A share price is normally just a share price. But here’s an instance of a stock’s moves which actually represent the nature of the business itself. “Meme stock” marketplace, Robin Hood, was recently floated in the US. The company has a share price as volatile as the meme surges it has facilitated.
But on opening day, it looked as if the fintech had fallen at the first hurdle: getting its own customers on board.
Share prices in Robinhood tanked by about ten per cent within the first few minutes of trading, eventually recovering slightly to close the first day down 8.37 per cent.
It now looks as if the trading platform has rallied. At the time of writing this article, Robinhood’s share price is up by nearly 63 per cent to $63.06 per share, on opening day it closed at $34.82.
On Wednesday morning, more than 39m Robinhood shares had been traded, more than half the firm’s 30-day average volume.
Robinhood’s price volatility is an undeniable marker of ‘meme stock’ traders, who flooded the stock market earlier this year in a Reddit vs. Wall Street battle that saw everyday traders make millions.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.