming, and I could wind up making some money if I stay on top of my trades.
Here’s what I’m investing in:
(1) Jetblue Airlines. There’s still no light at the end of the tunnel for the air travel industry, but just like wide-legged trousers, airlines will eventually come back into fashion - even if no one knows exactly when, or how, this will happen. In the mean time I’m picking up leftover stocks in this industry, and Jet Blue in particular, which I think will benefit from some juicy government subsidies as it waits out the pandemic pause. Even if the stock only recovers to its previous price, I’ll be due a massive profit for buying in at the bottom.
Con: This is a long-dated play, with no definition of ‘long’.
(2) Logitech. Kudos to this consumer tech company that makes affordable audio and video accessories for top-notch virtual communications. Most of us rely on the built-in cameras in our phones and laptops for video streaming, but in these brave new days of Zoom meetings and virtual living, there is a growing demand for accessories - or ‘peripherals’ - that improve our streaming capabilities. Logitech’s clip-on video recorders cost a fraction of competing products in a market that used to mostly appeal to audio-video enthusiasts and music streaming lovers. The company is well positioned for a ‘new normal’ that inevitably will include virtual communications well after the pandemic has passed.
(3) S&P500 ETF. An exchange-traded fund that tracks a weighted index of the companies in the S&P500 Index. I was always taught to invest in the market over the long run rather than individual stocks. This zero-fee ETF is a great way to do just that. Hopefully I can put my money where my mouth is by picking winning stocks, but this S&P500 ETF will help keep my ego in check along the way. If things go pear-shaped with any of my individual picks, I’ll be loading up even more in this ETF, and others like it, instead.
These are exciting times as I take on the role as my own personal investment advisor. Stay tuned!