Commission-free trading has skyrocketed in popularity in the US. Pioneered by Fintech startup, Robinhood, commission-free trades has revolutionised the world of investing there.

It removes the frictional cost of investing in stocks and ETFs, making investing accessible to anyone and everyone.

For long-term investors, commission-free trading is great. Zero trading fees mean higher returns. It also “democratises” trading such that anyone, even those with a few hundred dollars to spare, can start investing in a diversified portfolio.

But what’s the catch?

Although is it hard to argue with the obvious benefits of commission-free trading, there’s a catch: It creates short-term trading behaviour.

In the stock markets, there’s data to show that long-term investors tend to do better than those who move in and out of the market.

Investors are traditionally bad market timers and tend to buy during a market peak and sell at a market bottom. This short-term