Overall, for a relative newbie, Robinhood or Vanguard (or something else)?

[MadisonStreet]

Broadly-speaking and without getting too jardon-heavy (much of which I may not understand), should someone looking to dip a toe or two into the stock market go with Robinhood or Vanguard (or something else)?

[YttriumNitrate]

It depends what you are looking for.

You should use Vanguard if:
     You are looking for mutual funds and long-term trading technology suitable for retirement accounts.
You should use Robinhood if:
     You want to set up some simple trades online or by your phone for stocks, ETFs, options, and cryptocurrency.

https://tokenist.com/investing/vanguard-vs-robinhood/

[Sanitary Stache]

I

What does "dip a toe or two into the stock market" mean?
Are you looking to gamble?
Or are you interested in building and preserving wealth over decades?

I am a relative newbie not interested in gambling.  I read JL Collins stock series https://jlcollinsnh.com/stock-series/ and Burton Malkiel's "A Random Walk Down Wall Street"  I also convinced my library to buy Jack Bogle's "Common Sense on Mutual Funds" or similarly named book which I haven't read yet.

[ctuser1]

Personally, I will stay away from Robinhood. Gamification of investing scares the cr*p out of me. You WANT investing to be boring - not confetti-and-sounds exciting stuff.

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There are many other established players, including Vanguard, that are perfectly great at being a boring brokerage.

Vanguard:
Pros - more trusted, with a long history of prioritizing and looking after customer interest (e.g. no bull** low cost index funds). Pioneer of the indexing trend.
Cons - clunky user interface. Think of them as old style paper and mail brokerage that have slapped on a website as an afterthought.

Fidelity/Schwab:
Have a history of trying to pull a fast one on the customer in distant past (in terms of fees etc.). Recently, however, they have started catering to the indexing investors by offering appropriate index funds and not trying to pull too many fast ones.

I personally use Fidelity, and DW's 401k is in Schwab. Just make sure you don't sign up for the "managed" funds that they will advertise from time to time.

Much better UI than Vanguard.


There are a bunch of other brokers - Merrill/TD/JPMC youinvest. All of them have low cost options that are perfectly acceptable.

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I will repeat - if you are feeling an adrenaline rush while placing an order, or after placing it - please STOP immediately and make sure you fix that (change strategy, change brokers, adopt index investing, read JLCollins linked above - something, anything, to make investing boring again).

You WANT investing to be boring, not exciting!

[Sibley]

Based on the past week or so with what's going on with Robinhood and GME - I wouldn't touch Robinhood with a 10 ft pole.  Regardless of WHY they did it, they restricted what their customers could buy and I strongly disapprove of that.

As a newbie, make sure you have done the self-education. I like J Collin's stock series, but that's certainly not the only resource available.

[cool7hand]

We like Schwab. The fees are low. They offer their own low-fee index funds, plus those from other vendors including Vanguard. We found a local branch office advisor who is pretty sophisticated and gets our goals. He helped us kick the tires on whether to use insurance products to max out my wife's pension. As I recall, you get three wire transfers a quarter, which is nice if the need ever arrives. We also linked our credit cards and my wife's 457, which we can't transfer, so we can see our complete financial picture in one place.

[MrGreen]

Look into what Robinhood just did to GameStop before you choose them. Seems like there is some heavy questioning of just how in bed with big Wall Street they might be and their willingness to screw over the little guy if push comes to shove.

[Rosy]

Here is a pretty good comparison and intro to how Schwab - Fidelity - Vanguard compare/operate - as of Dec 2020.
https://www.youtube.com/watch?v=rAewPVEjeLM

For instance, Vanguard is investor-owned, Fidelity is a private enterprise owned by Johnson and Schwab is publically traded.
That fact alone dictates how they operate.

I found the review very helpful in deciding who to open an account with based on my own preferences, what they offer and whether that works well for me.
Lots of points raised that I hadn't even known about much less considered.

Robinhood in my mind is a great platform and fun for a little play money, but after recent events, I am revising my opinion.
Either way, I'd never consider Robinhood for true retirement investments, for one thing they have actually had blackouts in the past when their platform was down and now that I know they might deny trading access I no longer find them to be a reliable trading platform even for those fun little play money shenanigans.   

Knowledge is power ...

[simonsez]

Here is a pretty good comparison and intro to how Schwab - Fidelity - Vanguard compare/operate - as of Dec 2020.
https://www.youtube.com/watch?v=rAewPVEjeLM

Great vid, thanks for sharing @Rosy !

[jamesbond007]

After the recent events, I moved my funny money trading to Vanguard from Robinhood. I already have everything in Vanguard. So, it was an easy decision on my part when it came to moving out of Robinhood. I initiated a ACTS transfer and it took 5 days. One less app to check in the morning.