When a person thinks about saving their money, they would end up thinking about investment. But the next thing that comes into their minds is whether the investment is safe. Hence, the solution to such fear is Roboadvisors.
In this article, we mention who are roboadvisors and the most common kinds that are easily accessible by many.
What or Who Are Roboadvisors?
A roboadvisor can be a good solution for someone who does not want to hire a financial advisor; or doesn’t have enough assets to hire a financial advisor yet; or for someone who has typically been a do-it-yourself investor, but no longer wants to select investments, rebalance, and place trades on their accounts.
Roboadvisors were created to make investing as simple and accessible as possible. No prior investment experience is required and set-up is easy. Let their automated intelligence track your investments in the background, and pay lower fees in the process.
Roboadvisors can automatically select investments and build a diversified portfolio for you. Once your funds are invested, on an ongoing basis, the software automatically makes changes to the investments; in order to align your portfolio back to a target allocation. Some roboadvisors even make trades automatically to help reduce your tax bill—a process called tax-loss harvesting.
Hence, if you are a do-it-yourself investor, these low-cost online roboadvisors can help you build a better portfolio.
More Insight –
Most Common Roboadvisors –
One great roboadvisor that is recommended to first-time investors is Wealthfront.
Their fees are reasonable at 0.25%, but the kicker is that you can get your first $5,000 managed free.
So if you’re looking to start investing with little money, Wealthfront could be the way to go. You’ll need $500 to get started though with Wealthfront so keep that in mind.
#2 M1 Finance
If you don’t have that $500 starting balance, there are still great options for you in the roboadvising space.
M1 Finance charges no commissions or management fees, and their minimum starting balance is just $100.
You can choose from one of their pre-made diversified portfolios; or customize your own by purchasing stocks and ETFs through their platform. The user-interface is super easy to use.
If you’re starting out with less than $100, you may want to consider Betterment; which has no minimum starting balance whatsoever.
Like M1, it’s also great for beginners as it provides a super simple platform and a hassle-free approach to investing.