Robinhood Launches Personalized, Risk-Aligned Investment Portfolios: What You Need To Know

Robinhood Markets Inc HOOD, which says it is redefining retail market access and breaking down traditional barriers to financial wellness, will provide personalized portfolios to first-time traders.

What Happened: Robinhood is kicking off the New Year with First Trade Recommendations, a personalized, diversified portfolio of funds at users’ fingertips.

This comes as the platform adds new users with little to no prior investment experience.

With First Trade Recommendations, customers can get a personalized recommendation of a small, diversified ETF investment portfolio that seeks to maximize returns, based on their needs, risk profile, and investing needs.

Getting Started: After opening an account, users can navigate to ‘Get help with your first investment’ on the Investing tab and complete a risk assessment.

They will then receive recommendations on a small, diversified portfolio of four exchange-traded funds (ETFs) with portfolios that include investment strategies across a variety of domestic and international sectors and economies, as well as fixed income.

Bonus: Robinhood will include insights on recommendations.

According to a release on the matter, users “can review information around the number of companies, average annual returns, and the expense ratio associated with each ETF.” Investments can be made with as little as $20.

Robinhood is also offering a quick introduction to essential investing terminology, allowing for an easy understanding of the key components found on the stock details page.

Why It Matters: At the outset, Robinhood started out as a bare-bones stock brokerage allowing its users to buy and sell stocks, options, and ETFs. The firm’s differentiator was cost and technology.

Although financial sustainability is a major concern, society has been trained to borrow and spend, rather than save and invest. To help new investors navigate their financial future, Robinhood has expanded into the development of an education and news library, along with guidance on trading and cash management.

As a result, today’s Robinhood customers have access to all the tools they need to learn and stay informed, as well as trade fractional shares of stocks, options, ETFs, cryptocurrencies, and IPOs.

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