by Staff Reports Money Morning, Money Morning
Traders, from the most casual to the most serious, are piling into investing apps.
Robinhood and Stash have been two of the biggest winners over the last year. The Robinhood app alone added 3 million new users in the first quarter of 2020. But which is better? We’ll show you which comes out ahead in the Stash vs. Robinhood matchup.
They’re quick, easy, and most of all, they give traders access to profit.
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The surge in app trading wasn’t without its speedbumps, however.
Many are well aware of the scandal where Robinhood had to halt trading when it couldn’t handle volumes of GameStop Corp. (NYSE: GME) and a few other stocks changing hands. Naturally, traders felt cheated out of their money and lashed out on social media.
A report in February said 56% of account holders planned to leave the app.
But the simple, fee-less trading brokerage model still presents an enticing outlet for many traders. There are a few alternative ways to get the power of the New York Stock Exchange in your pocket, though not many.
One of the prime contenders is Stash, a personal finance app that serves a similar purpose, though it does things a little bit differently.
We’re going to talk about the difference between Stash and Robinhood, and which one could be the better option for you to start buying stocks. They’re both all-star apps with their own pros and cons.
It’s less intimidating than you might think – these apps can have you buying stocks within minutes of creating an account.
Whichever you choose may just depend on what kind of investor you are.
The Difference Between Stash and Robinhood
Off the bat, the first thing you will notice in a Stash vs. Robinhood comparison is that Stash charges a monthly fee. But there’s a good reason for that.
This app is designed to dive deeper into your personal financial life, helping you budget and grow your knowledge of investing while offering similar trading services to Robinhood.
Stash is not simply a robo-advisor that picks stocks for you based on a preset risk level. You make most of the decisions, with Stash as your guide. And you pay for the level of guidance you want.
Stash’s fees start at $1 a month – that’s the first tier called Stash Beginner. Users get investing and budgeting advice to start.
The second tier, Stash Growth, adds Roth and traditional IRA options to the package for $3 a month.
Finally, there’s the $9 per month Stash+ package that accesses even more content and enables you to open investments accounts for your kids.
Robinhood is the simpler, classic stock trading service. It doesn’t share any of the same budgeting or personal finance features of Stash, but that can be a good thing, depending on what kind of trader you are.
It’s the pioneer of the commission-free trading wave sweeping other investing apps like WeBull and Charles Schwab. The company charges no commission, inactivity, or transfer fees. It only takes a small fraction of the difference between the buy and sell price of every stock.
A cool thing about Robinhood is that you can invest in cryptocurrency like Bitcoin and Ethereum as well as stocks – though you have no way of transferring your crypto from the exchange to outside wallet. Stash also offers cryptocurrency, but not Bitcoin, trading.
Lastly, Robinhood also offers a higher tier of trading for those who want to trade on the margin, called Robinhood Gold. It’s a $5 monthly fee.
That’s the most basic difference between Stash and Robinhood. Let’s dive a little deeper into the features of each…
How Stash Features Compare to Robinhood
Another key difference between Stash and Robinhood is Stash’s emphasis on “socially responsible investing,” which it calls “SRI.” Yes – you can now choose from a variety of portfolios designed to promote specific values like climate or diversity.
Both Stash and Robinhood allow you to trade fractional shares of stocks.
Robinhood users can invest in stocks and ETFs without a fee. But buyers of Robinhood’s Gold product also get access to exclusive, in-depth analysis from Morningstar.
Because Stash offers the tiered approach, it is probably the better option for investors looking for more hands-on assistance with their money.
If you’re more interested in the trading aspect, Robinhood is the best bet.
You can customize alerts, set “buy” triggers, and make regular stock purchases. You also have a wealth of charts and articles to glean from.
If you get comfortable learning the markets through Robinhood, you can get approved for options trading in a matter of minutes.
From there, you can also start reading our options trading specialists, Tom Gentile, Chris Johnson, and Andrew Keene for the latest trades.
Now, here’s our final answer on which mobile investing app could be right for you.
The Stash vs. Robinhood Verdict
At the end of the day, these are two solid trading apps for which there is only a small pool of competitors.
Choosing one over the other will depend on what kind of investor you are.
As you might expect, the type of investor using Stash is more likely new to investing or prefers a hands-off approach.
Of course, there are plenty of first-time traders on Robinhood. But the Stash model is much better suited to a balanced, holistic investing approach.
For example, you won’t find as many day traders on Stash as you might on Robinhood.
If you know little about money, Stash offers all the tools for you to set a foundation for managing it.
That said, the combination of freedom and access Robinhood provides users is hard to beat. You just want to make sure you’re well-informed before diving in (we know this isn’t hard when you have us at Money Morning).
The bottom line is that, if you use Robinhood, your decisions are entirely your own – though they’re easy to execute. Stash can otherwise hold your hand through the process.
Both can help you make money in their own ways.
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