1

I'm confused at what the Y-axis of Robinhood's account graph represents. It is not labeled.

It's showing $3,000 when hovering over a date well before I ever created an account on robinhood. I would expect this number to be $0.

enter image description here

In May 2018, I signed up for Robinhood and got one free stock worth around $5. It's showing $3,005.20 on my join date. I only expect the $5 free share to be there.

enter image description here

I didn't use Robinhood for the rest of 2018. Only in January 2019 did I transfer $3,000 in funds into Robinhood. I spent about $2000 on stocks within a week. This very last Y-axis number of $3,039.97 makes some slight sense to me. I bought at a local minimum and the stock market did increase ever since, probably by that $39.97 amount.

enter image description here

In other brokerage websites such as Fidelity, the Y-axis of the account graph is easier to understand. It is usually your cash + market value of investments. So you'll see blips when you fund the account from your bank. However, Robinhood seems to be showing only market value increases minus cash deposits. It's all very unfamiliar to me, so I wanted to ask this community to verify what exactly this is.

  • 2
    You are talking about the value shown in the top left? Does that change at all as you hover on different parts of the graph? Incidentally, the (unlabeled) y-axis may be logarithmic; otherwise the plateau with fluctuations around $5 would be invisible compared to the $3000 spike. – nanoman Jan 19 at 22:59
  • @nonoman, yes I am talking about the upper left number. I have added more details to my post to illustrate how confusing the various values are. – JoJo Jan 20 at 1:43
  • 1
    This sounds like a Robinhood tech support question, so why not ask on the RH support site instead of here? – Money Ann Jan 20 at 18:17
1

The graph does not represented the balance of your account over time.

So, basically the flat line at the beginning doesn’t represent an actual dollar amount. The flat line represents the performance of your account before it was created.

I believe most brokerages (including Robin Hood) depict the performance of your account(s) with this graph. I asked e*trade this exact same question, and they answered all my questions, but they would not provide me with the precise formulas/algorithms used to create the graph.

The key difficulty all brokerages have in presenting this graph is this: How do you track performance of the investments over time when the client is making deposits or withdrawals?

The software algorithm is non-trivial, because deposits and withdrawals have no impact on the performance of your account.

In order to draw that graph, they need to start with the final account value, and then work backwards in time. Each time a deposit or withdrawal happens, they need to make an adjustment that goes something like this: “the $1000 that was deposited affects the performance graph only after it was deposited”.

Before the $1000 was deposited, the graph represents the performance of the account up to that point, so you should not see the graph suddenly “jump” by $1000 when you deposit $1000.

I downloaded my data and created a spreadsheet in order to verify the accuracy of e*trades performance graph. I was able to verify that their graph was exactly correct, based on the assumptions I outlined above.

(Let me know if you think other brokerages graphs are different.)

  • 1
    At least with Fidelity I saw a huge jump when I rolled over 401k money. So Fidelity seems to be reporting total assets. I can’t really tell what the algorithm is in my other brokerages since I have much more money there and any cash deposits get overpowered by the current assets. Robinhood reporting performance seems like a reasonable explanation. I actually like it and wish other brokerages gave this option as well. It measures how good your choices were. Just dumping in massive amounts of cash doesn’t say anything except that you were previously rich before investing. – JoJo Jan 20 at 15:27
0

That screenshot seems like it's showing your balance with the top figure.

The lower figure shows your growth of the $5 so far, thus neither seem to show you balance in May. I believe the chart is a relative representation - the lowest point being $0 and the highest being your highest balance - which is your current balance at the moment - $3005.20

0

Robinhood gave you one free share of stock worth $5 when you opened the account. That's the blip up in the graph. For the rest of the year, the graph 'squiggled' horizontally as your share varied in price. In January 2019 you added $3,000, causing the graph to shoot upward. Your account should be worth $3,005 more or less, depending on the value of your one share.

If the dollar values on the graph don't match the dates then that's just demonstrating that Robinhood is a low level stripped down low tech trading platform.

  • "low level stripped down" - I'm a computer scientist and I can tell by using Robinhood that their app that it's using modern technologies when compared to old-school brokerages such as Charles Schwab (which uses webviews). I think it's Robinhood's minimalist design and lack of labels that is hurting them. – JoJo Jan 20 at 1:47
  • Open a ThinkOrSwim account and then compare what features are available at both brokers and the depth of them. Or if you wish, Trade Station, Interactive Brokers, tastyworks, Lightspeed, etc. Then, let us know how you think Robinhood stacks up. Thx. – Bob Baerker Jan 20 at 3:46
  • @JoJo What's a computer scientist? Is that like being a superhero, but your special power is to instantly know how any program is written, even if closed source? – Money Ann Jan 20 at 18:06
  • The way the app performs indicates how it was programmed. For example, in Charles Schwab, the pages a white to begin with, and take upwards of 5 seconds to load in all at once. This indicates that they are using a webview, as a shortcut to save time on not having to program iOS an Android separately. On the other hand, on Robinhood, the static structures of the page are immediately available while the dynamic data (prices, account graphs, etc...) load in shortly after. This indicates that the static parts are on the client side already. Native code always beats webviews for performance. – JoJo Jan 21 at 6:02

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.