I received an invite last week to open an account at Robinhood - the new brokerage that has been receiving press for no commission buys and sells of stock. I wanted to give it a try, so we transferred money in and bought one share of Caterpillar Tractor stock.

I chose Caterpillar for a couple of reasons. It has a high dividend yield and has been trading near the bottom end of it's one year trading range. It has for a long time been on our lists of "Possible" to set up a DRIP/DSPP plan, but we've always passed on it because it has a particularly fee laden direct purchase plan with set-up fees and purchase fees and we prefer to choose no fee DRiP/DSP plans.

Our plan right now is to buy one share a month of Caterpillar for the foreseeable future, although we have no commitment to do so such as with an enrollment in some DRiP/DSP plans. We could also buy more than one share on any trading day, again with with no trading commissions.

My general impression of Robinhood this far

Advantage:

1. Relatively painless to set-up account, transfer in cash and buy stock. It even allowed me to set a limit on the Buy price which is something our Loyal3 brokerage account lacks.

2. Unlike Loyal3, which only offers an extremely limited number of stocks which can be purchased, nearly any US company that sells stock can be purchased via Robinhood.

3. Real time trading. A few other of the low cost brokers such as Loyal3 and the regular monthly purchase option at Sharebuilder employ batch trading, which means that you might need to wait a full trading day or more to sell your stocks, if you wanted to sell for whatever reason.

Disadvantage:

1. I can only trade on iOS devices. In their FAQ section they mention that an Android and Web Based method of trading is on their to do lists.
This is actually a big deal for me as I personally use an Android phone and tablet. I can only access this account via my husband's iPAD mini, which is often in my husband's briefcase and not readily available for me.

2. Ongoing concern. Many might remember the saga of another no fee brokerage from a couple of years ago - Zecco. They simply were not able to maintain the no fee business model and all their accounts eventually ended up at TradeKing when the two companies merged. Currently this is not a huge concern of mine as I'm only dealing with a small number of shares of one stock and I will not have a significant account balance for quite awhile.

This factor, however, is why I have no interest in transferring my other brokerage holdings TO Robinhood in spite of the fact that I could buy and sell those holdings commission free. If they are still around several years from now and things have gone well with them, I might consider a transfer. Until then I will have to deal with another brokerage, another set of tax forms and added complication of having money in several different accounts.

3. Robinhood does not offer automatic dividend reinvestment, although the website states it is also in their list of possible future benefits. Automatic Dividend Reinvestment is a strategy we often employ with our DRiP/DSP plans and with some other stocks we own such as Lockheed Martin.

4. Similarly they do not offer the purchase of fractional shares, although few Brokerage Accounts do. With our Loyal3 account in particular we often take the $10 to $15 we might have saved elsewhere (such as on the grocery bill) and use that to purchase a small fractional share of a stock such as Berkshire or Apple. The advantage of being able to dribble in $10 at a time is the HUGE strength of the Loyal3 brokerage.

5. No Joint account registration. This account is only registered in my name and not jointly owned by my husband because Individual Ownership is the only option available at the moment. Again, with such a small account balance it is not a significant factor, although I prefer accounts to be jointly owned with clear Beneficiary Designations in order to circumvent Estate issues should I kick the bucket next week. These are advantages to holding investments at the larger, more established institutions such as Fidelity. This is another reason I would not consider depositing large holdings with Robinhood for the moment.

Beyond Robinhood, we also made purchases at Loyal3 today. We added $10 to each of the following stock holdings at our Loyal3 account, for a total of $80: Apple, Google, Hasbro, Intel, Coca-Cola, McDonalds, Microsoft, Unilever.

A few of our DRiP/DSP are scheduled for automatic buys soon. Exxon, Pinnacle West and Realty Income.

March is an active Dividend month for many companies. I will be collecting dividends from several stock positions and we manually reinvest those that do not automatically reinvest into new or established stock holdings.