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Right now its earnings season, which means that lots of news is being generated about companies releasing reports.  Every quarter companies report their financials, and they have time after each quarter ends to compile the data to present to the public.   January, April, July, and October are the months following the ending quarters, and also the months that make up earnings season.  Some of the notable firms who released earnings reports this week include: Microsoft, Texas Instruments, 3M, Apple, Boeing, Alibaba, Google, Xerox, and Chevron.   

When companies release their financial reports some of them also choose to provide guidance about their future performance for other quarters.  For example, a company issuing a Q1 earnings report may provide guidance for the second quarter.  That guidance could then state that earnings will be $0.17 a share and that revenues will be $280 million for the quarter.  Analyst will conduct research and consider the guidance issued in determining their opinion about what the earnings should be.  All the analyst opinions about how a particular company will perform get grouped together to form the consensus estimate.

The degree to which a stock price will be affected depends on how actual earnings differ from the consensus estimate.  Two things to look out for in relation to earnings are surprises and revisions.  A surprise can be positive or negative, and occurs when the earnings a company reports are different than the consensus estimate.  Positive surprises occur when earnings are better than projections, and negative surprises occur when earnings are below projections.  Revisions are either up or down, and show a shift in the analyst opinion about the future performance of a company.  In the short term both positive and negative surprises along with revisions, can account for some stock price fluctuations.

 
 
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There is a current battle taking place over the commissions investors pay.  It used to be the case where trades could cost several hundred dollars to be executed.  With the entrance of Discount and Online brokers commissions began to go  down.  Now an investor can place a  stock trade nearly everywhere, for under $10.  The battle still continues as brokers  offer incentives to attract investment flows, and offer tiers to costs based on investment amounts/activity. 

As I look out at the firms in the market I see new names emerging.  Each day as I scroll down my Twitter timeline I notice a new company promoting its trading app or brokerage services.  So I decided to check some of these firms out.  Today I will discuss two companies’I recently came across: Robinhood and Betterment.  Below is also a commission comparison chart for stock purchases at various brokers.

Robinhood
The concept behind Robinhood is to increase access to investing by taking advantage of technology and lower overhead costs. Part of what the company stated allows them to do so is cutting out storefront locations and manual account management.  The app, investment products, and related services are intended to be used by self-directed U.S. investors.  The stated mission of Robinhood is to empower this new generation to take greater ownership in their financial future, which we believe can help shrink the gap between the "haves" and the "have nots" and lead to a healthier, more robust global economy. 

With no minimum balance to open a cash account, investors can take advantage of zero-dollar commissions for self directed individual cash or margin brokerage accounts that trade U.S. listed securities through a mobile device.  As of now investors get access to over 5,000 securities which are both publicly-traded companies and exchange-traded funds listed on U.S. exchanges, with future plans to offer additional financial products.  Because the service is intended to be used by self-directed investors, Robinhood does not make recommendations or offer investment advice.  
 
Betterment
With Betterment there is no minimum investment or balance.  The company charges based on a tier for investment amount; under $10,000 is 0.35%, $10,000+ is 0.25%, and $100,000+ is 0.15.  Money that is invested through
Betterment is placed into an Exchange Traded Fund or ETF, which covers one of 12 different asset classes, based on a selected asset allocation.  

The company stated criteria for selecting each ETF is to consider the following: expense ratio, bid-ask spread, assets under management, number of holdings, exchange rate hedging, and capital gains implications.  Per company website, “The Betterment portfolio is designed to achieve optimal returns at every level of risk.  Through diversification, automated rebalancing, better behavior, and lower fees, Betterment customers can expect 4.30% higher returns than a typical DIY investor.”  

Considering Where to Invest
The  reason that Robinhood and Betterment were selected is because they represent  options for different investors, one self-directed, and one needing more  assistance. When selecting a place  to invest you must consider what type of investor you are.  Every company may not have the kind of account you require or offer the kind of investments you prefer.  It is great that costs for investing have gone down, thereby increasing the likelihood that more can afford to invest.  The commissions that investors pay can eat away at the overall return that an investment achieves.  The risk of lower commissions is that it becomes easier for inexperienced individuals to trade more.  With continued advances in technology, and lowered costs more options will continue to become available to help individuals get invested.
Never take for granted doing your own research or understanding the important risks that investing offers.

 *Prices for competitors were checked on January 6, 2015 and are believed to be accurate, but not guaranteed. Some of the firms listed above may reduce or waive commissions or fees, depending on account activity or total account value.  Although prices were checked, the image is an older version so service rankings may differ.
*Writing about Robinhood and Betterment is not an endorsement of either service.