Blog : Snoop Dogg's Massive Stock Market Gamble

by Peter Leeds on October 30th, 2014

 

 

 

 

 

Soon you are going to start hearing about brokers which help you buy stocks for free.

Services like Robinhood + Loyal3 don't charge commission fees to buy and sell shares.  

Unfortunately, to save a few bucks, many people may be selling their digital soul.  For some of us, that's a fair trade-off.  Just keep in mind that not everything is as good as it sounds.  

Over 400,000 people are on the waiting list to get the Robinhood app when it comes out next year.  

Some of the interest, although not all of it, may actually be due to co-owners like Snoop Dogg and Jared Leto attracting a portion of their fan base.

Here's my opinion based on my analysis:

The good:

• no commission fees
• no account minimums

The bad:

• limited investment choices
• batch trading, so your trades will be pooled with others (like riding the bus rather than driving a car - you have to make every stop)
• complex data-mining
• corporate partners who are getting benefits too

Through complicated user tracking, the corporate partners are likely able to:

• track your activities and demographics
• send you marketing messages
• generate sales leads
• potentially spread their message through your online social networks

There is also the potential for up-selling, sharing your habits and interests with advertisers, and targeted promotions.

It's like getting a free bottle of water from Walmart, but then they:

• track every subsequent move you make
• use the demographic details you originally provide
• send you marketing messages
• tell all your social media friends every time you look at a product

I personally think no-fee stock brokers are great.  Just understand that if you want to use these free services, there is a non-monetary cost.

=== If you want to check out the free brokers, just click the links at the top of this blog.  If you are interested in the conventional discount brokers, like E-Trade and Scottrade for example, just take a look at our Official Discount Broker Ratings or our infographic review of all the brokers.

Disclaimer: What Peter Leeds says here is opinion only, based on his analysis and beliefs.