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Summary Robinhood Final.docx EH 1020 Robinhood is Drawing in a New Generation of Traders to the Stock Market Columbia Southern University EH 1020 English Composition II Abstract This paper explores the positive impact Robinhood has had on the stock market$7.49
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Summary Robinhood Final.docx EH 1020 Robinhood is Drawing in a New Generation of Traders to the Stock Market Columbia Southern University EH 1020 English Composition II Abstract This paper explores the positive impact Robinhood has had on the stock market
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Robinhood F EH 1020 Robinhood is Drawing in a New Generation of Traders to the Stock Market Columbia Southern University EH 1020 English Composition II Abstract This paper explores the positive impact Robinhood has had on the stock market. Robinhood's easy-to-use platform and attractive ser...
robinhood finaldocx eh 1020 robinhood is drawing in a new generation of traders to the stock market columbia southern university eh 1020 english composition ii abstract this paper explores th
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EH 1020
Robinhood is Drawing in a New Generation of Traders to the Stock Market
Columbia Southern University EH
1020 English Composition II
Abstract
This paper explores the positive impact Robinhood has had on the stock market.
Robinhood's easy-to-use platform and attractive services have drawn Millennials to investing.
With it being so accessible and user-friendly, more inexperienced investors open themselves to
risks and financial issues. However, there is a misconception that most new investors using
Robinhood are unqualified and are making uneducated trades when in fact, the opposite is true.
Most of Robinhood's users are highly educated and highly motivated to meet their financial goals
because Robinhood empowers them. With the power of Robinhood and Millennials, the stock
market is more diverse and resilient than ever before. Therefore, negative events like the
GameStop rally in 2021 should not overshadow its positive impact on the market.
Robinhood is Drawing in a New Generation of Traders to the Stock Market
Robinhood's commission-free investing application has democratized the stocked for all
with its user-friendly layout and features, including no account minimum, subscription-based
margin service, and fractional shares. Until Robinhood, most Millennials had little interest in
trading in the stock market because it required a large sum of money, was expensive, and
required extensive research to be profitable. Now, because Robinhood is user-friendly and
provides its user with up-to-date news and financial reports, more Millennials are taking their
finances into their own hands and at their own pace (Robinhood, n.d.). Even though more
investors in the stock market typically equate to a more volatile market, some believe
, Robinhood's mission to democratize finance is doing more harm than good. The
individuals that do not side with Robinhood believe the application encourages new and
inexperienced investors to make risky and uneducated trades (Walsh, 2020), opening them up to
financial risks. This reckless trading behavior has been broadcasted throughout the nation and
discussed in the Congressional courtrooms; however, the country saw the effects of Robinhood
firsthand in the stock market during the Covid-19 pandemic. According to Kaissar, while the
number of U.S. coronavirus cases continued to soar and the economy struggled to restart, stock
market gauges such as the S&P 500 Index approached record highs technology-led Nasdaq
Composite Index eclipsed its pre-Covid peak (2020). Many people believe Robinhood
contributed to the record recovery because it allowed Millennials, a generation with different
long-term goals and risk tolerance, the opportunity to participate in the stock market. Others
believe the stock market recovery resulted from Robinhood users wasting their extra time and
money gambling on stocks they know little about (Kaissar, 2020), ultimately creating an
unstable and stock market. Robinhood has had a positive impact on the stock market because it
opened the stock market to Millennials. With more Millennials participating in the stock market,
the market is more diverse and resilient.
The Literature Review
In order to better understand the overall impact Robinhood has had on the stock market, it
is important to understand its innovative investment approach and its ability to attract a new
generation of investors. This review will cover in detail the position of both sides of the
controversy, beginning with the pro-Robinhood side, which views Robinhood as a company that
has democratized the stock market, opening it up to Millennials which in turn, make it more
diverse and resilient. It will also cover the position of those against Robinhood, or the con side,
that argues Robinhood is encouraging new and inexperienced investors to make risky trades,
opening them up for financial risks.
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