Top Financial Shares Worth Investing in with a $2,000 Budget Immediately
In the first quarter of 2021, Robinhood, the online broker that has transformed into a full-service bank, saw a significant surge in its Gold subscribers. The company increased its Gold membership by 1.5 million year over year, reaching a total of 3.2 million members. This growth was accompanied by a 54% year-over-year increase in other revenue, primarily composed of Gold subscriptions, which amounted to $54 million, accounting for nearly 6% of total revenue.
Robinhood's Gold subscription service, priced at $5 per month or $50 per year, offers a range of benefits, including a 4% yield on uninvested brokerage cash, larger instant deposits, research and trading tools, margin usage, and other advantages. Gold members can also earn a 3% match on individual retirement account contributions and have access to the company's investment advisory services.
Meanwhile, Wells Fargo, one of the largest banks in the United States, has been making strides to address its past issues. Since Charles Scharf took over as CEO in 2019, he has been working on the bank's regulatory infrastructure and addressing its problems, such as the phony-accounts scandal that came to light in 2016. The scandal resulted in an asset cap on Wells Fargo, but this cap was removed in 2021, allowing the bank to expand its balance sheet beyond $1.95 trillion in assets.
Investors view Wells Fargo's stock as trading at 1.9 times its tangible book value, indicating it is not inexpensive. However, the bank is expected to generate better earnings and increase tangible book value faster than it has in the past eight years. Scharf has also focused on slashing expenses, exiting non-core businesses, and investing more in higher-returning businesses like investment banking and credit card lending.
For those seeking alternatives in the FinTech and technology sectors, there are several strong contenders. PayPal, Square (now known as Block), Mastercard, and Visa are well-established names in the FinTech sector. NVIDIA and Broadcom, while primarily known for their semiconductor products, have also made significant strides in the financial technology space.
When selecting financial stocks with a technology focus, it's essential to consider factors such as innovation, growth potential, and diversification. It's always important to evaluate current market conditions and trends before making investment decisions.
Robinhood continues to resonate with its customers and is expected to attract a significant number of new investors. Its products are wrapped in a sleek tech platform considered easier to use and navigate than those of some big players. Furthermore, Robinhood provides the flexibility to earn competitive yield on cash balances without locking them up for several months, like in a certificate of deposit.
As always, it's crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.
- Robinhood's Gold subscription service, along with its full-service bank operations, generates significant revenue from investing in its business.
- The rapid growth in Robinhood's Gold membership, accompanied by advancements in technology, makes it an attractive investment opportunity for those seeking potential growth in the FinTech sector.
- Aside from traditional banks like Wells Fargo, tech-focused financial companies such as PayPal, Square, Mastercard, Visa, NVIDIA, and Broadcom offer opportunities for investors seeking to integrate finance and technology in their portfolios.
