I am currently 24 and looking to start purchasing share for the long term investment of retirement saving. I am a little bit nervous about the entire process and I would hope somebody could explain a few concepts me that google doesn't seem to explain at the moment.
My first confusion is simply being scared. When I use an application to buy shares, let's say for example I used RobinHood to buy several S & P 500 index shares and later on RobinHood completely closes, the application is gone and the database backups are wiped. Where can I get proof of ownership for the shares I have purchased, or if I purchase shares using the application, where can I get external validity of my purchases. As far as I understand RobinHood is essentially a middleman for my purchases, so if they go bust and disappear, I still have ownership of the shares of the business, is this correct?
My second confusion is trying to understand SIPC. If the application you're using is essentially the middleman, they take money direction from you and immediately buy the shares for you. What exactly is the risk here, why does the insurance say they can cover 500k in theft or 250k in cash, how do I lose shares if brokerage application is the middleman that immediately purchases shares for me. Once the transaction is complete, I now own the shares and everything is done, what risk is being done here and what can I lose?