Deciding Where to Put Your Money Is Tough. These Are the Top 10 Investments Made by Robinhood Users

Should you buy investments that are popular on Robinhood? 

Opening a brokerage account and investing your money is one of the best things you can do to build wealth over time. But once you have your brokerage account open, there's a crucial step you have to take. You need to figure out what assets deserve a place in your portfolio.

It can be really tricky to do that, so it can sometimes feel helpful to take a look at what others are investing in. In particular, here are the 10 top investments made by Robinhood users. 

The top 10 Robinhood investments

Robinhood is a really popular trading app -- especially for younger people and for newer investors -- because it makes investing really easy, it has a simple trading platform, and it has a great mobile app. 

But Robinhood users tend to focus on a particular set of investments, as you'll see by checking out the top 10 investments users of this app make:

• Amazon (AMZN)
• AMC Entertainment (AMC)
• AMC Preferred Equity (APE)
• Apple (AAPL)
• Disney (DIS)
• Ford Motors (F)
• GameStop (GME)
• Microsoft (MSFT)
• NIO (NIO)
• Tesla (TSLA)

These stocks include tech companies, as well as electric car stocks, which isn't surprising. Young investors tend to be heavy users of innovative products, so it's natural they would want to invest in emerging technologies. 

But they also include some surprising names, such as AMC Entertainment and GameStop. This is not because Robinhood users necessarily think these companies are destined for great things, but instead because these became meme stocks. 

Meme stocks became very popular on social media when a group of Reddit investors noticed that a lot of hedge funds had shorted GameStop and executed a short squeeze by buying up shares and forcing those short sellers to purchase them at inflated prices to cover their shorts. 

The trend of buying meme stocks has continued even though the initial GameStop frenzy has long passed, and it is a dangerous one because the underlying price of shares often becomes divorced from what the fundamentals suggest the company stock is really worth. 

Should you buy popular Robinhood stocks?

There's a lot of information available about hot stocks on Robinhood because many people are interested in seeing what other investors are buying when they make their own investing decisions. 

Unfortunately, watching for hot stocks can be a bad investment strategy. Often, by the time it becomes widely apparent that many people are buying a stock, the price is already inflated beyond what the shares are actually worth. So by the time you notice that a stock is popular on Robinhood or has taken off on social media, there may be little future opportunities for additional gains and the risk of loss may be very high. 

Focusing on what other people are doing is also a bad strategy because they may not share your goals or your investment objectives. You need to build a diversified portfolio of assets that gives you exposure to an appropriate level of risk for your investing timeline -- and this may not match up well with what others are buying.

So, while there's nothing wrong with seeing what stocks are popular on Robinhood and researching them to see if they are worth buying, you should always be sure you are making informed investing decisions after careful research rather than just jumping on the bandwagon. Making smart investments that you plan to hold over a long time is the best way to maximize your chances of success and is the only investment strategy worth following.