Is Robinhood a Millennial Obsession?

Many of us have seen the craze that has come from the financial services app called Robinhood. Launched in 2013, it's an app geared towards the millennial generation looking to start investing. It seems to draw on those same obsessive compulsions that social media apps Facebook FB , Twitter TWTR and Instagram do, so instead of checking the latest tweet, some might be reaching for their phone to check the price movement of a stock.

Though the app has become popular amongst millennials, with its easy navigation and accessibility, those who are interested in buying and selling stocks and are beginners find this app to be their go-to. However, the easiness of the app and that it doesn't provide sufficient information could be harmful when understanding when is the right time to buy or sell a stock.

According to FastCompany , Robinhood has done a great job building a trusted relationship with its millennial demographic. The app gives its users the ability to experiment and explore without being penalized or losing money.

Popularity Amongst Millennials

The app provides day trading for the mobile-era, and has become a trend for many. So this brings us to the question: how did this app attract its target market after just five years since its launch?

With the age that we're in right now, mobile users want to look at screens with fewer headlines and fewer numbers. Hence, Robinhood's design of a clutter-free screen and minimal information. The average age of Robinhood users is 28-41, and most of them use the app to make their first stock purchase.

According to the founders of Robinhood, Vlad Tenev and Baiju Bhatt, they realized that most of the app's users are using spending money to invest. This money would usually be used on coffee or other discretionary items; however, that money is now being used towards Robinhood investing. That being said, most of the people using the app tend to be college students or older that only have a couple hundred dollars to invest, so it makes sense that they are using the money that they have in their bank account at that moment to put into the app.

The Good and Bad of Robinhood

Although the app is known for its ease and simplicity, which millennials are very fond of, the downside is that it doesn't provide enough information. And seeing as the app is geared towards those who are just learning how to invest , it could be difficult for them to understand.

Robinhood is an app that is good for beginners, especially those who like a sleek and minimalistic app. However, it stands on the wrong end for those who are looking into a long-term investment, as they don't get enough information about companies or stocks on Robinhood.

Bottom Line

It's hard to understand how long this craze of using your coffee money to invest into a stock app will last. It seems as though Millennials enjoy dabbling into the app and buying a couple different stocks and seeing where that leads them in a few months. Although, it can be said that Robinhood isn't an app for the long term, but it certainly falls under new millennial obsession.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Facebook, Inc. (FB): Free Stock Analysis Report

Twitter, Inc. (TWTR): Free Stock Analysis Report

To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.