Investing in the stock market can be an exciting venture, especially with the rise of commission-free trading platforms like Robinhood.
However, one question that many people ask is, "How much does the average person make on Robinhood?"
Unfortunately, the answer may not be what you want to hear. Let's take a closer look.
To determine the success rate of stock pickers on Robinhood, we need to look at the performance of mutual funds and index funds.
Mutual funds are managed by expert stock pickers, while index funds are passively managed.
According to numerous studies, most mutual funds fail to beat the market, and the ones that do aren't usually the same each year. It's essentially a game of chance.
If the professional stock pickers can't consistently beat the market, your odds as a Robinhood investor are even worse.
Furthermore, many Robinhood investors take on risky bets, which means the average Robinhood investor is likely losing more money than the typical stock market investor or mutual fund manager.
Warren Buffett, one of the most successful investors of all time, is a strong proponent of index funds.
In his 2013 letter to Berkshire Hathaway shareholders, he recommended that most of the cash that goes to his family be put in a low-cost S&P 500 index fund. This is a clear indication that even the most successful investors believe in the power of passive investing.
That being said, Robinhood does offer fractional shares of stocks and exchange-traded funds (ETFs) with as little as $1.
There is no minimum deposit required to open an account, which means that new users can open an account and start investing with just a dollar. However, it's important to remember that investing in the stock market always comes with risks, and it's essential to do your research and invest wisely.
In conclusion, the average person's success rate on Robinhood is difficult to determine.
With the majority of mutual funds failing to beat the market, and the added risks of taking on risky bets, the odds may not be in your favor. The best course of action for most investors is to follow the advice of successful investors like Warren Buffett and invest in low-cost index funds.
Always do your research and make informed investment decisions to maximize your chances of success.
This article was generated using automation technology, and thoroughly edited and fact-checked by an editor on our editorial staff.