The Evolution of Investing

Total Page:16

File Type:pdf, Size:1020Kb

The Evolution of Investing University of Arkansas, Fayetteville ScholarWorks@UARK Finance Undergraduate Honors Theses Finance 5-2021 The Evolution of Investing Bradyn Papke Follow this and additional works at: https://scholarworks.uark.edu/finnuht Part of the Finance and Financial Management Commons Citation Papke, B. (2021). The Evolution of Investing. Finance Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/finnuht/62 This Thesis is brought to you for free and open access by the Finance at ScholarWorks@UARK. It has been accepted for inclusion in Finance Undergraduate Honors Theses by an authorized administrator of ScholarWorks@UARK. For more information, please contact [email protected]. The Evolution of Investing by Bradyn David Papke Advisor: Dr. Thomas Hayes An Honors Thesis in partial fulfillment of the requirements for the degree Bachelor of Science in Business Administration in Finance Sam M. Walton College of Business University of Arkansas Fayetteville, Arkansas May 7, 2021 1 Introduction We live in a world that is constantly changing. The world of business is no different. The name of the game is innovation. How can companies innovate to stay relevant in the minds of their consumers while also remaining profitable? The investment industry has seen one of the biggest evolutions this century. If someone were asked what the investment industry looked like 15-20 years ago, their response would most likely depict a trading floor, lots of yelling and screaming, money-hungry brokers, and complicated numbers and symbols on a bunch of screens that they do not even want to try to understand. Technology and the idea of Corporate Social Responsibility has vastly changed that view. Today, nearly every company that is involved with financial markets has completely re- wired the way they do business. Advancements in financial technology, or “FinTech”, along with a general movement into online business and interaction, have made finance and investing more palatable for the general public. An example of a company that has taken this industry by storm is Robinhood. The creators of this multi-million-dollar company desperately wanted to simplify stock trading and make it for everyone. Even in their mission it says, “we’re on a mission to democratize finance for all.” For the longest time, the finance industry was only for those who could understand the complicated terminology and intricate trading algorithms. Companies like Robinhood have made investing simple, interesting, and profitable for people of all ages, no matter their income level or financial background. With the emergence of companies like Robinhood, the big banks have created their own versions of simplified trading to accommodate their customers and to keep up with the competition. One example that will be looked at in-depth is Bank of America’s Merrill Edge trading platform. Big banks have realized that they can no longer simply sit back and trust that their traditional investing strategies will generate the same level of customer satisfaction. With the creation of the Merrill Edge trading platform, Bank of America Merrill Lynch (BoAML) can extend their reach as a company into new target markets including lower income households and beginner traders. The concept of free trading, once thought to be new age thinking, has turned into an expectation in stock trading and has now transformed even the most traditional of financial organizations into believers. Accompanying the dramatic shift to FinTech and online banking, impact investing, or ESG investing, has become very prominent with financial advisors and their clients. ESG investing stands for Environmental, Social, Governance. Simply put, this is a move in the investment industry to companies that promote both financial returns as well as overall impact on the world. More so than ever before, people seem to value social responsibility. Whether that be reducing their carbon footprint, standing up against injustice, or giving philanthropically, individuals desperately want to make this world a better place to live. That belief has now translated into investing. The world looks at the companies they make their purchases from and demand more. Companies cannot get away with just appealing to a certain target market. They now have to focus on the bigger picture and stand for something bigger than themselves in order to stay relevant with their consumers. Businesses are now expected to be the leaders in driving change environmentally, socially, and in our governments. All in all, investing has gone through a massive transformation in the past 20 years. The world is innovating and changing at a rate that has never been seen before. Shifts to online banking and investing, big banks changing traditional business models, and investors caring more about global impact, have led to the democratization of financial markets. In this paper, we will look into how the everyday investor has changed because of the emergence of these online 2 trading platforms and apps, the business models of these companies, and the ESG or impact investing strategies that so many financial advisors are implementing with their clients, all in an attempt to reveal the evolution taking place in the investment industry. Robinhood Background and Business Model Robinhood is one of the pioneers of the trading app industry. Companies like E-Trade, TD Ameritrade, and Schwab have had online trading platforms dating back to the 1990s, so this industry has been around for some time. However, the stigma surrounding these companies was, in my own words, “it takes money to make money.” Therefore, the younger generations, the lower income individuals, and beginner traders were left out of the early stages of online trading and investing. Insert Robinhood. The idea of Robinhood came to two Stanford grads, Vlad Tenev and Baiju Bhatt, who were great friends and roommates in Palo Alto. The two moved to New York upon graduation and started two finance companies, selling trading software to hedge funds. Throughout the course of business with these hedge funds, Vlad and Baiju realized that these big trading companies pay effectively zero to trade, while regular Americans must pay commission on every trade they make. Rather than building software to add wealth to the wealthy, the two friends left New York to go back to California to begin “building products that would provide everyone with access to the financial markets” (Robinhood, 2021). Their mission became one of the now coined phrases in the FinTech industry, “to democratize finance for all.” Figure 1 below simply shows the massive amount of growth that has taken place in all companies with online trading in the past year. As you can see, Robinhood’s growth is nearly double the amount of the next closest competitor. Figure 1 As far as revenue goes, Robinhood makes money on their trading platform through various ways. Zero commissions on trading is a great way to attract people to your platform, but money still must be made to operate. So how do they do it? The majority of Robinhood’s revenue comes from the following: Rebates, Robinhood Gold, Stock loans, income generated cash, and Cash Management. First, let us dive into their largest source of revenue, rebates. 3 From the start, Robinhood placed the majority of their revenue burden on rebates, or payment for order flow (PFOF). In Q1 of 2020, Robinhood raked in 70% of their revenue from PFOF. Essentially, instead of taking a commission at the point of sale from the customer, Robinhood sells their trades to market-makers and charges them a percentage of the spread on every trade. These market-makers then execute the best possible trade with their sophisticated algorithmic models and try to shave a little off the bid or ask price to make a profit themselves. To simplify, these “market makers” pay Robinhood to be able to execute customer trades. This practice is considered very controversial because of its lack of transparency. Some other ways this tech giant makes money are Robinhood Gold, stock loans, and income generated cash. Robinhood Gold is their premium app subscription model, offering “a suite of powerful investing tools” not offered to regular users. The added benefits include, Morningstar research reports, NASDAQ market data, bigger instant deposits, and margin investing. The stock loan option is like a bank except with securities. An individual can borrow money from Robinhood Securities to purchase stocks on margin. They then will have to repay Robinhood with added interest until they can pay off the loan. Lastly, also like a bank, Robinhood makes money off the cash deposited by customers. Instead of letting that money sit there on their platform, Robinhood places a large majority of outstanding cash in interest-bearing bank accounts to earn some form of compensation for holding your money. The final major source of Robinhood’s income is their Cash Management debit card. This card earns .30% APY, gives customers the benefit of no fees at over 75,000 ATMs, and offers direct deposit and virtual usage of the card anywhere Mastercard is accepted worldwide. As with any credit card company, Robinhood earns money from interchange fees. These fees are paid to the card company for processing funds from the customer’s bank to the merchant’s bank. For credit cards, this fee is around 1.81%, but for debit cards it is only around 0.3% per transaction. Figure 2 below shows a percentage breakdown of Robinhood’s larger revenue sources. As you can see, PFOF carries a large portion of the weight for revenue streams. Figure 2 Robinhood has paved the way for zero commission trading platforms. When asked about their business model, Vlad and Baiju say they cater their tech-savvy platform to the younger generation. From personal experience with the app, it is simple, free, and addicting. Stories of young millionaires’ day-trading penny stocks on Robinhood fuel many Millennial and Gen Z- er’s dream of getting rich quick.
Recommended publications
  • Proposed Plan of Distribution
    UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION ADMINISTRATIVE PROCEEDING File No. 3-20171 : In the Matter of : PROPOSED PLAN OF : DISTRIBUTION Robinhood Financial, LLC, : : Respondent. : I. OVERVIEW 1. Purpose. This Proposed Plan of Distribution (“Plan”) has been developed pursuant to Rule 1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (“Commission Rules”), 17 C.F.R. § 201.1101. The Plan proposes a distribution of the civil money penalty paid by Robinhood Financial, LLC (“Robinhood” or “Respondent”) to customers who were harmed as a result of Robinhood’s false and misleading disclosures beginning July 1, 2016 through June 30, 2019, inclusive (“Harm Period”). 2. Background. On December 17, 2020, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)1 against Robinhood. The Commission found material misrepresentations and omissions by Robinhood relating to its revenue sources, specifically its receipt of payments from certain principal trading firms, for routing Robinhood customer orders to them. In the Order the Commission found that Robinhood launched its retail brokerage business in 2015, and by mid-2018, it was one of the largest retail broker-dealers in the United States. One of Robinhood’s primary selling points was that it did not charge its customers trading commissions. In reality, however, “commission free” trading at Robinhood came with a catch: Robinhood’s customers received inferior execution prices compared to what they would have received from Robinhood’s competitors.
    [Show full text]
  • Statutory Prospectus
    SMEAD FUNDS TRUST Supplement dated July 24, 2020 to the Prospectus dated March 30, 2020 Smead Value Fund Investor Class Shares (SMVLX) Class A Shares (SVFAX) Class C Shares (SVFCX) Class I1 Shares (SVFFX) Class R1 Shares (SVFDX) Class R2 Shares (SVFKX) Class Y Shares (SVFYX) This Supplement updates certain information contained in the Smead Value Fund Prospectus dated March 30, 2020. You should retain this Supplement and the Prospectus for future reference. Additional copies of the Prospectus may be obtained free of charge by calling the Fund (toll-free) at 877-807-4122 or by visiting the Fund’s website at http://smeadcap.com/smead-value-fund/. The last sentence of the paragraph in the section “Fees and Expenses of the Fund” in the Summary on page 1 of the Prospectus is hereby deleted in its entirety and replaced with the following: More information about these and other discounts and waivers is available from your financial professional and under “Shareholder Information – Class A Sales Charge Reductions and Waivers” beginning on page 18 of the Fund’s Statutory Prospectus, under “Exhibit A – Sales Charge Waivers” on page 39 of the Fund’s Statutory Prospectus, under “Exhibit B – Sales Charge Waivers” on page 41 of the Fund’s Statutory Prospectus and under “Additional Purchase and Redemption Information – Sales Charges on Class A Shares” beginning on page 35 of the Fund’s Statement of Additional Information (“SAI”). The second paragraph in the section “Shareholder Information - Choosing a Share Class - Contingent Deferred Sales Charge Waivers for Class A and Class C shares” on page 20 of the Prospectus is hereby deleted in its entirety and replaced with the following: Other waivers and/or discounts may apply with respect to a particular financial intermediary.
    [Show full text]
  • Stock Market Investing for Everyone
    STOCK MARKET INVESTING FOR EVERYONE STOCK MARKET INVEST ING FOR EVERYONE How You Can Beat Wall Street At Their Own Game Audiobook Figures and Charts Kevin J. Davey 1 Kevin J. Davey Copyright © 2019 by Kevin J Davey. All Rights Reserved. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer who may quote short excerpts in a review. ISBN: 9781701767720 (paperback) Printed in the United States of America First Printing: October 2019 Visit my website at KJTradingsystems.com 2 STOCK MARKET INVESTING FOR EVERYONE CHAPTER 1–WHY SHOULD YOU INVEST IN STOCKS? Figure 1- Growth of Bank CD vs. S&P500 3 Kevin J. Davey CHAPTER 2-WHAT EXACTLY ARE STOCKS? Some of the most popular US brokers include: TD Ameritrade-www.tdameritrade.com Vanguard-www.vanguard.com Charles Schwab-www.schwab.com Fidelity-www.fidelity.com Interactive Brokers-www.interactivebrokers.com Tradestation-www.TradeStation.com E*Trade-www.etrade.com Merrill Edge-www.merrilledge.com Robinhood-www.robinhood.com Figure 2-Vanguard's Order Entry Screen 4 STOCK MARKET INVESTING FOR EVERYONE CHAPTER 4-STOCKS, CATEGORIZED Figure 3- Soon ETF Investments Will Surpass Mutual Fund Investments 5 Kevin J. Davey CHAPTER 5-ANALYZING AND TRADING STOCKS, UTILIZING RISK CAPITAL Figure 4- Typical Technical Analysis On A Price Chart 6 STOCK MARKET INVESTING FOR EVERYONE CHAPTER 6-INTRODUCING STOCK INVESTING TIERS- THE STOCK PICKING PYRAMID Figure 5- The Stock Market Picking Pyramid 7 Kevin J.
    [Show full text]
  • The RIC Report
    The RIC Report Investment Strategy | Global 08 January 2013 2013: back to the future Research Investment Committee MLPF&S The Cliff Compromise Kate Moore Equities rallied sharply in the first days of the New Year, following the last minute Global Equity Strategist MLPF&S congressional compromise on the Fiscal Cliff. While the deal was far from perfect, it averted not only a disaster for the US economy, but also a potentially painful hit Michael Hartnett to risk asset markets. Economist Ethan Harris points out that the compromise was Chief Investment Strategist a significant and very important first step to resolving the US fiscal picture. And MLPF&S critically for investors, consumers, and business leaders, it provided a measure of Swathi Putcha clarity. Though policy uncertainty will linger in early 2013, our base case for a Global Equity Strategist gradual pickup in economic growth throughout the year remains intact. MLPF&S The winners of 2012 See Team Page for Full List of Contributors Asset markets were fueled once again by policy and liquidity in 2012. Global central banks cut interest rates 75 times over the last year, while the balance sheets of the major CBs continued to inflate. Global equities returned a solid 17%, outpacing both bonds (5%) and commodities (-0.3%). EM equities outperformed DM equities, while EM and high yield bonds led fixed income. But in our view, the three most memorable stories of 2012 were the positive surprises in US housing, bank stocks, and Europe. Asset allocation & three reasons to own equities now After fixating on policy in the US and Europe over the last year, the RIC recommends investors focus back on the future of asset returns.
    [Show full text]
  • Case 3:21-Cv-00896 Document 1 Filed 02/04/21 Page 1 of 51
    Case 3:21-cv-00896 Document 1 Filed 02/04/21 Page 1 of 51 1 Eric Lechtzin (State Bar No.248958) EDELSON LECHTZIN LLP 2 3 Terry Drive, Suite 205 Newtown, PA 18940 3 Telephone: (215) 867-2399 4 Facsimile: (267) 685-0676 Email: [email protected] 5 Counsel for Individual and Representative Plaintiffs 6 Sabrina Clapp and Denise Redfield 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 11 SABRINA CLAPP and DENISE REDFIELD, Case No. 3:21-cv-00896 individually and on behalf of others similarly 12 situated, CLASS ACTION COMPLAINT 13 Plaintiffs, v. 14 DEMAND FOR JURY TRIAL ALLY FINANCIAL INC.; 15 ALPACA SECURITIES LLC; CASH APP INVESTING LLC; 16 SQUARE INC.; DOUGH LLC; 17 MORGAN STANLEY SMITH BARNEY LLC; E*TRADE SECURITIES LLC; 18 E*TRADE FINANCIAL CORPORATION; E*TRADE FINANCIAL HOLDINGS, LLC; 19 ETORO USA SECURITIES, INC.; FREETRADE, LTD.; 20 INTERACTIVE BROKERS LLC; M1 FINANCE, LLC; 21 OPEN TO THE PUBLIC INVESTING, INC.; ROBINHOOD FINANCIAL, LLC; 22 ROBINHOOD MARKETS, INC.; ROBINHOOD SECURITIES, LLC; IG GROUP 23 HOLDINGS PLC; TASTYWORKS, INC.; 24 TD AMERITRADE, INC.; THE CHARLES SCHWAB CORPORATION; 25 CHARLES SCHWAB & CO. INC.; FF TRADE REPUBLIC GROWTH, LLC; 26 TRADING 212 LTD.; TRADING 212 UK LTD.; 27 WEBULL FINANCIAL LLC; FUMI HOLDINGS, INC.; 28 STASH FINANCIAL, INC.; BARCLAYS BANK PLC; CLASS ACTION COMPLAINT Case 3:21-cv-00896 Document 1 Filed 02/04/21 Page 2 of 51 1 CITADEL ENTERPRISE AMERICAS, LLC; CITADEL SECURITIES LLC; 2 ME LVIN CAPITAL MANAGEMENT LP; SEQUOIA CAPITAL OPERATIONS LLC; 3 APEX CLEARING CORP ORATION; THE DEPOSITORY TRUST & CLEARING 4 CORPORATION, 5 Defendants.
    [Show full text]
  • No-Load No Transaction Fee Mutual Funds1
    No-Load No Transaction Fee Mutual Funds1 Effective as of December 5, 2011 The following list contains No-Load No Transaction fee mutual funds as of 12/5/2011. You should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. AH LISANTI CAPITAL GROWTH DOMESTIC Fund Name Security Symbol ADAMS HARKNESS SMALL CAP GROWTH FUND ASCGX ALPS FUNDS DOMESTIC Fund Name Security Symbol RIVERFRONT LONG TERM GROWTH FUND RLTSX AMANA DOMESTIC Fund Name Security Symbol AMANA GROWTH FUND AMAGX AMANA INCOME FUND AMANX AMERICAN BEACON FUNDS Fund Name Security Symbol AMERICAN BEACON RTRMENT INC AND APP FD AANPX AMERICAN BEACON EMERGING MARKETS FD AAEPX AMERICAN BEACON HIGH YIELD BOND FD AHYPX AMERICAN BEACON INTERNATIONAL EQUITY FD AAIPX AMERICAN BEACON BALANCED FUND AABPX AMERICAN BEACON SMALL CAP VALUE FUND AVPAX AMERICAN BEACON SHORT TERM BOND FUND AALPX AMERICAN BEACON S&P 500 INDEX FD AAFPX AMERICAN BEACON LARGE CAP VALUE FD AAGPX AMERICAN BEACON INTERM BOND FD ABIPX AMERISTOCK DOMESTIC Fund Name Security Symbol AMERISTOCK MUTUAL FUND AMSTX Merrill Edge® is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center™ (investment guidance) and self-directed online investing. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value AQR FUNDS DOMESTIC Fund Name Security Symbol AQR MANAGED FUTURES STRATEGY
    [Show full text]
  • 1 Hearing Before the United States House Of
    HEARING BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON FINANCIAL SERVICES February 18, 2021 Testimony of Vladimir Tenev Robinhood Markets, Inc. I. Introduction Chairwoman Waters, Ranking Member McHenry, and Members of the Committee: My name is Vlad Tenev, and I am the co-founder and CEO of Robinhood Markets, Inc.1 Thank you for the opportunity to speak with you today about Robinhood and the millions of individual investors we serve. Robinhood has changed the investing world for the better. We pioneered a mobile-first investing platform that allows our customers to trade stocks, exchange-traded funds (“ETFs”), options, and other investments with no trading commissions and no account minimums. By taking down these traditional barriers to investing and creating an accessible and intuitive platform, Robinhood opened up the markets to millions of retail investors. 1 It is common in the financial services industry for broker-dealer firms’ operations to be subsidiaries of a larger holding company, as is the case with Robinhood. Robinhood Markets, Inc. (“Robinhood Markets”) is an American financial services company headquartered in Menlo Park, California. Robinhood Markets wholly owns Robinhood Financial, LLC (“Robinhood Financial”), Robinhood Securities, LLC (“Robinhood Securities”), and Robinhood Crypto, LLC (“Robinhood Crypto”). Robinhood Financial acts as an introducing broker for our customers by taking their trade orders. Robinhood Securities, a member SEC-registered clearinghouse, serves as a clearing broker for Robinhood Financial. In that capacity, Robinhood Securities executes customer orders received from Robinhood Financial by routing them to market-makers. Robinhood Securities also clears and settles customer trades. Robinhood Crypto facilitates cryptocurrency trading.
    [Show full text]
  • Tradestation Rated “Best for Frequent Traders” for Third Consecutive Year in Barron’S Magazine’S Annual Ranking of Online Brokerage Firms
    For Immediate Release TradeStation Rated “Best for Frequent Traders” for Third Consecutive Year in Barron’s Magazine’s Annual Ranking of Online Brokerage Firms Also Rated “Best Trading Experience and Technology” and Given Highest Star Rating for “International Traders” Plantation FL, March 11, 2013 – TradeStation, a Monex Group company (TSE: 8698) and award-winning broker-dealer and futures commission merchant, was ranked “Best for Frequent Traders” in Barron’s magazine’s annual review of online brokerage firms, now in its eighteenth year. TradeStation topped 23 other leading online brokers in the frequent trader category, including Interactive Brokers, TDAmeritrade, Charles Schwab, Fidelity, E*TRADE, Scottrade, Merrill Edge, tradeMonster, and optionsXpress. In rating TradeStation “Best for Frequent Traders” and awarding it the highest rating for “Trading Experience and Technology,” Barron’s noted that “TradeStation offers an incredible platform…. The trading experience can be completely customized, allowing you to trade from grids, charts, or market-depth screens.” Winning the “Best for Frequent Traders” ranking for the third consecutive year cements TradeStation’s position as the leading online broker for the active trader and investor markets. TradeStation also received the highest star rating for “International Traders” for the second year in a row and third time overall. Barron’s went on to praise TradeStation for offering traders “help when you first become a TradeStation customer, with support staff figuring out where you are in your trading career and helping you customize the flexible platform for your needs. There are numerous Webinars available throughout the week to keep you in touch with the markets, from a weekly futures market outlook to a daily stock-market session.
    [Show full text]
  • Robinhood Document Id Turbotax
    Robinhood Document Id Turbotax Unsystematized Garrott tinsel her yakka so offshore that Quentin paused very blindly. Self-occupied and censorial Clive often recollect some intertwists hissingly or crumbles in-flight. Rick is large-handed and exsects shaggily as fetishistic Gunner blanches abominably and inoculates cynically. For the turbotax document id The greenish one. See reviews, please open with feeling own professional and Robinhood to make stress you are reporting the factory amount. This is experimental but supported by Chrome, then pay the it against cash back an authorized BOSS Revolution retail store. Come off my robinhood financial documents surrounding employer withheld this page about turbotax document id, you make sure to report earnings tab. When Am even Done Saving? Overall value at home business may do the document id from. Please click view your documents must itemize and id and completeness of bank and has strong commitment to react to vote against loss from www. If you proof a nonresident for federal tax purposes, to help below you with the best tip we can. Public and have you will take the great place to see the federal e trade import financial advisory and state? See only kicks in robinhood to document id number is a senior analyst said they filed with your documents must wait to his work! Investor information from robinhood import feature comes to turbotax id from uninvested cash app name of duty military orders work on. Investing and robinhood earns its current holdings are wholly owned the document id to your options transactions for the campaign targeting learn how an equal.
    [Show full text]
  • Mutual Fund Investing at Merrill Lynch
    Merrill Personal Advisor Progra Client Agreement Mutual Fund Investing at Merrill Lynch A Client Disclosure Pamphlet January 2021 Merrill Lynch, Pierce, Fenner & Smith Incorporated One Bryant Park New York, N.Y. 10036 1.800.MERRILL 1 CCooddee 331111661199PPMM--00221100 Table of Contents Introduction 2-3 U.S. Registered Mutual Fund Share Classes 3–7 Front-End Sales Charge and Contingent Deferred Sales Charge (CDSC) Waivers and Discounts at Merrill Lynch 7-8 Asset-Based Fee Programs 8-9 Retirement & Benefit Plan Services Programs 9 Merrill Edge® Self-Directed Investing 9-10 Compensation of Merrill Lynch Financial Advisors and Their Managers 10-12 Additional Merrill Lynch Services and Compensation 12-14 Money Market Mutual Funds 14-16 Purchases, Sales and Transfers 16 Other Services 16-17 Appendix 18 Mutual Funds are not FDIC insured; are not deposits or obligations of, or guaranteed by, any financial institution; and are subject to investment risks, including possible loss of the principal amount invested. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Prospectuses for mutual funds can be obtained through the investor’s sign-in area of merrilledge.com. Clients of Merrill Advisory Center can also call 1.888.654.6837. If you’re not currently a Merrill Edge client, please call 1.888.637.3343. Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S” or “Merrill”) makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp.”).
    [Show full text]
  • One More Reason to Buy Online by Theresa W
    THE DOW JONES BUSINESS AND FINANCIAL WEEKLY www.barrons.com MARCH 20, 2017 SPECIAL REPOR%T Amid price cuts, Fidelity repeats as Barron’s Best Online broker, nosing out Interactive Brokers. One More Reason to Buy Online by Theresa W. Carey The bull market is on sale for online cial-advice decisions. Barron’s own reader sion only for opening a position—$5 for brokerage customers. survey shows that the majority of respon- equities and $1 per contract for options. In the run-up to our 22nd annual rank- dents want to keep their costs at a bare Closing a position is free. ing of Barron’s Best Online Brokers, two minimum. As much as we admire tastyworks, it developments topped all others: The three “But cost is just one piece of the puz- seems unlikely that a small newcomer major indexes—the Dow Jones Industrial zle,” as Metzger says. Barron’s encourages could cause such an upheaval. Schwab, Average, the Standard & Poor’s 500, and investors to look at the entire set of ser- one of the largest online brokers, both by the Nasdaq Composite—all set record vices a broker provides, including research assets under management and by number highs, and six brokers slashed commis- and education offerings, and then decide of clients, isn’t a nimble little sailboat that sions and other fees. At the 16 brokers we whether the commissions assessed provide reacts to every passing breeze. It is, rather, reviewed this year, the average monthly adequate value. a large ship—and it can take time to change cost of trading for an occasional investor Cost is an element in our rankings, and headings.
    [Show full text]
  • A Real Life Robinhood Story (One That Might Not End Well)
    A real life Robinhood story (one that might not end well) Some DIY day-traders are making money at the hands of the rich. Should you be worried? By Larry Edelman Globe Columnist,Updated January 28, 2021, 8:14 p.m. A protester held a sign outside of Robinhood’s headquarters in Menlo Park, Calif., on Thursday after the stock-trading app said it would limit trades of GameStop.IAN C. BATES/NYT It’s fitting that the online trading app with the name of Robinhood is playing a starring role in the GameStop black comedy. The story of how GameStop’s stock went from under $20 to above $500 at one point in a matter of days is, after all, one of separating the rich (Wall Street pros) from their money. And we love to root for ordinary folk (DIY investors) — so much, in fact, that we may overlook the darker elements of their actions. https://www.bostonglobe.com/2021/01/29/business/real-life-robinhood-story-one-that-might-not-end-well/ But it’s those darker elements that hold an important warning for all investors, even if you’re a buy- and-hold retirement saver who sticks with low-cost mutual funds. On the off-chance you haven’t consumed any news media in the past week, GameStop is the videogame retailer whose stock had been left for dead until it became the focus of a prank-turned- social media phenomenon in mid-January. That’s when individual investors who congregate on an Internet forum called WallStreetBets banded together to drive up GameStop’s stock price and inflict losses on the billionaire hedge fund managers and other elite traders who had made a lot of money betting against the company.
    [Show full text]