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Investing basics—in plain English.

Updated Jan 15, 2021Robinhood Learn

Picking an investment: How to approach analyzing a stock

Investing is like shopping for a car, but more consequential. You start with your personal needs, style, and objectives. Consider different makes and models, and compare choices based on key metrics. Then, make a decision that works for you.

Updated Jan 15, 2021Robinhood Learn

How to start investing for as little as 1 dollar

Investing in the stock market doesn’t mean you need to have thousands, or even hundreds of dollars to get started. Even if you have just one extra dollar, fractional shares (which are offered on Robinhood) can help you build your portfolio.

Updated Jan 15, 2021Robinhood Learn

What’s the purpose of a diversified portfolio?

A diversified portfolio is kind of like a nutritious diet... The better you spread your investments across different assets, the less likely they are to all experience a loss. Or in other words, your aggregate losses will likely be less severe.

I’m in my 20s — How should I approach investing?

Updated Jul 14, 2020Robinhood Learn

I’m in my 20s — How should I approach investing?

At Robinhood, we’ve got a BOMB acronym to help you think about your financial life. So, here are four tips on how to Budget, Organize, Maximize, and Balance your finances to help tee up your investing journey.

Updated Jan 30, 2021Robinhood Learn

The stock market has been super volatile – How can I make sense of it?

Volatility is like turbulence during a flight. You don’t know when it’ll strike or how severe it'll be. Many investors use standard deviation as a proxy for volatility, estimating the degree to which a stock fluctuates from its average price.

Updated Jan 07, 2021Robinhood Learn

Three charts that help explain this year’s stock market volatility

The stock market’s reaction to COVID-19 has been, well, vicious. Here, we reflect on how the 2020 decline compares to other historic drops, what investors are paying for bonds, and how the Fed’s interest rate policy compares to recent history.

Updated Jan 07, 2021Robinhood Learn

Does a market “selloff” mean long-term investors should sell?

Long-term investing is like seeking cover during an earthquake. Basic preparedness, like staying away from windows and heavy furniture, can help you stay strong during a difficult time. Likewise, long-term investing usually requires calm and caution.

Updated Jan 07, 2021Robinhood Learn

Interest rates are at their lowest since 2008 — What does that mean?

Adjusting the fed funds rate is like training as a weight lifter. The Fed raises interest rates (adds weight) to make loans more expensive, helping to manage inflation. To boost the economy, it lowers rates (removes weight) to make borrowing cheaper.

Updated Mar 01, 2021Robinhood Learn

What is the Stock Market?

The world’s stock markets are complex, but are all based upon one simple concept… Connecting stock buyers with stock sellers to trade under an agreed upon set of rules. This is the key role of every stock market, from New York to Hong Kong.

What is an Investment?

Updated Mar 01, 2021Robinhood Learn

What is an Investment?

An investment is an asset bought by an individual or organization with the expectation that it will generate some future income or profit.

Updated Mar 01, 2021Robinhood Learn

What is the Federal Unemployment Tax Act (FUTA)?

When you put money into your emergency fund, you’re saving money for a financial emergency. The federal unemployment tax works kind of the same way, except employers contribute to one big emergency fund that workers can use if they lose their job.

Updated Mar 01, 2021Robinhood Learn

What is an Exempt Employee?

An exempt employee is like a monthly music subscription. You pay the exempt employee more money (a monthly salary), but you don’t pay extra the more work you give them.

Updated Mar 01, 2021Robinhood Learn

What is Deferred Compensation

When you participate in a deferred compensation plan, you can have money taken out of your paycheck and put into an account for the future. Then, when a rainy day comes along, you can begin to withdraw the money.

What is dogecoin?

Published Feb 24, 2021Robinhood Learn

What is dogecoin?

Created in 2013, dogecoin is an open-source, peer-to-peer digital currency, which features a Shiba Inu dog (aka “Doge”) as its mascot. Dogecoin was created to help make cryptocurrency more fun and accessible to the broader online community.

Updated Feb 23, 2021Robinhood Learn

What are Employee Stock Options (ESOs)?

Employee stock options are like a coupon. Both set a predetermined price and have an expiration date. Like a coupon, you don’t have to use your stock options. If the stock prices are higher than the price set in your ESO, it might produce a profit.

What is a Stock Option?

Updated Feb 23, 2021Robinhood Learn

What is a Stock Option?

Stock options are like growing fruit. You hope the seeds turn into something that can be picked at harvest. If the fruit is inedible, you lose the cost of the seeds. If the fruit is ripe, you have the option to pull the fruit off the tree.

Updated Feb 23, 2021Robinhood Learn

What is an Exchange-Traded Fund (ETF)?

An ETF is like an investment smoothie… Similar to a smoothie, it’s one thing you can invest in that’s made up of a mix of ingredients, available in different asset flavors (i.e., industries, sectors, etc.).

Updated Feb 23, 2021Robinhood Learn

What is a Fractional Share?

A fractional share is like a slice of a gem… If a share in a company is like a gem, a fractional share is like a slice of that jewel. Not everybody wants (or can afford) an entire gem, but these jewels can be broken into smaller pieces.

What is a Dividend?

Updated Feb 23, 2021Robinhood Learn

What is a Dividend?

A dividend is like a ripe coconut falling from a tree... When a coconut falls from a tree, it’s as if the tree is a company, distributing some of its fruit back to you. As an investor, you have a choice of keeping the coconut or planting it.

What is Common Stock?

Updated Feb 23, 2021Robinhood Learn

What is Common Stock?

Common stock is like general admission at a concert, while preferred shares are the VIP passes… Both types of stocks are slices of ownership in a company, and typically come with voting rights, or even perks like income paid back to shareholders.

What is a Security?

Updated Feb 23, 2021Robinhood Learn

What is a Security?

Picture securities as different vegetables you can plant in your garden... They’re available in many varieties, such as stocks, bonds, ETFs, and mutual funds, but there’s a risk they don’t grow.

What is a Stock Split

Updated Feb 23, 2021Robinhood Learn

What is a Stock Split

Yogi Berra nailed it... "Cut my pizza into 4 slices — I’m not hungry enough to eat 8." But it doesn’t matter how you cut it, the pizza is still the same size!

What is an Initial Public Offering (IPO)?

Updated Feb 23, 2021Robinhood Learn

What is an Initial Public Offering (IPO)?

With great excitement comes great responsibility… When a company IPOs, its stock becomes listed on the public investing menu for the first time. These stocks can be tempting to purchase because there’s often hype surrounding the event.

Updated Feb 22, 2021Robinhood Learn

What is Insider Trading?

Insider trading is like seeing the test a day before taking it. While all the other students must study all of the material, you have inside information about what you need to know and which areas to focus on.

What is a Stock?

Updated Feb 22, 2021Robinhood Learn

What is a Stock?

A stock is a unit of ownership in a company — If you own a stock, that makes you a shareholder, meaning that you may be eligible to receive dividends if the company succeeds and you may have a vote in some company decisions.

Updated Feb 22, 2021Robinhood Learn

What is the Money Market?

The money market is like a weekend getaway. It’s easy and quick because it’s not a long-term commitment. You can usually pull your investments out at any time without too many repercussions or transaction fees.

Updated Feb 22, 2021Robinhood Learn

What is Appreciation?

Appreciation is like a tree you planted and forgot about. The environment represents the market conditions (like inflation or increased demand) that happened to work in its favor. Over time, the tree increased in value without you doing anything.

Updated Feb 22, 2021Robinhood Learn

What is an Asset?

Assets are like magic beans. Jack traded his cow for a bag of magic beans. His mother got upset, but Jack believed that the magic beans would lead to something valuable. Likewise, companies hold on to assets believing that those resources have worth.

Updated Feb 22, 2021Robinhood Learn

What is the American Dream?

The American Dream is like planting a tree in fertile, well-watered land. Ideally, the tree (any American) should be able to reach its maximum potential without hindrance from oppressive conditions.

Updated Feb 22, 2021Robinhood Learn

What is Medicaid?

Medicaid is there for low-income people who can’t afford to purchase insurance coverage another way. We all pay into the program through our tax dollars, and qualifying participants have access to affordable medical care when they need it.

What is a Roth IRA?

Updated Feb 22, 2021Robinhood Learn

What is a Roth IRA?

A Roth IRA is like a Redwood tree. You pay for sapling and the supplies to grow it. You put in a bit of effort over time to make sure that the tree is maturing. And when you’re ready to retire, you won’t have to pay more money to enjoy its shade.

Updated Feb 22, 2021Robinhood Learn

What is a Beneficiary?

The beneficiary of something like a trust or insurance policy will receive benefits from the people who established those policies or trusts and named them as beneficiary.

Updated Feb 22, 2021Robinhood Learn

What is Retirement Planning?

Retirement planning is like planting a tree. Like growing a tree from a sapling, retirement planning can’t be done overnight. It takes a long time of careful planning and effort to grow a strong retirement that you can enjoy.

Updated Feb 22, 2021Robinhood Learn

What is a Pension?

A pension plan is like your employer planting a garden for you. While you work, your employer plants seeds. They hope the seeds will grow enough food for your retirement. If the garden doesn’t provide enough, they’ll buy you food.

What is a Holding Company?

Updated Feb 19, 2021Robinhood Learn

What is a Holding Company?

When you put on a backpack, you can hold many different things. One pocket might have some books. Another pocket holds the clothing you’ll need for your trip. In the same way, a holding company can hold many different businesses.

Updated Feb 09, 2021Robinhood Learn

What is Customer Service?

Customer service is like a waiter at a restaurant. Waiters take orders, serve food, and stand ready to assist. Their primary job is to help the customers and ensure that they have a positive experience — increasing the chances that they will return.

Updated Feb 09, 2021Robinhood Learn

What is Probate?

Probate is like a referee reviewing a play during a football game. Like the process of a referee reviewing a play, probate is meant to keep things fair and legal, and make sure everyone gets what they’re due.

Updated Feb 08, 2021Robinhood Learn

What is Laissez-Faire?

Laissez-faire is like riding a bike without no hands. The government keeps pedaling the bike by making sure all the conditions to sustain a free market are in place. It doesn't interfere with the market unless individual rights are in jeopardy.

What is a Fiscal Year?

Updated Feb 08, 2021Robinhood Learn

What is a Fiscal Year?

You learned when you were a kid that the year starts in January and ends in December. But did you know that there are other kinds of years? Fiscal year is one of them - a period that defines their "year" that doesn't coincide with the calendar.

Updated Jan 29, 2021Robinhood Learn

What is Human Capital?

Human capital is like a trained chef in a kitchen. You can give anyone access to a fully stocked kitchen, but you need a chef with training, knowledge, and experience to turn that food and those tools into an exceptional culinary experience.

Updated Jan 29, 2021Robinhood Learn

What is Macroeconomics?

Similar to the way a national weather report looks at how conditions could result in above or below average temperatures throughout the country, macroeconomics looks at how market forces are shifting at a large scale.

Updated Jan 29, 2021Robinhood Learn

What are Checks and Balances?

Like with speed limits, the checks and balances in government protect everyone from one branch of government moving too fast and putting our government and country at risk.

Updated Jan 29, 2021Robinhood Learn

What is Self-Employment?

Being self-employed is like adulting. You get to choose when you work and when you play, but you’re also responsible for making sure the bills (aka taxes) get paid.

What is Demand?

Updated Jan 29, 2021Robinhood Learn

What is Demand?

Demand is an expression of a customer’s willingness and ability to purchase a good or service. When that willingness goes up, so does demand, and vice versa.

Updated Jan 29, 2021Robinhood Learn

What is Diminishing Marginal Utility?

The law of diminishing marginal utility is like playing the same board game. The first time you play, you have fun. The more you play it, however, the more familiar you become with the rules and strategies. Each time the game becomes less exciting.

Updated Jan 29, 2021Robinhood Learn

What is Brexit?

The process of Britain and the EU untangling their political and economic affairs is much more complicated than combining them was. Disagreements over who pays for what and how they will interact in the future may drag on for years — even decades.

Updated Jan 29, 2021Robinhood Learn

What are Factors of Production?

Factors of production are like everything that goes into baking a cake. Someone used innovation and imagination to come up with the recipe, and you put in the effort to bring the other factors of production together (entrepreneurship).

Updated Jan 29, 2021Robinhood Learn

What is Expropriation?

Expropriation is like buying something that isn’t for sale. The owner doesn't want to sell, but the government has deemed the sale more important. That’s how expropriation works, they’re forcing the sale of land for vital public use.