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Robinhood Automatic Investing Plan and Robo Investing


2020: Does Robinhood offer automatic investment plan (AIP) and dollar cost averaging program (DCA). Robinhood robo investing setup. Monthly/weekly auto investing in ETFs, stocks, and mutual funds.



Does Robinhood Offer Automatic Investment Plan?


Robinhood does not offer automatic investment plan at this time. This is a significant failure and its customers are missing out on a great service. As an alternative, you can use automatic investment plan from another $0-commission broker Firstrade instead.


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Robinhood Dollar-Cost Averaging


Automatic dollar cost averaging is not available on Robinhood brokerage account. Investors will have to do it themselves.


Robinhood Robo Investing


Robinhood does not offer robo investing program at this time. Great robo investing service is available with $0 Fee at Ally Cash-Enhanced Managed Portfolio.


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About Robinhood


Robinhood is a stock brokerage, a phone-based trading app, that allows customers to buy and sell U.S. listed stocks and ETFs with zero commission. Robinhood is a registered broker-dealer, member FINRA and SIPC.


Some Limitations


Unlike other traditional brokerages, Robinhood offers mostly smartphone-based trade services. Arguably, this isn't a feature that makes a significant difference for the millennials that they target. Additionally, they don't provide the full range of investments products available at other firms. Robinhood crypto-currencies trading also has some significant limitations. Users do not get their own wallets, and for now, the Robinhood coin offerings are still very limited. 

Customer service is limited to market hours. This can be troublesome for users who encounter issues during pre-market and after market hours, or crypto traders who trade twenty-four hours a day.

Robinhood has frequent scheduled maintenance periods. Though they are scheduled when markets are closed, it affects those invested in the cryptocurrency space, as coins are traded 24/7. 


Robinhood Automatic Investing


Robinhood Gold Account


Robinhood offers clients a Gold account. This is a unique margin account, which differs from the margin accounts of other brokerage firms.

Instead of charging a percent of the dollar amount borrowed, Robinhood charges a flat $10 every month. This gives the account the ability to borrow a maximum of $2,000. The ability to borrow $4,000 costs $20 every month, and so on for the first $50,000. Above $50,000 they charge 5% interest. So essentially, traders at Robinhood who want access to the extended-hours periods must pay at least $10 per month.

A Gold account also comes with instant reinvesting. This service allows traders to use the proceeds from a stock sale to immediately purchase other securities. The Gold service also offers instant deposits, where ACH transfers can be used right away, instead of after the normal three business-day wait. These are nice features that other Robinhood traders don’t have.

Limit orders placed in a Gold account are automatically valid for the regular period and the extended-hours periods. Stop orders are not valid during extended hours.


Recommendation


Robinhood is a great starter app for those who are new to the world of stock investing. With no account minimum and free trades, it delivers its promise of making investing available to everyone. Further, Robinhood integrates many design features to help control risk for new traders, barring entry for options trading by filtering out inexperienced traders and offering PDT protection to protect against violating FINRA regulations. These features all make Robinhood an excellent option for new traders.

While great for beginners, the commission-free philosophy is also attractive for traders of all levels, as those who trade frequently understand that commission fees add up quickly. Still, for seasoned traders who need more advanced charting tools and precise stock prices, it may be wise to use Robinhood in conjunction with a brokerage that has more powerful charting tools, like TD Ameritrade, or opt for a different brokerage altogether.

In spite of its shortcomings, Robinhood shows considerable potential. The company seems to be aware of its shortcomings and works to add more useful features for its users with each update. It is likely they will continue to address user complaints add more advanced features and offerings as their platform continues to mature.