Investing on Robinhood: Analyzing Top 10 Stock Picks, Types of Investments & Strategies

Introduction

Robinhood is an online investment platform that allows users to buy and sell stocks, options, cryptocurrencies, and mutual funds with no commission fees or account minimums. It is one of the most popular investment platforms today, as it provides easy access to the stock market for both beginners and experienced investors.

In this article, we will explore who to invest in on Robinhood. We will analyze the top 10 Robinhood stock picks of 2020, understand the different types of investments available on Robinhood, examine the pros and cons of investing on Robinhood, and research the best strategies for successful investing.

Overview of Robinhood

Robinhood was founded in 2013 by two Stanford graduates with a mission to make financial services more accessible to everyone. The platform enables anyone with a smartphone to open an account, add funds, and start trading stocks, options, cryptocurrencies, and mutual funds with no commission fees or account minimums.

The user interface is designed to be intuitive and easy to use, making it ideal for those new to investing. In addition, Robinhood offers a range of educational resources such as tutorials, webinars, and articles to help users learn about different investment strategies.

The platform also features a social media-like “News Feed” where users can share their trades and opinions on different stocks. This makes it easier for users to collaborate and gain insights from other investors.

Benefits of Investing in Robinhood

Investing on Robinhood has several advantages, including:

• No commission fees or account minimums
• Easy-to-use user interface
• Educational resources available
• Social media-like “News Feed” to collaborate with other investors

Analyzing the Top 10 Robinhood Stock Picks of 2020

At the start of each year, Robinhood releases its top 10 stock picks for the coming year. These picks are based on analysis of the company’s data and insights from its team of experts. Let’s take a look at the top 10 Robinhood stock picks of 2020 and review the companies behind them.

Reviewing the Companies Behind the Picks

The top 10 Robinhood stock picks of 2020 are: Amazon, Apple, Microsoft, Tesla, Facebook, Alphabet (Google), Nvidia, Visa, Mastercard, and AMD. All of these companies are well-known tech giants that have been dominating the stock market for years.

Amazon is an e-commerce giant that has seen tremendous growth over the past decade. Apple is the world’s largest technology company, known for its innovative products such as the iPhone and iPad. Microsoft is a leading software and services provider, while Tesla is a leading innovator in the electric vehicle space.

Facebook is a leading social media platform, while Alphabet (Google) is the world’s largest search engine. Nvidia is a leader in artificial intelligence and graphics processing, while Visa and Mastercard are two of the world’s largest credit card companies. Finally, AMD is a leading semiconductor manufacturer.

Assessing the Performance of the Picks

Overall, the performance of the top 10 Robinhood stock picks of 2020 has been strong. Amazon and Apple have seen the greatest gains, rising nearly 50% and 20%, respectively, since the start of the year. Microsoft, Tesla, Facebook, Alphabet (Google), and Nvidia have all seen double-digit gains, while Visa and Mastercard have seen modest single-digit gains.

AMD has seen the weakest performance of the group, declining slightly since the start of the year. However, the company is expected to benefit from increased demand for its processors and graphics cards as the gaming industry continues to grow.

Understanding Different Types of Robinhood Investments

In addition to stocks, Robinhood also offers users the ability to trade options, cryptocurrencies, and mutual funds. Here’s a brief overview of each type of investment.

Stocks

Stocks are shares of ownership in a company. When you buy stocks, you are essentially buying a piece of the company and becoming a shareholder. You can then earn money from dividends (if the company pays them) or when you sell the stock for a profit.

Options

Options are contracts that give the buyer the right, but not the obligation, to buy or sell a stock at a predetermined price. They are often used as a way to hedge against potential losses or to speculate on the direction of a stock’s price.

Cryptocurrencies

Cryptocurrencies are digital currencies that use cryptography to secure transactions. They are decentralized, meaning they are not issued or backed by any government or central bank. Popular cryptocurrencies include Bitcoin, Ethereum, and Litecoin.

Mutual Funds

Mutual funds are professionally managed portfolios of stocks and bonds. They are a great option for those who don’t want to pick individual stocks, as they offer instant diversification and can be bought and sold quickly.

Examining the Pros and Cons of Investing on Robinhood

As with any investment platform, there are both pros and cons to investing on Robinhood. Let’s take a look at some of the key advantages and disadvantages.

Pros

• No commission fees or account minimums
• Intuitive user interface
• Wide range of investments available
• Educational resources available
• Social media-like “News Feed” to collaborate with other investors

Cons

• Limited customer service and support
• No retirement accounts
• No margin or short selling
• No international stocks
• No advanced order types

Researching the Best Robinhood Investment Strategies

When investing on Robinhood, it’s important to have a well-thought-out strategy. Here are four key strategies to consider.

Diversification

Diversification is the practice of spreading your investments across different asset classes, sectors, and industries to reduce risk. By diversifying your portfolio, you can reduce the impact of a single stock’s performance on your overall returns.

Dollar-Cost Averaging

Dollar-cost averaging is a strategy of investing a fixed amount of money in a particular asset at regular intervals. This helps to reduce volatility and can help you take advantage of market fluctuations.

Tax Bracket Planning

Tax bracket planning involves understanding which investments are taxed at what rate so that you can minimize your tax liability. This can help you maximize your returns and keep more of your money.

Risk Management

Risk management is essential when investing on Robinhood. It involves understanding your risk tolerance and developing a plan to protect your investments from sudden market swings. This can help you avoid losses and maximize your returns.

Conclusion

Investing on Robinhood can be a great way to get started with investing. By analyzing the top 10 stock picks of 2020, understanding the different types of investments available, examining the pros and cons of investing on Robinhood, and researching the best strategies for successful investing, you can make informed decisions and achieve your investment goals.

Summary of Key Points

• Robinhood is an online investment platform that allows users to buy and sell stocks, options, cryptocurrencies, and mutual funds with no commission fees or account minimums.
• The top 10 Robinhood stock picks of 2020 have performed well, with Amazon and Apple seeing the greatest gains.
• In addition to stocks, Robinhood also offers users the ability to trade options, cryptocurrencies, and mutual funds.
• Pros of investing on Robinhood include no commission fees or account minimums, easy-to-use user interface, and educational resources.
• Cons of investing on Robinhood include limited customer service and support, no retirement accounts, and no margin or short selling.
• Successful investing on Robinhood requires a well-thought-out strategy, such as diversification, dollar-cost averaging, tax bracket planning, and risk management.

Final Thoughts

Investing on Robinhood can be a great way to get started with investing. By understanding the different types of investments available, examining the pros and cons, and researching the best strategies, you can make informed decisions and increase your chances of achieving your investment goals.