Robinhood has turn out to be a popular buying and selling platform for younger traders, and sometimes for inexperienced ones. Traders who use Robinhood are inclined to commerce extra usually than those that use extra established brokerage corporations, and plenty of interact in speculative buying and selling that carries excessive threat. In actual fact, in case you take a look at Robinhood’s checklist of 100 most popular stocks, you will discover that greater than 10% of them commerce for beneath $5 a share and are formally categorized as “penny stocks.”
However not each frequent Robinhood funding is a high-risk one. In actual fact, there are three on the checklist of the 100 hottest which can be virtually assured to be winners over time. Here is what they’re.
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These are the three most secure investments on Robinhood’s leaderboard
Of all 100 investments on Robinhood’s checklist of hottest trades, listed here are the three most secure:
The primary two on this checklist are exchange-traded funds designed to trace the efficiency of the S&P 500, whereas the third is an ETF that goals to reflect the efficiency of the broader inventory market, relatively than simply the five hundred massive U.S. corporations included within the S&P 500.
As a result of every of those three investments are exchange-traded funds, they commerce identical to shares of particular person corporations: You should purchase fractional shares of them if you cannot afford full shares and you should purchase and promote them all through the buying and selling day. However in contrast to shares of particular person shares, you are not simply shopping for into one firm and banking on it performing nicely. When you purchase any one in every of these three, you will get publicity to a whole lot of various corporations traded on the U.S. inventory market.
Shopping for an ETF that tracks the S&P or the efficiency of the market as an entire minimizes your threat as a result of each the S&P 500 and the U.S. inventory market as an entire have a really lengthy monitor report of strong features. Whereas the efficiency of every of those ETFs may be affected by market fluctuations within the quick time period, as a result of your funding {dollars} are unfold round to so many well-established corporations, you are just about assured to see a optimistic return on funding given a protracted sufficient time horizon. The moment diversification these ETFs presents makes the chance of investing minimal and the low charges that every fund expenses means investing prices will not eat away at your returns.
In fact, since these ETFs largely track the performance of the U.S. stock market, you are not going to beat the market by investing in them. And also you most likely will not earn eye-popping features over time, as you may by shopping for shares of particular person corporations that carry out exceptionally. However whereas good traders who put within the time can typically do higher than shopping for an ETF that mimics the market efficiency, it is laborious to persistently choose profitable shares over time.
The benefit of investing and restricted threat these three ETFs current have ensured they’ve earned their place on Robinhood’s leaderboard and should be among the many hottest investments. And, they’re seemingly a number of the smartest decisions lots of the platform’s customers are making. In actual fact, except you are enthusiastic about researching particular person corporations and are dedicated to doing the work necessary to invest wisely, chances are you’ll be higher off leaping on the bandwagon and selecting one in every of these ETFs to place portion of your funding {dollars} into.
