By: Bob Haegele
August 25, 2016
The online world has has made it easier for people to invest, and they don’t need a lot to get started. The market is more accessible for first-time investors thanks to online platforms like Betterment that offer an easy way to start building their net worth. But it’s not without its risks. So, it’s important to analyze each financial investment carefully before you decide to pull the proverbial trigger.
Diversification
There are many different opinions about which investment strategies work better than others, but there is one that everyone is in agreement on. And that is the importance of diversification.
To put it simply, diversification is the investor’s way of saying that you shouldn’t “put all your eggs in one basket.” In other words, you should spread your investment dollars into more than one type of assets and stocks, and you should put them into a variety of industries. Using this strategy will minimize your overall risk in the market.
Click for Betterment Pricing and Details.
What to Invest
As a rule, you shouldn’t invest more than 10% of your money in the stock market because there is always a chance that you will lose it. Keeping this margin will prevent you from blowing through your entire savings.
You can consider putting part of what’s left over into the following assets:
These types of investments are good for first-time investors, and they can be kept over the long term. But you want to make sure you keep your management costs low because you want to get the best possible return.
Compare to competitors: M1 Finance vs. Betterment
Finding the Right Online Broker
There are many different platforms for online trading, which can make it difficult to find the right one. However not all online brokers are created equal. So, it’s important to learn more about a company to find out if it will fit your investment needs.
Betterment has a simple system that is perfect for the first-time investor, and they have a user-friendly interface that is easy to use. But in spite of its simplicity, there is no guarantee that you will win. In fact, you should be constantly mindful of the risks involved in investing, and you should make sure you have a solid strategy that will keep you successful over the long term.
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- Pros and Cons To Stock Market Investing
- Day Traders Must Use Volume Weighted Average Price
- Leveraged ETFs vs Futures and Options
- Investment Diversification
Types of Assets
Betterment offers a variety of assets, and they even offer a way to start saving for retirement. They even have rollover options available if you want to move money from an existing IRA.
Here is a list of the assets offered by Betterment:
All of these are great long-term investments that can help you earn income and build savings quickly.
Portfolio Management
In addition to a variety of long-term assets, Betterment has other features that make it easier to manage your portfolio. These include:
The fact that many of these processes are done automatically will save you money and a tremendous amount of time. Betterment will automatically deposit any dividends you’ve earned on any of the following schedules:
- Monthly
- Semi-monthly
- Bi-weekly
- Weekly
The great thing about this feature is that you can choose how often you want to get paid. The downside, however, is that they will not automatically reinvest your dividends. So, if you want to put money back into a mutual fund or bonds, you will have to do it yourself.
Final Thoughts
It should be clear by now that Betterment doesn’t offer a lot for day traders and short-term investors, but it has a lot of great features for someone who wants to build a lasting portfolio they can keep over the long term. Plus, their management fees are lower than most of their competitors, which makes it a great platform for first-time investors.
And Betterment doesn’t overlook the importance of retirement planning, as they can help you find a good IRA that can help you save for when you’re older. So, if you’re thinking about getting into the market, but aren’t sure where to begin, you should give this company a serious look and think about creating an account now.
Click for Betterment Pricing and Details.
Betterment Comparisons:
- Betterment vs Wealthfront
- Betterment vs Acorns
- Betterment vs Vanguard
- Betterment vs Fidelity
- Betterment vs Robinhood
- M1 Finance vs Betterment
- Betterment vs Sofi
- Betterment vs Stash
- Betterment vs Charles Schwab
- Betterment vs Personal Capital
- Betterment vs Ellevest
- Betterment vs ETrade
- Betterment vs Wealthsimple
