Investing – Investormint https://investormint.com Personal Finance Tools and Insights Mon, 08 Nov 2021 00:16:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.5.7 https://investormint.com/wp-content/uploads/2017/02/cropped-investormint-icon-649x649-20170208-32x32.png Investing – Investormint https://investormint.com 32 32 Personal Capital Review 2021 – Pros, Cons & Fees https://investormint.com/investing/personal-capital-review https://investormint.com/investing/personal-capital-review#disqus_thread Sun, 07 Nov 2021 22:24:25 +0000 https://investormint.com/?p=449 Personal Capital pairs clients who enroll in its robo-advisory service with dedicated financial advisors. This human element distinguishes Personal Capital from most other robo-advisors.

The article Personal Capital Review 2021 – Pros, Cons & Fees was originally posted on Investormint

]]>
PERSONAL CAPITAL SPOTLIGHT

personal capital logo InvestorMint Rating

4.5 out of 5 stars

  • Management Fee: 0.49% - 0.89%
  • Account Minimum: $100,000
  • Brownie Points: Free tools to track spending; human advisors paired with clients

via Personal Capital secure site

Personal Capital is a digital asset management service that offers investment advisory services to its clients. It also provides an online dashboard, making it easy and secure to manage all aspects of your finances, from saving money in banks to getting advice on what accounts you should open.

The personal wealth management company was founded by Bill Harris, a former PayPal and Intuit chief executive. Today, Personal Capital is considered one of the top online financial advisory services and has multiple offices across the US.

Personal Capital Fees

Fees 0.49% – 0.89%
Minimum Investment $100,000
Budgeting Free via Mobile App
Socially Responsible Investing YES
Dedicated Advisors YES
Best for Retirement Planning
401(k) YES
Device Compatibility Android + iOS
Investment Tracking Excellent
Budgeting Best in Class
Promotions Free to Join

Personal Capital comes with three different service levels:

Investment Services

This level is for clients with balances starting at $100k-$200k. The fee for this level is 0.89% of the value of your portfolio plus any fees associated with individual investments, such as 401k or IRA annual contributions and management costs.

Clients receive one financial advisor at this level that will help them make personalized financial plans and provide ongoing support.

Wealth Management

The wealth management level is for clients with balances between $200k – $1M. This level includes the Investment Services and adds on an additional financial advisor and access to a portfolio of individual stocks.

Private Clients

This level is for clients with a balance above $1M. It includes all of the services in Wealth Management, dedicated financial advisors, and an even more intricate stock portfolio.

Fees are reduced to 0.49% at this level once your balance reaches $10M. This level will also give you access to Personal Capital’s investment committee, which will help you make investment decisions. Investment options will also expand to private equity opportunities.

personal capital review

Who Is Personal Capital For?

Personal Capital is for anyone with a balance of $100k or more and who wants to invest their money, grow it by minimizing taxes and fees while maximizing returns.

The types of investors Personal Capital is most suitable for are:

High Net Worth Investors

Since Personal Capital requires a minimum balance of $100k, it is most suitable for high net worth investors. High net worth individuals can benefit from a dedicated financial advisor for their money while investing in private equity opportunities.

Socially-Minded Investors

Personal Capital is also suitable for those who want to invest their money and be socially responsible. It offers unique portfolios that give you access to the best investments aimed at creating a more sustainable future, such as energy efficient companies and organic food producers.

Retirement Investors

For retirement investors, Personal Capital provides free software tools and tax optimization strategies designed with one main goal: helping individuals maximize returns while minimizing taxes in every phase of life. This way, they can make sure they have enough saved up by the time they retire so that they never have to worry about outliving their savings again.

Hands-Off Investors

Personal Capital is an excellent choice if you want to invest your money but don’t have the time or expertise. The fees are on the higher side compared to other investment advisors. Still, they guarantee that their advice will earn you more than what it costs and offer personalized financial planning and ongoing support from dedicated professionals.

Complex Financial Situations

Personal Capital is suitable for anyone with a complex financial situation. They can help you manage your net worth by consolidating all of your accounts, investments, and assets into one place, making them easier to understand and optimize.

In addition, access to financial advisors can bring clarity to your overall financial situation. If you have a lot of assets but are not sure how to manage them, Personal Capital can help by providing professional advice on the best way for you to invest or save money to reach your personal goals.

Investors Who Want To Track Daily Financial Accounts

Suppose you are looking for a way to track your daily financial accounts. In that case, Personal Capital provides its clients with free real-time information on all of the spending and transactions that happen across their different bank and credit card accounts. This way, they can make sure they know precisely where every dollar is going, which will help them better manage finances.

Inquisitive Investors

For investors interested in many different financial products and want to find out about new ones as soon as they hit the market, Personal Capital is perfect for them.

They have access to many investment opportunities across all types of assets classes, including ETFs from most significant companies. In addition, Personal Capital produces many white papers, reports, and industry updates that can help investors stay ahead of the curve.

How Much Does Personal Capital Charge?

As you might expect from a service that pairs you with a dedicated financial advisor who has in depth knowledge of your personal circumstances, pricing and account minimums are higher than at rivals like Betterment and Ellevest.

Annual fees range from 0.49% – 0.89% depending on how much capital you invest. Deposit $100,000 and you’ll pay the higher amount; the more you invest the bigger the fee break.

With a high minimum of $100,000 to get started, not everybody will be a fit for Personal Capital but even if you don’t qualify for money management services, you can still download the free Personal Capital app.

It ranks among the very best personal finance apps and helps you to easily track income, spending, and net worth.

If you want the best of both worlds: automated investment management plus human advisors who know your financial situation intimately, Personal Capital is virtually unmatched.

How Does Personal Capital
Make Money?

When you invest up to $1,000,000, you will be charged a management fee of 0.89%. For example, a client investing $100,000 would pay $890 per year.

For investors with larger account sizes, fee breaks are offered and drop as low as 0.49% for “whales” who invest $10,000,000 or more.

Fees Assets Under Management (up to)
0.89% $1,000,000
0.79% $3,000,000
0.69% $2,000,000
0.59% $5,000,000
0.49% $10,000,000

How Personal Capital
Invests Your Money

Personal Capital incorporates the research of Nobel Prize Winner in Economics, Harry Markowitz, and behavioral finance expert, Shlomo Benartzi, to create an asset allocation formula called Smart IndexingTM that is designed to boost returns and lower risk compared to the S&P 500.

Smart IndexingTM is applied to portfolios with greater than $200,000 invested. (Elsewhere, Smart Indexing is referred to as Smart Beta)

The investment method is designed to increase returns and lower risk by allocating equally to all sectors, as opposed to mirroring the S&P 500.

In back-tested studies, the results show returns outperformed by 1.5% annually using Smart IndexingTM  and reduced volatility compared to investing only in the S&P 500.

The weighted average expense ratio of a portfolio of exchange-traded funds in which assets are invested is a very reasonable 0.09%.

Personal Capital Experts

In addition to providing an online dashboard for managing your finances, Personal Capital also offers advice from experts on investment portfolios based on each individual need as well as risk tolerance levels.

It also helps you build a digital wealth plan according to your specific goals, such as saving enough money for college tuition, planning their investments, tracking their net worth, managing expenses, budgeting for goals, and monitoring investment options.

Personal Capital leverages modern portfolio theory and the effects of correlation and diversification to create a personalized plan for each client. The company also gathers information from other sources such as 401(k), IRA, brokerage accounts, and insurance policies to help clients achieve their goals.

Review Personal Capital: Free Tools

You can use Personal Capital’s free money tracking and management tools without cost. They provide valuable data, such as net worth and expenses. You can also visualize how you spend money each month, what income sources are bringing in the most revenue, and how much cash flow is available to invest or save.

The money management & long term financial tools available include:

Net Worth Calculator

The net worth calculator allows you to track your assets and liabilities over time. It helps you understand how much money is being generated by the investments or holdings that you own and what portion of your net worth reflects cash savings.

Personal Capital also provides steps to how you can improve your net worth, like setting up an automatic savings plan, paying down debt, and investing in tax-deferred accounts.

Cash Flow Analysis

Cash flow analysis allows users to understand their cash position by using data collected from all transaction history linked with bank accounts, credit cards, and investment portfolios added to the system through connections to third-party providers.

Users will be able to see which transactions are complete first in terms of priority, giving them a clear idea of how much cash they have available in the immediate future.

Savings Planner

The savings plan allows users to set a monthly savings goal and see how much they need to save to meet their goals. Users can also choose from different time horizons for saving, which will give them an idea of the types of returns that are expected based on when they start investing.

The savings planner is handy for those who are saving for retirement. This is because users can set a target that will give them an idea of the amount they must invest every month to reach their goals.

Budgeting Tools

The budgeting tools allow you to track expenses and analyze spending patterns. Users can also generate reports so they can gain an understanding of their income, expenses, and net worth over time. This will help them plan for the future by setting short-term goals or establishing a monthly savings target that is more realistic than before.

Users can automatically organize their spendings and savings by category or date, giving them the ability to monitor their expenses and make adjustments based on the real-time data.

Retirement Planner

The retirement planner is a powerful tool that helps users calculate their progress towards retirement, no matter how much they have saved so far.

Users can input desired income and expense amounts and the number of years until they retire to ensure that their savings are on track with what is needed to reach this goal. They can then add expected significant expenses like college fees, home purchases, and other big-ticket items to understand their spending needs.

The retirement planner uses Monte Carlo simulations to give users an idea about the probability of achieving specific goals or what could happen if different factors are changed for example, by increasing the rate at which you save money over time.

Investment Checkup

The investment checkup is a tool that helps users understand whether their assets are appropriately allocated to maximize returns. Users can also assess the risk of their portfolios by looking at asset allocation, past performance, and investment costs.

The investment checkup compares your current holdings with other possible allocations and how they could affect your portfolio. The results will help investors determine whether or not there is a need to diversify their investments by adding low-cost funds, ETFs, and stocks from different companies to cover all risk levels.

Education Planner

The education planner is a tool that gives users an overview of their financial path to college. Users can input different data, including the amount of money saved so far, the number of children currently in school, and expected tuition rates, to see how much they should be saving each year towards their future education costs.

The education planner is an excellent tool for parents who are saving towards their children’s education especially since they can set a goal of how much money they will need to cover tuition costs. This is beneficial because users can track each year’s progress and make adjustments based on what is realistically achievable instead of simply guessing or setting unrealistic goals.

Fee Analyzer

The fee analyzer is an essential tool that helps users understand how much they pay for their investments. Users can uncover hidden fees and compare fees across different investment accounts to see how to reduce costs or switch to a cheaper option.

The fee analyzer can help to expose unnecessary fees. This will help you determine whether certain investments are actively managed or sitting in an account and contribute to higher broker fee costs.

Paid Client Services

Personal Capital’s primary focus is on personal wealth management, and they provide a range of paid services.

These include:

Financial Roadmap

The Financial Roadmap is a personalized financial plan that helps you take control of your future. The tool creates prioritized lists based on data from an individual’s financial history.

The tool helps you make critical financial decisions. It will recommend how much to save for retirement when it’s time to pay down debt and build up an emergency fund or start saving in baby steps by adding more money each month into your savings account every single week without fail.

Personal Strategy

In the world of finance, there are millions of dollars worth of investments happening each day. If you’re looking for a way to diversify your portfolio and get in on some great opportunities at one time or another, then Personal Strategy service can help.

With Personal Capital’s advanced technology combined with their expert team, they offer personalized solutions. This means every individual has their own customized strategy designed just for them, which means better returns along with increased risk management.

Clients will receive a dedicated advisor to help them through their plan and keep track of all progress. Clients will get a tax optimization strategy and the best possible return for their money.

Smart Withdrawal

The Smart Withdrawal service is a tool that gives users the ability to make better spending and savings decisions. This enables them to manage their money optimally while using Personal Capital’s advanced technology. Using Personal Capital’s advanced tax forecasting, clients in retirement will be able to optimize withdrawals for tax efficiency.

Employed Plan Analysis

The Employed Plan Analysis gives clients insight into their existing employer-sponsored plans by providing them with a complete review of their accounts.

This service enables clients to understand the value and potential risk involved in their Thrift Savings Plan (TSP), 403(b), or 401(k). They can use this information to make better decisions that will affect both short-term spendings and long-term retirement planning.

The Employed Plan Analysis helps clients to forecast the value of their accounts in the future by leveraging Personal Capital’s advanced financial technology and tax optimization strategies. This will help them understand how much they should be saving each month to retire comfortably at a time when it best fits into their lifestyle instead of worrying about whether they are on track for their retirement goals.

Socially Responsible Personal Strategy

Like its rival, Betterment, Personal Capital has added socially responsible portfolios to its lineup of products.

The Socially Responsible Personal Strategy® allows customers to invest in companies that make them feel good about where their money is allocated.

For investors who care about environmental, social, and governance factors (“ESG”), and the sustainability practices of companies, Personal Capital now makes it easy to align investments with personal values.

ESG and sustainability data comes from Sustainalytics, a global leader in ESG and corporate governance research so you can have confidence in the integrity of the strategy.

If you elect a Socially Responsible Personal Strategy, the same features apply to your portfolio as with core portfolios, including exposure to all six major asset classes.

It also features Personal Capita’s proprietary Smart WeightingTM methodology to balance exposure to style, size, and sectors within U.S. equity asset classes.

Plus all the benefits that customers enjoy elsewhere still apply to socially responsible portfolios, including:

  • Rebalancing
  • Tax-loss harvesting
  • Tax location
  • Dashboard reporting

Personal Capital Review:
Pros and Cons

Personal Capital sets itself apart from other robo-advisors by connecting clients enrolled in its advisory service to human financial advisors.

Personal Capital Pros Personal Capital Cons
Investment Advice: Personal Capital’s financial advisors help investors optimize their portfolios to meet their individual goals. They work with your current investments, provide advice on new opportunities, and advise how best to manage your money in different life stages. The tools they offer are also great for retirement planning as well as estate planning. High Minimum Investment: The one downside that stands out with Personal Capital amongst all other benefits is its high minimum investment threshold. This means you need to have at least $100,000 if you want access to their wealth management services.
Tax Management: One of the main benefits that high net worth individuals get from using an online wealth management company is tax optimization. Whether you need assistance filing taxes or want someone who can help minimize capital gains and losses, Personal Capital has all types of services available which will make sure every dollar counts when it comes time for tax season. Soft-Sell: When you sign up to the free mobile app, you will be invited to speak with a financial advisor if you have enough money. We found the process to be a soft-sell and not intrusive.
Unlimited Contact To Financial Advisors: Personal Capital clients enjoy unlimited contact with their financial advisors. This means they can ask them as many questions and about whatever is on their mind. This gives peace of mind that they will not be turned away or told that their questions are too small to address. Higher Fees: Compared with most other wealth management companies, Personal Capital has higher fees because of all of the services provided. However, as mentioned before, these benefits often outweigh those costs for high-net-worth individuals who want nothing but the best when it comes to managing money.
Free Mobile App & Tools: The Personal Capital app is about as good as it gets when it comes to tracking spending, income, and net worth.
Individual Securities Research: Personal Capital’s research team spends countless hours analyzing the markets to see any new opportunities that investors should be looking at. They provide detailed reports on which companies could benefit from upcoming trends, how they compare against their competitors and whether or not you should invest in them.
Investment Tracking & Reporting: It is simple and fast to “look under the hood” of your portfolio and spot which assets are performing well or poorly.
iOS & Android Compatible: Whether Mac, PC, iPad, iPhone, iWatch or Android device, Personal Capital syncs with them all.
You Index: With the You Index, you can compare how your portfolios are performing compared to standard benchmarks like the S&P 500.
Retirement Planning: Personal Capital offers retirement planning tools that help people plan for different milestones in their lives. You can use this to determine how much you should be saving and whether or not your current investment strategy will get you where you need to be.

Personal Capital
Fees & Account Minimums

Personal Capital charges higher fees than pure robo-advisors who offer no human advice but less than the average human financial advisor.

Category Fees
Account Management Fees
  • 0.89% up to $1,000,000
  • 0.79% for first $3,000,000
  • 0.69% for next $2,000,000
  • 0.59% for next $5,000,000
  • 0.49% for amounts > $10,000,000
Investment Expense Ratio 0.09%
(weighted average)
Account Minimum $100,000
Annual, Transfer, Closing Fees None
Personal Finance Tools FREE
Mobile App FREE

Personal Capital
Account Types

Personal Capital will manage the following accounts and will advise on accounts that it will not manage.

Type Capability
Individual Non-retirement YES
Joint Non-retirement YES
Roth IRA YES
Traditional IRA YES
SEP IRA YES
Rollover IRA YES
Trusts YES
529 Plan No
(but will advise)
401k YES

Personal Capital Tax Strategy

Personal Capital allocates assets across taxable and tax-advantaged accounts to optimize for tax consequences.

Type Capability
Tax Loss Harvesting YES
(on all accounts)
Tax-advantaged YES

Personal Capital Alternatives

Although there are many benefits to using Personal Capital, investors have other options as well. Some of the alternatives include Betterment and Wealthfront.

Some of the top alternatives to Personal Capital are:

Betterment

Betterment is one of the best alternatives to Personal Capital because it is a mixture of Robo-advisor and bank account. Betterment is perfect for hands-off investors who don’t want to manage anything but still need a way to save for retirement and other financial goals.

Wealthfront

Wealthfront is a cheaper alternative to Personal Capital because their advisory fees are 0.25%. However, unlike Personal Capital, Wealthfront won’t offer instant access to financial advisors or tax optimization services.

Instead, Wealthfront focuses on its technology and automation to help investors grow and manage their money.

Vanguard

Vanguard is a low-cost alternative to Personal Capital. They have one of the most well-known investment strategies and focus on long-term returns rather than short-term.

Mint

Mint is a free alternative to Personal Capital which you can use if you don’t have enough money to meet their minimum investment of $100,000. It is a budgeting app that makes it easier to track where your money is going.

Is Personal Capital Safe?

Personal Capital Security

Users are required to register each device when logging on.

We found that even after registering a computer, Personal Capital looks to validate a user who moves to a different IP address.

For example, if you navigate to the Personal Capital login from a local coffee shop, your identify will be validated again.

All your information is stored as read-only, meaning that even if someone gets a hold of your mobile device and somehow gets past your pin code or fingerprint scanner on iOS devices, they still cannot transfer money from within the Personal Capital app.

The only way Personal Capital could heighten its security is by adding two-factor authentication, which is standard on cryptocurrency digital exchanges, which store your money.

But because your money cannot be accessed via the Personal Capital app, two factor authentication is not as big a concern.

The Future For Personal Capital

Personal Capital has visibility at over $1T in linked account value and provides a wide range of services to individuals and businesses.

It has over 26k wealth management clients and have grown by over 33% in new assets under management within the last couple of years.

With new technologies being developed rapidly, Personal Capital will also look to adapt its services accordingly. This can be seen in their technology-forward mentality and their app, available on both iOS and Android devices.

Personal Capital Review: The Bottom Line

Personal Capital is one of the best online financial advisors and wealth management companies for those with a high net worth. It provides many different services that will help people make smarter decisions with their money, whether optimizing taxes or finding new investment opportunities. For those who may not afford Personal Capital’s services, there are still many free tools on their site that can help you make the most out of your money.

It is designed for higher net worth, fee-savvy investors capable of meeting the $100,000 account minimum.

Is you wish to avoid the higher fees associated with human financial advisors yet still want to have contact on-demand with a dedicated financial advisor, Personal Capital is your best option.

For those who can’t meet the account minimum, Personal Capital offers an excellent mobile app complete with great tools to evaluate spending habits, recommend asset allocation improvements, and visualize retirement goals.

Few robo-advisors provide the top tier service offered by Personal Capital. Even those that offer human advice tend not to pair clients with dedicated financial advisors. So the bottom line is you are looking for a top tier service that combines automated investment management with a personal touch, Personal Capital likely has everything you need and then some.

Still not sure? Check out our Personal Capital vs Betterment review.

Bonus: Personal Capital App Review

In addition to its investment management services, the free Personal Capital mobile app is available to anyone. You can download the app from the App Store if you have an iPhone or iPad, or the Google Play store if you have an Android device.

The app syncs with your bank accounts, credit cards, brokerage accounts and other investment accounts so you can easily track travel, entertainment, taxes, loans, personal care, clothing, groceries, and so on.

You can use it monitor spending habits but it’s more than a simple budgeting app because it tracks your assets, liabilities, and net worth too.

Bonus 2: Personal Capital Retirement Fee Analyzer

For fee-conscious investors, the Retirement Fee Analyzer is an excellent tool to help you identify at a glance how much of your money is being lost on pesky fees charged by funds.

It will also inform you how much to modify each asset class holding to match your recommended targets.

And it provides retirement forecasts so you can see what needs to be done to hit your retirement income goals.

personal capital fee analyzer

> Compare Personal Capital vs Mint

 

 

The article Personal Capital Review 2021 – Pros, Cons & Fees was originally posted on Investormint

]]>
0
thinkorswim vs tastyworks: Review 2021 https://investormint.com/investing/thinkorswim-vs-tastyworks https://investormint.com/investing/thinkorswim-vs-tastyworks#disqus_thread Wed, 22 Sep 2021 13:59:37 +0000 https://investormint.com/?p=3534 thinkorswim vs tastyworks is a comparison of specialty options trading platforms that have low commissions costs and fees, powerful tools and simulators, and fast, accurate order execution.

The article thinkorswim vs tastyworks: Review 2021 was originally posted on Investormint

]]>

thinkorswim®

tastyworks logo

tastyworks vs thinkorswim is a battle of specialty options trading platforms beginning with the lower-case letter ‘t’ – which may not be a coincidence because the two platforms were founded by similar executive teams.

The similarities don’t end there; both support fast and accurate order execution, low commissions costs, world class technology, and an extensive suite of tools.

etf stock tradingthinkorswim has a head-start of almost two decades on tastyworks, but when comparing the respective trading platforms, tastyworks stands toe-to-toe on many dimensions.

tastyworks rises head and shoulder above industry peers when it comes to content thanks to its live daily video broadcasts.

thinkorswim beats the pack when it comes to tools, simulators, analyzers, and back-testing features.

If you want a souped-up options trading platform, you won’t go wrong with either thinkorswim or tastyworks, but which one is best?

thinkorswim vs tastyworks

Both thinkorswim and tastyworks are specialty options trading platforms created by traders for traders.

You can trade stocks, options, futures and ETFs on both platforms but if you also want forex, thinkorswim is best.

tastyworks has the edge when it comes to accessibility. While downloadable desktop and mobile platforms are supported by both, tastyworks also provides a web-based interface that is as powerful as its desktop version.

thinkorswim still has the edge on tools but the tastyworks trading platform is still comparatively new and what is currently available is just the tip of the iceberg of what is likely to come if the history of what the team built at thinkorswim is anything to go by.

thinkorswim Fees vs tastyworks Fees

tastyworks and thinkorswim have both joined the race to the bottom when it comes to commissions charges. That’s a huge win for traders as zero dollar stock commissions become the industry norm.

Amid fierce competition on fees, tastyworks was the first to fire a shot across the bow to its rivals by charging no commissions on closing trades. Clearing fees, which tastyworks has no control over, still apply.

tastyworks fees

Options Opening Trade Stock Opening Trade Futures Opening Trade All Closing Trades
$1.00
(per contract)
$0.00
(unlimited shares)
$2.50
(per contract)
$0.00
(clearing fees apply)

thinkorswim fees are highly competitive too but tastyworks has the edge with its innovative pricing model on closing trades.

thinkorswim fees

Options Trades Stock Trades Futures Trades Forex Trades
$0.65
(fee per contract)
$0 $2.25
(per contract)
$0.10
(per 1,000 units)

Unlike tastyworks, thinkorswim also supports buying and selling of mutual funds. You won’t be charged for transacting NTF (no-transaction-fee) or Load funds but a charge of $49.99 applies to no-load mutual funds.

tastyworks vs thinkorswim
Options Strategies

tastyworks and thinkorswim support virtually any options trading strategy you can dream up, and feature portfolio margin if you want to goose your returns but beware that risks increase too when you use portfolio margin leverage.

As you might expect of specialty options trading platforms built by real traders, virtually any options strategy imaginable can be traded on either platform, including:

Type Description
Stock & Options Strategies
Options-only Strategies

Both tastyworks and thinkorswim understand options trading risks well, so almost any combination of strike prices, contract numbers, and expiration months can be supported as long as you can cover the risks.

Both support trading on portfolio margin, which amplifies both gains and losses.

tastyworks vs thinkorswim
Tools

tastyworks and thinkorswim have extensive tools to help you make better trading decisions. With its head-start, thinkorswim has a larger array of powerful tools than tastyworks, which offers its own suite of innovative dashboard selections.

tastyworks and thinkorswim are both intended for self-directed, fee-conscious traders, and that means you get access to a dizzying array of tools to help you make better trading decisions.

tastyworks

At tastyworks, the dashboard is easy to read and features Portfolio, Analyze, and Trade tabs.

tastyworks browser monitor display

You also have access to a feature called Follow on the web-based version, which is a curated flow of stock market ideas from experts.

If you are new to options trading or stock market trading in general, the Follow feature is especially valuable to see how top options traders are trading.

And if you are an experienced trader, it is helpful as a discovery tool to spot new trade ideas.

A bonus is that you will see tastyworks team members, such as the renowned Tom Sosnoff, feature in the Follow section.

tastyworks trader view

If you want to vet trading ideas of your own, the Analyze tab is the place to go on your web-based dashboard.

Before placing an options trade, you get to see what your unrealized gain or loss would be at expiration when time-decay has eroded all time value from options.

Realized gain calculations, fees, and duration are all displayed intuitively too.

tastyworks browser order display

Another gem you will find on the tastyworks platform is the Correlation Matrix.

Let’s say you wanted to see how much Apple moved when Google or Twitter moved by a certain amount.

Or if you wanted to know how much the S&P 500 moved relative to a Gold ETF or a 20-year Bond, you could easily track those correlations.

tastyworks browser insights display

thinkorswim

thinkorswim is a clear leader in providing world class tools to active traders. Here are just a handful of the standout features on the thinkorswim platform:

Feature Description
View platform on many devices When you customize your platform settings on one device, those preferences carry over to other devices.
In-app chat & sharing You can send live texts to trading specialists within the thinkorswim mobile app and even share your screen to get immediate assistance.
Customer alerts When certain price and/or technical levels are triggered, you can set notifications so you can act quickly.
Get social sentiment insights You can view how the sentiment for a stock changes over time to see when stocks reach bullish and bearish extremes.

thinkorswim is about as close as any retail trader will get to a professional level platform without having to pay pro-level fees.

Unlike some other platforms, thinkorswim has no data fees or hidden fees, so what you see is what you get. Commissions and clearing fees are still par for the course.

thinkorswim has so many simulators, analyzers and discovery tools that even the most adventurous trader will be spoiled for choice.

While the selection of tools is extensive, it may seem overwhelming to beginners but hang in there because it is worth the effort when you stumble upon a valuable new tool that helps you make better trading decisions.

Some of the highlights at thinkorswim include:

  • Feature-rich charts with over 300 technical studies.
  • Fast Beta, a proprietary TD Ameritrade technical study that weights recent price data more heavily.
  • thinkScript, an embedded programming language to manipulate existing charts and technical studies.
  • Screening and scanning tools to discover stocks and options that meet certain criteria.
  • Pairs trading where you buy one security and sell another simultaneously.
  • Strategy Roller for covered call traders to automatically roll forward call options on stocks you want to hold for longer time periods.

tastyworks Vs thinkorswim
Overall Winner

Overall, thinkorswim has more bells and whistles than tastyworks so if tools are your top priority then thinkorswim is the winner but if cost is your primary concern then tastyworks is the place to go.

thinkorswim Wins tastyworks Wins
Tools, Simulators, Analyzers: thinkorswim has a dizzying array of technology-powered tools to simulate, test, analyze, and discover new trades. The technical charts are exceptional and customizable, and you can even manipulate them using thinkScript, an embedded programming language. Commissions and Fees: tastyworks has the edge on closing commissions by charging zero commissions on all closing stock and option trades (clearing fees still apply).
Options Strategy Selection: It’s a tie on permitted options strategies. Almost any exotic options trade imaginable as well as all the basic ones can be traded on both platforms. Options Strategy Selection: thinkorswim and tastyworks were both built by traders for traders, so risk is well understood which means almost every options trade conceivable can be placed (provided you have the capital!)
Forex, Bonds & Mutual Funds: TD Ameritrade which owns thinkorswim offers not only stocks, options, ETFs and futures, but also forex, bonds and mutual funds. Customer Support: Customer support is in the DNA of the team at tastyworks. So much so that the c0-CEO has claimed to spend quite a bit of time on the customer support desk so he has a pulse on customer issues.
Account Types: If your financial circumstances are more complex, thinkorswim caters to a broader range of account types. tastyworks supports taxable accounts, traditional IRA and Roth IRA accounts as well as international accounts. Navigability & Access: thinkorswim loses points for having no login area when you visit its website. It’s confusing to discover that you must download a desktop version of thinkorswim. tastyworks by contrast has a web-based interface as well as a downloadable desktop version and a mobile app.

Which Trading Platform Is Best:
thinkorswim or tastyworks?

Comparing thinkorswim and tastyworks is a little like comparing two fine wines – they are both excellent, and you can’t go wrong with either as an options trader.

With that said, thinkorswim will best suit experienced traders who rely on tools and professional level analysis with extensive scanning, screening, and analysis capabilities.

Frequent stock and options traders who are price sensitive should take a serious look at tastyworks because no commissions on all closing trades can add up to some serious savings.

The article thinkorswim vs tastyworks: Review 2021 was originally posted on Investormint

]]>
0
Betterment Review 2021 https://investormint.com/investing/betterment-review https://investormint.com/investing/betterment-review#disqus_thread Wed, 24 Mar 2021 19:35:09 +0000 https://investormint.com/?p=458 Like other robo-advisors, Betterment relies on a computer model and a team of investment managers to manage client funds. See our full Betterment review.

The article Betterment Review 2021 was originally posted on Investormint

]]>
BETTERMENT SPOTLIGHT
betterment

InvestorMint Rating

5 out of 5 stars

  • Promo: Up to 1 Year Free Management
  • Management Fee: 0.25% - 0.40%
  • Account Minimum (Betterment Digital): $0
  • Account Minimum (Betterment Premium): $100,000

via Betterment secure site

In this Betterment review, you will see how Betterment stands apart from its competitors and why it deserves its perfect rating.

Betterment uses a sophisticated computer algorithm as well as a team of investment managers to manage client funds.

The company manages approximately about $22 billion in assets serving hundreds of thousands of investors, and feedback from Betterment clients is overwhelmingly positive.

From automated investment management to human advice and from retirement tools to smart saving, Betterment is the most complete robo-advisor and is virtually unbeatable on price.

Betterment Review

betterment brokers trading system robo adviser

There are good reasons why over 500,000 people have signed up to Betterment.

While most robo-advisors launch their services with purely digital advice, Betterment has expanded its product offering to include a wide variety of additional features, including tax-loss harvesting, socially responsible investing, goal-based investing, and cutting-edge financial tools and calculators.

Although Betterment has been an industry leader for years, it strengthened its claim as the best robo-advisor when it added human financial experts to its already strong product offering.

With so many bells and whistles, you might expect Betterment to charge hefty fees, but its pricing is highly competitive, ranging from 0.25% to 0.40% depending on what service level you choose.

If you want automated investment management only, the lowest fees are charged however if you want access to human advice, you will pay the higher amount.

Betterment Promo + Features

Fees 0.25% – 0.40%
Minimum Investment $0
Tax-loss Harvesting Yes on all taxable accounts
Socially Responsible Investing YES
Live Advisors YES
Portfolio Rebalancing YES
401(k) Advice YES
Device Compatibility YES
Customer Support Phone, Live Chat, Email
Promo Up to 1 Year Free

Betterment Promo

If you make a deposit within 45 days, you can receive a reward and with a deposit of $250,000+ get up to one year of automated investment management free.

Deposit Managed Free
Investment deposits within 45 days Reward
$15,000 – $99,999 1 month
$100,000 – $249,999 6 months
$250,000 1 year

You also get a free investment review to help you assess your current investment approach. Four areas are covered, including:

  • Investment accounts
  • Tax savings
  • Fees
  • Risk exposure

Is Betterment Right For You?

Betterment initially offered just a pure robo-advisor service, now called Betterment Digital. Now, Betterment includes Chartered Financial Professionals as part of its Premium offering; this has a higher minimum of $100,000, compared to no minimum for Betterment Digital. 

Fee-conscious, hands-off investors focused on the long-term will find Betterment portfolios to be a great fit.

Unlike traditional financial advisors, who typically charge north of 1% annually, Betterment fees are just 0.25% for its fully automated offering, Betterment Digital.

Customers who value support will find Betterment to be exemplary. Customer service is embedded in the Betterment culture. For example, CEO Jon Stein is known to answer customer phone calls from time to time, thereby setting the example across the firm that customer satisfaction is a top priority.

Betterment CEO Jon Stein

The company serves stock market beginners, savers and non-self-directed investors exceptionally well. The online portal is easy to use and complete with education, financial tools, and retirement calculators.

It’s easy to transfer funds, set financial goals to target retirement objectives and shorter term targets, such as buying a car, and even analyzing outside portfolios to gauge diversification and fee levels.

For clients wishing to save and invest for retirement, but who are not keen on a self-directed approach, Betterment is the de facto standard other robo-advisors aspire to reach.

Betterment portfolios are best for:

  • Investors of any wealth level
  • Investors focused on the long-term
  • Hands-off investors
  • Investors who want excellent support
  • Retirement investors

RETIREMENT INVESTORS

Betterment doesn’t just serve growth-oriented investors who are a long way from retirement. It also offers a low-risk alternative to the Betterment portfolios that are designed for retirement investors, called the Blackrock Target Income Portfolio Strategy.

The portfolio is made up 100% of bonds with a range of income targets designed to provide steady income with low risk.

The interest earned from bonds is generally taxed as ordinary income, so it is best suited for a retirement portfolio that enjoys deferred tax breaks, like a Betterment IRA.

betterment expected income yield blackrock income

Betterment Fees

Betterment fees are tiered based on the customer plan selected:

  • 0.25% of assets under management for Betterment Digital, which is a purely automated advisory and tools service.
  • 0.40% of assets under management for Betterment Premium, which provides account monitoring by a team of Chartered Financial Professionals and permits unlimited phone calls and email access.

Reviews Of Betterment Investment Method

betterment review

How good are Betterment returns? According to the robo-advisor, annual returns are 2.9% better than the average investor.

Betterment Investing Review: The company’s investment philosophy has been influenced by Robert Shiller and Eugene Fama, both Nobel Prize winners.

Betterment offers an automated investing solution designed to counter the risks associated with emotional investing, such as being greedy when markets are buoyant and selling in a panic when markets fall.

Betterment portfolios are designed to generate optimal returns for each level of risk appetite by creating low-fee, diversified portfolios made up of exchange-traded funds from up to 12 asset classes.

Proprietary algorithms are in place to automatically rebalance portfolios if certain positions start to drift and weigh more heavily on the overall portfolio.

BETTERMENT ETF STOCK FUNDS

Fund Type Symbol
Vanguard U.S. Total Stock Market ETF VTI
Vanguard U.S. Large Cap Value Index ETF VTV
Vanguard U.S. Small Cap Value Index ETF VBR
Vanguard U.S. Mid Cap Value Index ETF VOE
Vanguard FTSE Developed Markets ETF VEA
Vanguard FTSE Emerging Markets ETF VWO

BETTERMENT BOND FUNDS

Fund Type Symbol
iShares Corporate Bond Index ETF LQD
Vanguard U.S. Total Bond Market Index ETF BND
iShares Short-term Treasury Bond Index ETF SHV
Vanguard Short-term Inflation Protected Treasury Bond Index VTIP
Vanguard Emerging Markets Government Bond Index ETF VWOB
Vanguard Total International Bond Index ETF BNDX

Betterment Tools

Betterment’s stand-out tool is its advanced retirement calculator, RetireGuide. Other valuable tools help you to understand if you are overpaying on fees in your 401k, and help you to invest unused cash.

Retirement Calculator

Betterment provides a retirement calculator called RetireGuide, which calculates how much you need for retirement and whether you are on track to hit your financial goals based on a series of questions you answer.

Retirement goals can be applied to IRA, 401k, and taxable accounts. You can even link external accounts (e.g. bank savings account) to a Betterment Safety Net goal.

Retirement Advice Goals

RetireGuide is not a standalone service. Instead it is integrated to the Goals area so you and your spouse, for example, can project retirement income.

Retirement Goals provides advice on:

  • How much to save for retirement each year
  • How to spread money across taxable accounts, employer-sponsored plans, and IRAs

If you are not sure how much you should be saving each year and what income you can earn from your savings, the RetireGuide calculator can give you insights on these questions and other common ones, such as how much you can afford to spend in your retirement years annually.

The big idea is that spending and savings rates are compared to assess whether sufficient funds will be amassed by retirement to meet spending needs.

By understanding how much you plan to spend each year in retirement and how much you will earn from social security and other supplemental income sources, a nest-egg estimate can be approximated.

All you need to do is sync your existing bank and financial accounts, and Betterment figures out the rest.

Betterment Smart Deposit

Another nice feature we found as we conducted our Betterment review was Smart Deposit.

When you activate it, this tool automatically calculates how much excess cash you have in your bank account above a certain threshold and sweeps it into your Betterment accounts.

Betterment 401k Analyzer

Betterment allows users to connect third-party accounts, including 401ks, analyze fee-savings and recommends portfolio optimizations.

In our Betterment review, we found it easy to connect to outside accounts so portfolios held elsewhere can be analyzed to identify and improve upon expense ratios and performance returns.

External Account Analyzer

What separates Betterment from most robo-advisors is its external account analyzer.

It’s a cinch to set up alerts when high fees hit your account or you have excess idle cash sitting around.

And you will receive visual financial projections to see what your portfolio would look like if you rolled it over to Betterment.

The bottom line is goal projections factor in external accounts too.

Socially Responsible Investing

Socially responsible Investing (Betterment SRI portfolios) is available to all Betterment customers to better align their investment dollars with their personal values.

Is Betterment a good way to invest? Increasingly, customers demand robo-advisors invest their dollars in a way that is aligned with their philosophical beliefs.

You may wish to avoid companies that have controversial histories, such as oil spills and data hacks.

Company Controversy Example
BP Deepwater Horizon oil spill in 2010
Wells Fargo 3.5 million fraudulent accounts set up
Yahoo Data breach of 500 million user accounts
Sterling Jewelers Gender discrimination lawsuit

Highlights of Betterment SRI portfolios include:

  • Tax loss harvesting and tax-coordinated portfolios supported
  • No loss of diversification but a 42% increase in social responsibility scores on U.S. large cap assets
  • Global diversification, tax optimization and cost controls maintained while orienting investments towards environmental, social, and governance criteria.

Betterment Flexible Portfolios

If your preferences differ from Betterment advice, you can choose Flexible Portfolios that provide you more control over how you allocate your capital to asset classes. 

Betterment Investing Review: Beyond socially responsible portfolios, Betterment now offers Flexible Portfolios to customers who want to exercise more control over their investing preferences.

You can modify asset class weights within a Betterment portfolio strategy and receive real-time feedback about how those changes affect portfolio diversification and risk.

The standard benefits apply to Flexible Portfolios, including  automatic rebalancing, Tax-loss Harvesting+, Tax Coordination+, and Tax Impact Preview.

The one caveat is you will need to invest $100,000 or more to gain access to Betterment Flexible Portfolios.

Betterment Tax Efficiency

Betterment Tax Strategy: The goal of investing is to put more money in your pocket, and while focusing on gross stock market returns is good, paying attention to how much you get to keep after taxes is important too.

To optimize for tax efficiency, Betterment uses two primary methods: tax-loss harvesting and tax-coordinated portfolios.

Betterment allocates money between taxable and tax-advantaged accounts to optimize for tax consequences.

Type Capability
Tax Loss Harvesting YES
(daily on all taxable accounts)
Tax-Coordinated Portfolio Tool YES
(allocates assets across tax-advantaged and taxable accounts)

TAX LOSS HARVESTING

When you have winners in your portfolio that you plan to sell, you can lower your tax bill by selling losers that count against those winners. This practice of counting losers against winners to minimize your tax impact is called tax-loss harvesting.

But if you have sold two positions, is your portfolio still diversified? Maybe not! And that’s why Betterment replaces the sold security with a similar one to ensure that your asset allocation is optimized.

Capital losses can lower your ordinary taxable income by up to $3,000 annually, creating significant savings over time.

Betterment claims that tax-loss harvesting can generate surplus returns of as much as 0.77% annually.

That may not seem like a lot, but over time it translates to an extra $44,692 in portfolio gains in a taxable account.

betterment gains chart

TAX COORDINATED PORTFOLIOS

How good is Betterment? Boosting after-tax returns in your taxable account via tax-loss harvesting is one thing but how do you minimize the impact of taxes across all your accounts, both retirement and taxable?

That’s where tax-coordinated portfolios come into play.

The idea in a nutshell is to put tax-inefficient assets into tax-efficient accounts and tax-efficient assets into tax-inefficient accounts.

If that sounds like a brainteaser, here is the simple way of thinking about it. A municipal bond already enjoys tax advantages, so Betterment wouldn’t put it into a retirement account, such as an IRA, that already enjoys tax benefits. Instead, the municipal bonds would be placed into a regular taxable account that is less tax-efficient.

Without asset allocation applied to accounts, a portfolio may look something like this:

without allocation: aggregate asset allocation for 70% stocks by account

But with asset allocation, the overall portfolio would look like this:

with allocation: aggregate asset allocation for 70% stocks by accountBetterment claims tax-coordinated portfolios can boost portfolio value by as much 0.48% per year, which translates to as much as 15% over 30 years.

TaxMin Lot Selling

Betterment has developed a series of rules called TaxMin that automatically apply when a security is sold.

Most brokers use an approach called FIFO (first-in, first-out) that compares when securities are bought and sold but Betterment examines not only the timeline of purchases and sales, but also the cost basis too in order to lower the tax impact of stock or ETF sales.

Betterment strives to generate higher returns after taxes by following a strict order in which lots are sold:

  1. Short-term losses
  2. Long-term losses
  3. Long-term gains
  4. Short-term gains

The idea is to exploit all taxable possibilities in one category before moving to the next.

In the example below, Betterment saves a customer $3,883 by using its proprietary TaxMin algorithm versus applying traditional brokerage FIFO rules.

betterment taxmin savings chart

Tax Loss Harvesting For Spouses

If you already have tax loss harvesting turned on in your own account, you can apply it to your spouse’s account too so that your overall portfolios as a couple are managed holistically as one to optimize for taxes.

Betterment Pros and Cons

Betterment has a demonstrated history of success attracting and retaining clients by offering low fees, superb customer support, access to Chartered Financial Professionals, and easy-to-use retirement tools. Although account minimums are high for more personalized service, the fees charged are highly competitive compared to traditional financial advisors.

Betterment Pros Betterment Cons
Low Fees: Low fees are the hallmark of Betterment. Its pure robo-advisor service, Betterment Digital, charges just 0.25% of assets under management. High Account Minimums for Higher Tier Services: $100,000 account minimum for Betterment Premium is a high hurdle for most clients, who on average have less than $50,0000 invested with Betterment.
Premium Service Tier: Betterment Premium (0.40% charge for assets under management) connects clients with pre-screened Certified Financial Planners (CFPs) that provide financial advice. Direct Indexing: Direct Indexing allows investors to buy single securities held by an index and is beneficial in spotlighting tax-loss harvesting opportunities to minimize the tax impact on taxable accounts but Betterment doesn’t offer the direct indexing, unlike some of its rivals.
No Account Minimum: For its purely digital service, no account minimum is imposed – you can open an account and check out Betterment at no cost. ❌ No 529 Plan Support: Betterment does not cater to 529 Plans nor 401k plans, though it will advise on them.
Human Financial Experts: When it comes to human advice, Betterment is on the heels of Personal Capital by connecting clients to Chartered Financial Professionals, which is an especially valuable feature to higher net worth clients with complex tax situations.
Customer Support: Betterment has fast email response times, and though its lowest tier offering does connect clients to support staff, financial advisors are not available for consultations.
Retirement Calculator: Betterment’s retirement calculator, RetireGuide, is visually delightful, clearly showing projections, progress relative to goals, shortfalls, and recommendations to get back on track by retirement age and more.
401K Analyzer: Betterment facilitates easy linkage to outside accounts so non-Betterment portfolios can be analyzed to optimize for performance and improved expense ratios.
Tax Loss Harvesting: Betterment distinguishes itself from traditional financial advisors by systematically finding embedded capital losses and optimizing for the tax impact.
Tax Coordinated Portfolios: Tax-coordinated portfolio can potentially increase after tax returns by an average 0.48% annually for customers who hold Betterment taxable and qualified retirement accounts.
Tax Loss Harvesting For Spouses: Betterment is able to optimize for tax efficiency not only across your individual accounts but also across your spouse’s accounts too.
Socially Responsible Investing: You can align your investment dollars with your values and ethics by investing in Betterment SRI portfolios.

Where Betterment Shines

Betterment Digital is designed to meet the needs of all sorts of investors, so there is no account minimum – a big advantage. The management fee is 0.25%, which is lower than or equal to the amount charged by competitors.

Best of all, financial advisors are available through in-app messaging, so investors aren’t completely on their own.

As a new customers enjoy promotional pricing on management services. For example, Betterment Premium regularly offers up to one year of free management with a qualifying deposit.

Outside of promotional periods, Betterment Premium clients pay 0.40% for extra features, including unlimited phone access to certified financial planners. There are no annual fees, transfer fees, or closing fees with a Betterment account, which can make a big difference for small investors.

While Betterment does most things quite well, there are a few areas of opportunity. If these are important to you, another provider might better fit your needs.

What You Need To Know

First, Betterment does not offer a tool for direct indexing. On large accounts, direct indexing may offer substantial tax savings. Investors with taxable accounts have reduced ability to isolate opportunities for tax-loss harvesting when they work with Betterment.

Next, some financial advisors disagree with Betterment’s strategy for investing funds intended to cover emergency expenses. They state that emergency funds should not be in an account that could lose principal, and they should be easy to access if needed.

In addition, distributions from investment accounts may incur capital gains taxes, while withdrawals from standard savings accounts do not.

Finally, some former clients have pointed out that moving their assets from Betterment to another firm is unnecessarily difficult. They indicate that the process is inconvenient and time-consuming. This could be an issue if you don’t intend to stick with the service long-term.

Betterment Review: Fees & Minimums

Betterment has competitive fee charges compared to other robo-advisors and substantially lower fees than most traditional personal financial advisors.

Category Fees
Account Management Fees 0.25% for Betterment Digital
0.40% for Betterment Premium
Investment Expense Ratio 0.09% – 0.17%
Account Minimum $0 for Betterment Digital
$100,000 Betterment Premium
Annual, Transfer, Closing Fees None
Personal Finance Tools FREE

Betterment Account Types

Betterment manages the following accounts and advises on accounts that it will not manage, such as 401ks.

Type Capability
Individual Non-retirement YES
Joint Non-retirement YES
Roth IRA YES
Traditional IRA YES
SEP IRA YES
Rollover IRA YES
Trusts YES
401k NO
(but will advise)
529 NO

Is Betterment Safe?

Betterment uses bank-level security and offers SIPC protection on each account up to the maximum $500,000.

FAQ Answer
Is Betterment SIPC protected? YES
(up to $500,000 per account)
Does Betterment use 256-bit SSL encryption? YES
Is two-factor authentication used when logging on? YES
Is Betterment regulated? YES
(by FINRA & SEC)
Does Betterment receive kickbacks on ETFs used in my portfolios? NO
Will I be charged trading commissions costs? NO
Is there a fee break when I deposit a certain amount? YES

Betterment Review Summary

A new breed of investment tools has finally leveled the playing field. So-called “robo advisors” make it possible to automate your investment strategy, even if you don’t have millions in your account.

At the top of the list stands Betterment, a top-rated robo-advisor service that offers high-quality financial tools and support at an affordable price.

Should You Choose Betterment?

Betterment serves non-self-directed investors of all wealth levels who are fee-conscious and goal-oriented. In addition to its purely automated investment offering, Betterment Digital, Chartered Financial Professionals are available with higher account minimums for investors seeking more accessibility to experts.

As a top tier roboadvisor, it has lots of tools to support analysis of retirement objectives and provides free syncing with non-Betterment accounts to identify lower fee funds and improved allocation opportunities.

Plus, for customers looking for a little extra handholding, a nice feature Betterment provides is the ability to message licensed financial experts via the Betterment mobile app.

Betterment earns high marks for its focus on tax efficiency through tax-loss harvesting, tax coordinated portfolios, and even optimizing for tax impact across spouse’s portfolios.

The bottom line is if you want an automated investing solution that allows you to be hands-off and is jam-packed with portfolio-return-enhancing features and insightful tools all for a highly competitive cost, Betterment is very hard to beat.


Free Retirement Guide: Grow Your Wealth Automatically


The article Betterment Review 2021 was originally posted on Investormint

]]>
0
Mindful Trader Review: Trading with Math Not Emotion https://investormint.com/investing/mindful-trader-review https://investormint.com/investing/mindful-trader-review#disqus_thread Wed, 17 Feb 2021 18:11:59 +0000 https://investormint.com/?p=14068 Mindful Trader Review: Mindful Trader is a good choice for investors who are confident about following the math behind the market - not the emotion.

The article Mindful Trader Review: Trading with Math Not Emotion was originally posted on Investormint

]]>
While the stock market does have periods of calm, sudden highs and lows are part of the game. Individual stocks are even more volatile, moving up and down on company news, industry activity, and geopolitical changes.

A company’s fortunes can change in a moment, driving share prices higher or lower in unpredictable ways. That makes it tempting for investors to buy or sell based on emotion rather than fact. 

Eric Ferguson knows that letting your emotions drive your trades is guaranteed to lose you money. That’s why he launched Mindful Tradera service that bases investment decisions on statistical research instead of rumors, fear, and unwarranted enthusiasm.  

Mindful Trader: Pros and Cons 

Overall, Mindful Trader has two critical advantages over similar services: 

  • Trade recommendations are based on in-depth analysis of data – not gut instinct, speculation, and rumor. 
  • Mindful Trader has a strong record of success, and Eric doesn’t recommend any trades he isn’t making himself. 

The downside to Mindful Trader is the price tag. While it is a good value as compared to potential returns, it’s a fairly costly method of obtaining investment advice.

Who is Mindful Trader’s Eric Ferguson? 

Some traders focus on news and world events to determine where they want to put their money. They try to predict which industries and companies are most likely to grow based on current trends and potentially game changing products and services. Eric Ferguson takes an entirely different approach. He’s a math guy, and he trades based on the numbers. 

After earning the title of valedictorian in high school, Eric graduated from Stanford University with a degree in Economics.

It’s worth noting that Stanford was quick to accept him given his perfect score on the mathematics section of the SAT. He’s always been interested in identifying patterns, and he uses price movement tendencies and historical probabilities to determine where and how to invest. 

Eric might be a mathematical genius, but he is as down-to-earth as they come. He is on a first-name basis with his clients, and he answers most questions personally. Mindful Trader members give him high praise for his ability to share his knowledge in a way that is accessible and easy to understand. 

One had this to say about the Mindful Trader experience: 

My knowledge of trading has grown immensely through Eric’s on-line instruction and chat conversations. His personal care throughout the process has provided security and his openness has allowed me to feel comfortable asking any question about the market.

What is Mindful Trader?

In a nutshell, Mindful Trader is a service designed to provide timely trading alerts to members. It is primarily focused on swing trading, which is the space between day trading and longer-term buy-and-hold methods.

Through its trading alert service, Mindful Trader helps members benefit from gains over the course of several days or weeks. 

It’s important to note that swing trading does carry risks above and beyond those of more traditional, longer-term methods.

Swing traders may be negatively impacted by activity occurring overnight or on weekends, leading to large discrepancies between one session’s closing price and the opening price for the following session. 

Of course, Eric accounts for that risk in making his trade recommendations. He bases his formulas on decades of market behavior.

How Does Mindful Trader Choose Trades? 

Eric is a master of statistical analysis, and he has taken his interest in mathematics to a whole new level in managing his portfolio. He created a proprietary set of strategies based on more than 20 years of market data, and he tested how his portfolio might have performed during that period by applying his strategies backwards over many years. 

The most compelling thing about the Mindful Trader methodology is that Eric has considered all the pesky details that can impact returns. For example, when testing his strategies, he accounted for commissions, slippage, and changes in the order that wins and losses occurred. 

Eric also looks for consistency. He wants the Mindful Trader method to deliver steady returns over time. He indicates that his goal is to ensure diversity while improving the compounding of returns and lowering risk exposure. 

What you won’t find in Mindful Trader recommendations is the “next big thing” – stocks that will jump up or drop based on unpredictable market news. Instead, Eric focuses on patterns developed by established companies over time. 

Mindful Trader alerts are limited to stocks and futures, and Eric focuses on large-cap stocks. That’s an important point, because those companies see consistently high trading volume.

The activity that occurs as a result of Mindful Trader alerts is unlikely to have a significant impact on share prices. That means no chance of so-called “pump-and-dump” schemes, in which stock alert services push members to buy penny stocks and drive the price up. 

Mindful Trader Returns

Eric notes he completed a 20-year back-test to determine how his methods would have performed. The results were nothing short of astonishing.

Had Eric applied his methods to the past 20 years of market activity, he would have generated a median annual return of 181 percent.

For context, that means a $10,000 portfolio would have grown to more than a million dollars today. 

Median means that some years were higher and some years were quite a bit lower. Here is a look at the specifics: 

  • 2001 6 percent
  • 2002 8 percent
  • 2003 160 percent
  • 2004 145 percent
  • 2005 50 percent
  • 2006 150 percent
  • 2007 130 percent 
  • 2008 72 percent
  • 2009 139 percent
  • 2010 126 percent 
  • 2011 129 percent 
  • 2012 205 percent 
  • 2013 147 percent
  • 2014 295 percent 
  • 2015 241 percent
  • 2016 201 percent
  • 2017 185 percent 
  • 2018 197 percent
  • 2019 380 percent

When all the data is in, Mindful Trader might not have generated above-average returns for 2020, but given the market volatility that plagued the year, that is not unexpected. The important point is that when you apply the Mindful Trader methods, historical data shows a pattern of success. 

Mindful Trader Features

The biggest feature of Mindful Trader’s service is clear, detailed instructions on what, when, and how to invest.

Eric offers this sample of a typical trade alert: 

Bought AAPL at 136.98. Set profit target at 138.38. Set stop-loss at 135.29. Closing by 11/26/20.

With this message, members have enough information to move forward: 

  • Ticker – The ticker symbol.
  • Position – Whether to buy shares or short them.
  • Price – The price he paid for his position.
  • Profit Target – The price point at which he will close the position and take profits.
  • Stop-Loss – The price point at which he will assume there is no profit to be made, and he will close the position to minimize loss.
  • Time Limits on Trades – When he plans to close the position, regardless of where things stand.

In other words, it’s simple. Members know exactly what to do, when to do it, and what to expect in terms of potential profits.

Eric states that he is highly selective about trades, and he only chooses those that meet the very specific criteria he has established.

The frequency of alerts varies based on market activity, but the average is between one and three per day. However, there are times when activity is higher, and sometimes days will pass without a trade alert.

All of this speaks directly to the care with which Eric chooses the trades most likely to deliver returns.  

Mindful Trader Pricing

Mindful Trader isn’t inexpensive by any standard, but at $47 per month, it’s not unreasonable – particularly compared to other stock alert services. Consider these alternatives: 

  • Motley Fool Stock Advisor for investors who want to buy and hold – $199 per year (no month-to-month plan available) 
  • Superman Trades for swing traders – $147 per month
  • Tim Alerts for day traders interested in penny stocks – $697 per year (no month-to-month plan available) 
  • Trade Ideas for day traders – $1,068 per year for the basic plan and $2,268 for the premium plan (no month-to-month plan available)
  • Warrior Trading for day traders – $5,997 per year (no month-to-month plan available) 

Clearly, Mindful Trader’s pricing is well within the range established by other trading advisors and stock picking services.

The monthly payment option adds flexibility and reduces commitment – members can cancel if they are not satisfied with Eric’s alerts. 

Who Is Mindful Trader Right For?

If you are interested in day trading – the practice of making multiple trades during a single session and holding shares for less than a day – Mindful Trader isn’t the right service for you.

The same is true if you are looking to build a portfolio intended to create long-term returns. Both types of trading require a different sort of research than swing trading. 

However, if your goal is to buy and sell the same shares within a period of a few days or weeks, you are using a swing trading strategy – and Mindful Trader has exactly what you need at the precise moment you need it. 

You don’t have to be an expert in meditation or mindfulness – Eric has that part covered. You also don’t have to sit in front of a computer all day.

These alerts are intended to work for average retail traders who have full-time jobs that keep them busy. The idea is to set up the trades as soon as possible once you receive the alerts, but unlike day trading, a few hours rarely makes a difference. 

What you do need is an appreciation for the logic behind statistical probabilities and the market’s patterns of behavior. That ensures you are confident in making the recommended trades shortly after you receive an alert. 

How To Get Started with Mindful Trader

The beauty of Mindful Trader is that you can start benefiting from the service right away, no matter how much experience you have with the stock market.

All you need is a brokerage account, the ability to receive text messages and/or email, and whatever amount of cash you want to invest. 

Some of the most popular self-directed brokerage firms include: 

  • Ally Invest – no-fee stock trades, no minimum balance 
  • Cash App – no-fee trades, no minimum balance 
  • Charles Schwab – no-fee trades, no minimum balance 
  • E*Trade – no-fee trades, no minimum balance 
  • Fidelity – no-fee trades, no minimum balance 
  • Merrill Edge Self-Directed – no-fee trades, no minimum balance 
  • SoFi – no-fee trades, minimum balance of $1 
  • TD Ameritrade – no-fee trades, no minimum balance 

Once you have funds in your brokerage account, you are ready to act on Mindful Trader alerts. 

Mindful Trader Review: The Bottom Line

The bottom line is that Mindful Trader is a good choice for investors who are confident about following the math behind the market – not the emotion. Participation takes almost no time at all, and the monthly fee is reasonable considering the potential gains. 

As with all investments, past performance doesn’t guarantee future success, and the Mindful Trader methods may not be effective going forward. That means you should consider your investments a gamble, and you should never invest more than you can afford to lose. 

The article Mindful Trader Review: Trading with Math Not Emotion was originally posted on Investormint

]]>
0
Stock Rover Review https://investormint.com/investing/stock-rover-review https://investormint.com/investing/stock-rover-review#disqus_thread Tue, 02 Feb 2021 09:47:10 +0000 https://investormint.com/?p=14044 Stock Rover is right for professional investors who make their living by finding patterns in the behavior of the market and individual stocks

The article Stock Rover Review was originally posted on Investormint

]]>
Investing in the stock market has never been more accessible than it is today. Self-directed online brokerage accounts, partial share purchases, and elimination of fees, commissions, and minimum balance requirements have made it possible for anyone to invest – regardless of how much is in their bank accounts or their level of experience.

The downside to self-directed investing is that it’s hard to know which securities match your level of risk tolerance and your financial goals. Obtaining customized trade recommendations generally requires a relationship with a costly investment or financial advisor.

But what if you could access the same in-depth analysis and detailed information that experienced advisors use to make those recommendations?

That’s what Stock Rover set out to do with its comprehensive collection of tools, resources, and reporting.

Stock Rover gives you access to the sort of financial data that was once limited to market experts, which is a game-changer for self-directed investors who aren’t connected with the financial services industry.

What Is Stock Rover?

Stock Rover isn’t a brokerage service, and you can’t make trades directly through this platform – you’ll need a brokerage account with another company for that. What Stock Rover does offer is the most robust set of research and analysis tools available to the general public.

Depending on the level of service you choose, you can examine and compare potential investments against more than 650 metrics. The information can be organized and your view can be customized based on the criteria that you choose, and everything is laid out in an organized format with user experience in mind.

stock rover review

Granted, the level of detail available through Stock Rover is likely more than most beginner and casual investors need. These tools tend to be more valuable for those who are making their careers in the stock market – for example, financial services professionals, day traders, and long-term technical investors. However, that doesn’t mean beginner and casual investors should pass on Stock Rover altogether.

Flexible pricing plans – including one level that is completely free of charge – make it easy and affordable to explore information available through Stock Rover and make better decisions for your self-directed brokerage account.

Better still, the platform offers a series of video modules and webinars that take participants through Stock Rover’s features, answering common questions and illustrating how to make the most of the platform’s tools and services.

What Does Stock Rover Offer?

To begin with, Stock Rover offers educational materials that take a deep dive into various components of the market. For example, there are a variety of research reports published by industry experts that outline industries and individual securities.

In many cases, these reports give investors at every level of experience the opportunity to see potential trades from the perspective of those who rely on investment success for their livelihoods.

Reading through research reports can be exceptionally time-consuming, and not everyone has an interest in getting down to granular financial details. For those that prefer a less complex analysis, Stock Rover offers regular blogs and newsletters that outline critical factors influencing market movements. These tend to provide enough information for casual investors to make smart decisions for their portfolios.

Stock, Index, and ETF Data

Stock Rover reviews are virtually unanimous in their view that it offers the most in-depth and detailed stock, index, and ETF data available in a single easy-to-use platform.

It is one of the only options that provides a complete 10-year history for hundreds of financial metrics, along with analyst ratings, earnings information, and dividend information.

Stock Screener

Most stock screening tools tend to be mediocre at best in terms of pinpointing the data that will have the greatest impact on your trading decisions.

Stock Rover’s stock screener tools are widely considered best-in-class, with options to perform portfolio correlation, examine margin of safety, screen for dividends, and evaluate fair value.

You can access more than 130 customizable stock screeners from categories like these:

  • Value Stock Screeners

Growth Stock Screeners

  • Dividend Stock Screeners
  • ETF Screeners

There is also a series of screeners based on selections by world-class investors like Warren Buffett, Benjamin Graham, Joel Greenblatt, and similar. Note that some of the screeners can only be accessed by Premium Plus Plan members.

Alerts

As you research potential trades, you are likely to come across investments that make sense for you if and when certain criteria are met.

Stock Rover gives you the option of setting up email and text alerts that notify you when changes occur.

These alerts are highly customized, so you can choose which securities prompt alerts and under what circumstances.

Many investors appreciate this feature, as it takes the pressure off of them to constantly monitor movement in the marketplace.

Portfolio Analysis

One of the most popular features on Stock Rover is its portfolio analysis tool.

You can link your brokerage account to your Stock Rover profile, and the service produces reporting and recommendations for optimizing performance.

For example, Stock Rover manages profit and loss reporting, income reporting, and scoring. It suggests effective methods of balancing and rebalancing your investments within your portfolio, and it analyzes and reports on your portfolio’s risk and returns.

Asset allocation is a big concern, particularly in today’s volatile market. Stock Rover examines your exposure to various industries and market sectors, then suggests options for reallocating your investments to protect your returns.

Finally, within the portfolio analysis tools, you can track the performance of your customized list of watched stocks, and you can access news and research on the stocks of particular interest to you.

Stock Rover Pricing Options

The amount you pay for Stock Rover access depends on the type of tools you wish to use. Stock Rover offers a free plan, as well as three levels of paid plans that add features as the price increases.

In addition to these plans, which are primarily focused on stock evaluation, screening, and portfolio analysis, Stock Rover offers a separate plan for research reports.

This can be purchased as a stand-alone option or bundled with one of the evaluation and screening plans.

Free Plan

If you aren’t sure whether Stock Rover is right for you, there is no need to commit. You can start with the free plan that includes a number of useful features just right for investors in search of basic research tools.

The Free Plan offers the following at no charge:

  • Market data
  • Market news
  • Investment suggestions and tips with “screener of the week” top ten picks
  • Earnings calendar
  • Single stock research, including valuation, growth, profitability, and similar in chart format
  • Brokerage account integration

Essentials Plan

Pricing for the Essentials Plan gets less expensive when you purchase the one-year or two-year membership:

  • $7.99 per month
  • $79.99 per year
  • $139.99 for two years

This plan includes information on more than 8,500 North American stocks, along with 4,000 ETFs and 40,000 funds.

The primary tools and features are as follows:

  • More than 260 unique financial metrics
  • Five years’ worth of financial history
  • Customizable layout
  • Investment comparison options
  • Stock screening tools
  • Brokerage integration
  • Portfolio management
  • Watchlists with tracking
  • Analysts ratings and rankings updated daily
  • Customized text and email alerts
  • Access to the Stock Rover Investment Library
  • On-going help and support

Premium Plan

The Premium Plan is a bit more costly than the Essentials Plan, but most members find the additional features make up for the extra expense.

Pricing for the Premium Plan is as follows:

  • $17.99 per month
  • $179.99 per year
  • $319.99 for two years

This plan includes everything available from the Free and Essentials Plans, as well as the following features:

  • An additional selection of metrics for a total of more than 350
  • Ten years’ worth of financial history
  • The ability to export data
  • Stock and ETF screening capabilities
  • Ranked screening capabilities
  • More than 100 financial metrics that can be displayed in chart format
  • The ability to chart multiple metrics
  • Additional alerts features
  • Additional portfolio analytics tools
  • Dividend income projection tools
  • Analysis of correlation
  • Tools for planning trades and rebalancing portfolios
  • Multi-monitor capabilities
  • The ability to add notes and comments
  • Priority email support

Premium Plus Plan

The Premium Plus Plan is the most costly, but it also offers complete and unlimited access to the platform’s most powerful tools. Pricing is as follows:

  • $27.99 per month
  • $279.99 per year
  • $479.99 for two years

This package includes everything available in the Free, Essentials, and Premium Plans, as well as the following additional features:

  • An additional selection of metrics for a total of more than 650
  • The ability to create custom metrics
  • Equation screening tools
  • Historical data screening tools
  • More than 180 screening metrics specifically for ETFs
  • Stock ratings
  • Detailed data on stock fair value and margin of safety
  • Stock scoring, both current and historical
  • Ratio charts
  • Increased data limits
  • Highest priority email support

Which Brokerages are Compatible with Stock Rover?

Stock Rover is compatible with nearly every major brokerage firm – and a lot of minor ones.

Some of the most common brokerages used by Stock Rover investors include the following:

  • Charles Schwab
  • Chase
  • E*Trade
  • Fidelity Investments
  • Merrill Edge
  • Morgan Stanley
  • T. Rowe Price
  • TD Ameritrade
  • Vanguard
  • Wells Fargo

The platform offers a video tutorial and step-by-step instructions for linking your brokerage account to Stock Rover.

What Makes the Stock Rover Platform Different?

Stock Rover reviews make one point very clear. Stock Rover differentiates itself from other research platforms by offering an unmatched selection of data that can be reviewed in customizable, user-friendly charts.

The combination of these two elements creates a service with a competitive edge. After all, the information can be found elsewhere, but unlike other databases, Stock Rover brings a massive amount of data together in a usable format. That’s important for users at every level of experience.

What Type of Trader Is Stock Rover Best For?

Based on the many Stock Rover reviews from users, there are three types of traders that get the greatest benefit from Stock Rover.

First, this platform is the right choice for those who find long narratives and columns of numbers difficult to follow. Stock Rover’s charts and graphs are laid out clearly and effectively to meet the needs of visual learners.

Second, Stock Rover is right for professional investors who make their living by finding patterns in the behavior of the market and individual stocks. This platform offers the sort of in-depth data, reporting, and analysis that makes it possible to enhance predictions of future performance in an attempt to increase returns.

Finally, Stock Rover’s long list of unique screening metrics makes this platform the right choice for everyone who likes to lose themselves in data. There is more than enough detail to satisfy even the biggest appetites for information on market and stock performance.

The article Stock Rover Review was originally posted on Investormint

]]>
0
How To Buy SoFi Stock https://investormint.com/investing/how-to-buy-sofi-stock https://investormint.com/investing/how-to-buy-sofi-stock#disqus_thread Wed, 16 Dec 2020 18:35:39 +0000 https://investormint.com/?p=14023 When SoFi has an initial public offering (IPO) it will be possible to buy shares on an exchange but currently SoFi remains a private company.

The article How To Buy SoFi Stock was originally posted on Investormint

]]>
SoFi sets itself apart in the automated investment industry, because it doesn’t require members to fly solo if they want to save on costs. It offers unlimited phone access to Certified Financial Planners with absolutely no fees.

Considering there is also no minimum balance requirement and SoFi doesn’t charge other account maintenance fees, it’s a great choice for those just starting out in the market.

sofi automated investing review

SoFi gives its member investors the ability to trade stocks and a selection of Exchange-Traded Funds (ETFs). In addition, it is possible to trade cryptocurrency, which is one of the most innovative asset classes of the 21st century.

SoFi caters to investors who do not count themselves in the high-net-worth category, so it is possible to buy fractional shares when whole shares are too costly through the SoFi program known as “Stock Bits”. Investors who can’t otherwise afford Amazon at around $3,000 per share can still “get in” on the game.

That’s just the tip of the iceberg of what the company offers which may have you wondering how to buy SoFi stock?

SoFi 101

SoFi is committed to providing educational resources to its members. There is a comprehensive collection of training tools and educational materials that cover everything from basic financial literacy to advanced investment strategies.

There are also resources designed to support the setting and achievement of short-term and long-term financial goals, which can be helpful to anyone interested in creating a workable financial plan.

SoFi gives its members additional perks that aren’t matched by any of its industry peers. These include no-fee estate planning, career planning resources, and bonuses for referring new members.There is even a social network for SoFi investors that adds a community feel to the platform.

SoFi Powers The Digitization Of Investing

Over the course of the past two decades, much of the world has transitioned to a digital lifestyle.

An abundance of resources are available through home computers and mobile devices, making it possible to do everything from shopping for groceries to researching obscure medical conditions anytime, anywhere. The best part is that all of these tools are available to anyone with an internet connection.

New investing platforms are one of the most innovative developments in the digital world. Instead of paying large commissions and fees to brokerage firms, individuals can access investment opportunities through automated or robo-advisory services.

There are several that lead the industry, thanks to the quality of their technology, as well as the educational and service they provide. Examples include Betterment, Wealthfront, Robinhood, and SoFi.

SOFI SPOTLIGHT
sofi logo 2019

InvestorMint Rating

5 out of 5 stars

  • Management Fees: 0.0% of assets invested
  • Account Balance Minimum: $100

Each has a unique mix of features and benefits designed to appeal to specific types of investors.

Membership in these services is growing rapidly, leading to impressive bottom line results. Some investors want to be a part of that growth by purchasing robo-advisor stock.

The question is how to buy SoFi stock or shares in one of the other platforms? Let’s get to that but first what else does SoFi do?

Is SoFi A Private Lender?

Aside from its investment-related services, SoFi is a private lender that primarily works in the student loan space. It offers undergraduates private student loans, and it has options for refinancing existing student loans.

The one caveat to refinancing government student loans with SoFi is that you may lose access to certain benefits and programs designed to make repayment easier.

Most find that refinancing their student loans with SoFi makes the most sense when it involves an existing private loan rather than a government-backed loan.

In addition to student loans and student loan refinancing, SoFi has made a number of other lending opportunities available. For example, consumers can apply for personal loans and mortgages through the platform, and once approved, they gain access to all of the other benefits of SoFi membership.

Most recently, SoFi has added a credit card to its product list, and it is well on the way to becoming a full service bank.

Is SoFi Safe?

Many investors wonder, is SoFi safe? The answer is yes – it is as safe as any other online brokerage. SoFi qualifies as a broker-dealer, so it is insured by the SIPC (Securities Investor Protection Corporation).

That’s the broker-dealer version of the FDIC (Federal Deposit Insurance Corporation), which protects banking customers. The SIPC ensures that if the broker-dealer fails, in this case SoFi, you can recoup up to $250,000 in cash or $500,000 in securities.

Keep in mind that this insurance doesn’t protect your account from loss of value due to your investment activity.

If you buy stocks that lose value or you invest in a company that goes bankrupt, you could lose some or all of the money you put in.

SIPC insurance is exclusively used to ensure that if SoFi itself goes out of business, you won’t lose any funds the company is holding on your behalf.

The safety of your funds is probably not the only safety issue on your mind. Digital data breaches are all-too-common, and no one wants their personal information in the hands of cyber-criminals.

SoFi uses state-of-the-art technology to keep your information secure, giving you the peace of mind of knowing that all of your financial details will stay private.

Is SoFi Investing Legit?

SoFi investing has more than one million members, and it operates its own ETFs.

Some of the more uncommon selections include the SoFi Weekly Income ETF, which distributes gains each Friday.

The company also offers the SoFi Gig Economy ETF, which is focused on companies like Square, Upwork, and Fiverr – in other words, the companies that connect freelancers with consumers and rely on shared resources for everything from transportation to housecleaning.

In addition, SoFi offers investors the opportunity to purchase shares in publicly-traded companies, and it is one of the few that makes it possible for members to buy and sell cryptocurrency. SoFi is a licensed broker-dealer, and it must comply with all applicable regulations.

SoFi has developed partnerships with some of the most respected names in the financial services industry. For example, in early October, T. Rowe Price Retirement Plan Services, Inc. announced that it would collaborate with SoFi Student Loan Solutions to increase services available to participants in its robust 401(k) programs.

In short, with its partnerships, oversight, and multi-billion valuation, SoFi investing is most-assuredly legit.

Is SoFi A Public Company?

SoFi was founded in 2011 by Dan Macklin, Mike Cagney, Ian Brady, and James Finnigan. Its headquarters is located in San Francisco.

To date, it has brought in a total of $2.3 billion in funding, and it is valued at $4.8 billion. SoFi has appeared on CNBC’s Top 50 Disruptors list for five years, and it is rapidly making its way to the top. In 2019, it was ranked in 26th place, but it moved to 8th place in 2020.

It remains a privately held company, which means investments cannot be made through the open market.

How To Buy SoFi Stock

The bad news is that SoFi stock is not available on the public stock exchanges right now, since it remains a privately-held company. That’s disappointing for investors who want to be a part of SoFi’s rapid growth.

When SoFi does hold its Initial Public Offering (IPO), which allows any investor to buy and sell shares, chances are SoFi members will be among the first to know, and there will be opportunity to get in on the action through the SoFi platform.

Why You Cannot Buy SoFi Stock

Privately-held companies are those that don’t make their shares available to any interested investor.

Instead, all shares and/or ownership interest remains with the founders, managers, and/or private investors.

In SoFi’s case, it’s all of the above. SoFi raised money to develop its platform through several rounds of private investing.

Alternatives to SoFi Stock

For the moment, there aren’t many publicly traded stocks in the robo-advisory space, but that shouldn’t stop you from looking at opportunities for growing your wealth through shares of today’s biggest disruptors. Examples include Square, Shopify, and PayPal.

If you would like to invest with financial services companies that offer robo-advisory services, consider Fidelity or TD Bank, parent to TD Ameritrade.

When Will SoFi IPO?

In 2019, SoFi’s former CEO said that while an IPO was part of the company’s long-term strategy, there were no immediate plans to offer shares for public trading.

The new CEO, Anthony Noto, has focused on more short-term goals. For example, he has made it clear that the platform will eventually become the number one central financial hub for managing money.

In his statements, there is no indication that an IPO is imminent, but considering the company is moving forward with a wealth of new products, it may just be a matter of time.

The article How To Buy SoFi Stock was originally posted on Investormint

]]>
0
Can You Day Trade On tastyworks? https://investormint.com/investing/brokers/can-you-day-trade-on-tastyworks https://investormint.com/investing/brokers/can-you-day-trade-on-tastyworks#disqus_thread Tue, 13 Oct 2020 14:23:05 +0000 https://investormint.com/?p=13976 Can you day trade on tastyworks? Yes, provided your account balance meets the minimum required threshold for day trading.

The article Can You Day Trade On tastyworks? was originally posted on Investormint

]]>
TASTYWORKS SPOTLIGHT
tastyworks logo

InvestorMint Rating

4.5 out of 5 stars

  • Commissions: All closing trades are commission-free
  • Account Balance Minimum: $0
  • Commissions: $0 flat rate for stocks

via tastyworks secure site

If you are thinking of getting started in day trading, the first step is to get a clear understanding of the process – and the risks.

Next, you need a brokerage account that permits this sort of activity – and not every online service does.

Fortunately, you can day trade on tastyworks, as long as you meet certain eligibility requirements.

What Is Day Trading?

Day trading gets its name based on the fact that investors buy and sell the same securities within the same day.

That’s relatively unusual behavior for other types of investors, who tend to hold shares for weeks, months, or years.

In fact, some of the most successful investors keep the same shares in their portfolios for decades. For example, Warren Buffett has held onto Berkshire Hathway’s Coca Cola stock for more than 30 years, and he says he says he has no plans to sell.

The underlying concept of day trading is the fact that securities move up and down throughout the day, before settling on a closing price.

Sometimes, that movement is very slight, but if timed correctly a large purchase and quick sale (or vice versa) can generate solid profit – particularly when the trade is related to currency or highly liquid stocks.

>> Best Penny Stock Brokers

How To Day Trade Stocks Successfully

Day traders can theoretically practice this strategy in any market, but the activity is most common in stock markets and foreign exchange markets.

Essentially, day traders develop an understanding of what influences certain types of securities, and how that influence translates into intraday ups and downs.

Some factors that are considered include national and international news reports, which are somewhat unpredictable, as well as more predictable scheduled announcements like earnings reports, economic reports, and similar.

The idea is to become attuned to patterns – how the market and individual securities move under a given set of circumstances. For example, share prices often rise in advance of corporate earnings reports, then drop suddenly once the news is made public.

>> Best Warren Buffett Books To Read

How Much Money Do You Need To Day Trade?

The trouble with day trading is that earning real profit requires a relatively large investment.

The movements being exploited during this short window are comparatively small, so buying a few shares only generates a few dollars in profit.

Often, day traders invest a lot of their own cash, as well as large sums borrowed from their brokers – referred to as margin accounts.

can you day trade on tastyworks

A minor miscalculation can lead to dramatic losses of principal, not to mention the borrowed funds.

The risk potential is exceptionally high in day trading, which means it isn’t the right choice for those who are new to investing.

It is also a bad idea to attempt day trading with money you can’t afford to lose.

Given the interest in day trading from those who are new to the market, tastyworks offers a stern warning on the risks. The company says:

  • Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance.
  • You should be prepared to lose all of the funds that you use for day trading.
  • In particular, you should not fund day trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses.

If you are confident that you are ready for day trading, here’s what you need to know.

>> tastyworks vs thinkorswim

Is Pattern Day Trading Legal?

According to FINRA (the Financial Industry Regulatory Authority), the official definition of pattern day trading is when:

  • an investor has four or more same-day trades within five business days, and those day trades are more than six percent of the investor’s total number of trades in the same five business days.

It’s important to note that  individual brokerage firms might have more restrictive definitions, as outlined in their policies and procedures.

This practice is legal, but certain eligibility requirements apply.

>> tastyworks vs Robinhood

What are the Rules for Day Trading?

While individual firms might have their own set of rules and requirements for day traders, two are universal.

They are set by FINRA in an effort to protect inexperienced investors from excessive risk.

  1. Day traders are required to have at least $25,000 in their brokerage accounts.
  2. They are only permitted to trade in margin accounts.

>> Interactive Brokers vs tastyworks

Why Do You Need $25,000 to Day Trade?

The short answer to the question of why you need $25,000 to day trade is this: for your protection.

There is substantial risk in this practice, particularly for inexperienced investors.

The theory is that if you have an account valued at $25,000 or more, it is likely that you have at least some experience in the market.

>> How To Invest $20,000

Can You Day Trade Without $25k?

While you can experiment with an occasional day trade, you can’t make a habit of day trading if your balance is lower than $25,000.

It’s a legal requirement, and brokerage firms are strict about enforcement.

Your ability to trade will be suspended until your balance returns to the required $25,000.

>> Is tastyworks the best trading platform?

Can You Day Trade on tastyworks?

You can day trade on tastyworks, but there is an important point to consider. As a day trader, you are likely to make multiple transactions per day.

You might be responsible for fees or commissions on some or all of your trades, which adds up surprisingly fast. 

It’s true that tastyworks has a relatively low fee and commission structure, but the impact to your profits should be factored in nevertheless.

>> What Are The Different Types Of Stocks?

Can You Trade Stocks on tastyworks?

If you aren’t quite ready for the risks of day trading, don’t worry – you can still get involved in investing.

When you open your tastyworks account, you gain access to a variety of tools and resources that can help you choose specific stocks to trade.

>> How To Buy Impossible Foods Stock

Do Day Traders Make Money?

Day trading is something of a controversial practice, so industry experts and analysts keep a close eye on relevant statistics.

The data show that some investors are able to make money through day trading, but it requires experience, a deep understanding of the market, and undivided attention to unfolding market conditions.

Those who are well qualified can generate as much as 50% or more annually. The key is that when the trade is successful, they earn more than they lose when a trade fails.

It is worth noting that generating a profit through day trading also takes cash. The magic number appears to be around $50,000.

Attempting to day trade with a lower amount doesn’t tend to generate the type of returns one would expect given the effort required.

Investing $50,000 or more certainly doesn’t guarantee success – it’s as easy to lose $50,000 as it is to lose $500,000 – but it does increase the odds of success somewhat for an experienced day trader.

>> How To Buy JM Family Enterprises Stock

The article Can You Day Trade On tastyworks? was originally posted on Investormint

]]>
0
Ellevest Review 2020 https://investormint.com/investing/ellevest-review https://investormint.com/investing/ellevest-review#disqus_thread Sun, 04 Oct 2020 19:59:56 +0000 https://investormint.com/?p=3047 Ellevest is a robo-advisor by women for women. Management fees charged on emergency funds are 0% and financial goal setting is easy.

The article Ellevest Review 2020 was originally posted on Investormint

]]>
Founded by Sallie Krawcheck in partnership with tech entrepreneur, Charlie Kroll, Ellevest has a mission to get women invested in their financial futures and supports them in attaining their financial goals.

Ellevest offers three levels of service:

  • Essential
  • Plus
  • Executive

Ellevest Essential is an automated robo-advisor designed for the hands-off individual who wants Ellevest to manage her money without lifting a finger.

On the other hand, Ellevest Plus and Executive memberships allows for retirement account management, such as Roth and SEP IRAs.

Like most other robo-advisors, Ellevest relies on exchange-traded funds to build diversified portfolios and has substantially lower fees than most human financial advisors. On fees, it also comes up trumps when compared to many of its peers.

Ellevest Spotlight

ELLEVEST SPOTLIGHT
ellevest logo

InvestorMint Rating

4.5 out of 5 stars

  • Ellevest Essential: $1/mo
  • Ellevest Plus: $5/mo
  • Ellevest Executive: $9/mo

via Ellevest secure site

Ellevest Features

Fees $1 – $9 per month
Minimum Investment $0
Tax-loss Harvesting Yes on all taxable accounts
Best For Women
Human Advice YES
Portfolio Rebalancing YES
401(k) Advice YES
Interface Web-based
Customer Support Phone + Email
Automatic Deposits Monthly, Bimonthly & Quarterly

Ellevest Essential Vs Plus Vs Executive

Ellevest offers both a purely automated investment management offering as well as a higher tier of service, Ellevest Executive, for higher net worth clients who prefer human oversight and accessibility.

Essential

Ellevest Essential is a technology-powered robo-advisor designed for the hands-off woman who wants to invest her money in a diversified portfolio of exchange-traded funds at less cost than a traditional financial advisor would charge.

For a low monthly cost of just $1, Ellevest Essential constructs client portfolios using a goals-based approach. For example, you specify financial goals, such as saving for a new home or buying a new car, and Ellevest will examine your timeline, savings, target amount, and capacity for risk to build a customized investment portfolio.

Personalized investment portfolios take into consideration other factors too, including your salary, expected salary growth, and assets in order to make portfolio recommendations.

ellevest review

As you get closer to the target date for your financial goals, portfolio recommendations become increasingly more conservative. This dynamic allocation adjustment over time that factors in a client’s changing capacity for risk raises the bar for all robo-advisors.

During our discussions with the senior team, this dynamic allocation feature was described as roboadvisor 2.0, and we wholeheartedly agree that it is in the best interests of clients to modify risk exposure as time goes by to reflect changing financial circumstances.

Where Ellevest shines also is in providing insight into how likely you are to meet your financial goals. Ellevest displays a 70% likelihood of meeting your financial goals, which compares favorably to the 50% benchmark figure used in the industry, so you enjoy a higher degree of confidence that you will achieve your goals.

Where Ellevest Essential Shines

The perks don’t stop at money management. Essential members have unlimited access to learning workshops, video resources, and email courses from a team of financial planners.

You can also save more easily by electing to participate in a “rounding up” program whereby extra change is deposited into an FDIC insured account.

Members also receive unlimited ATM fee reimbursements.

Perhaps one of the biggest perks is the 20% discount off of one-to-one coaching sessions.

Plus

For members with retirement accounts, Ellevest offers a higher tier of service for a fee of $5 per month.

When you see what you get for this fee, you will realize it is highly competitive when compared to the costs and services provided by other leading robo-advisors.

As you might expect, Ellevest will build a diversified portfolio for you using a combination of the following securities and investment options:

  • Common stocks
  • Preferred stocks
  • Bonds
  • Municipal securities
  • Government securities
  • Mutual funds
  • ETFs
  • Unit investment trusts
  • Hedge funds
  • Alternative products

And like other robo-advisors, Ellevest does not attempt to time the market or make bets on specific assets, sector classes, or individual securities.

But where Ellevest Plus earns brownie points is:

  1. You receive a 30% discount for 1:1 access to Chartered Financial Professionals for personalized guidance on finances and money growth strategies; and
  2. You receive a 30% discount for 1:1 access to Executive Coaches for guidance on salary negotiations and career events.
  3. A personalized investment plan that encompasses all your retirement accounts.

These services distinguish Ellevest from most other robo-advisors because Ellevest emphasizes that men and women have earning trajectories that follow different arcs.

As a company that relies on data about where women’s salaries peak in general, Ellevest can better serve women by customizing financial guidance to their specific needs.

ellevest gender salary differences

While some robo-advisors have a cookie-cutter investment management services that serves men and women equally without factoring differing earnings arcs, which can lead to sub-optimal portfolio allocations and money strategies for women, Ellevest optimizes for an individual’s financial circumstances.

Both women and men can benefit from this deeper insight and more thoughtful approach to serving clients.

Executive

The Executive plan is all about setting goals. Research shows that setting financial goals correlates with a higher rate of achieving them versus those who do not set goals.

The Executive level of membership features all the benefits of the Essential and Plus plans but also includes a focus on goal-based investing for up to six customized accounts.

Ellevest Fees

Ellevest fees are tiered based on the level of service required.

The monthly fee for Ellevest Essential is $1 per month while $5 is charged for Plus and $9 for Executive.

  • Essential: $1 per month
  • Plus: $5 per month
  • Executive: $9 per month

Like most robo-advisors, these management fees are exclusive of fund fees that range from 0.06% to 0.16% annually.

Our research shows that these fund fees are highly competitive, an another reason why Ellevest deserves your serious consideration, whether you are a woman or a man.

Ellevest Investment Method

Ellevest uses low-fee ETFs to build diversified portfolios that are aligned with clients’ financial goals, time horizons and capacity for risk.

Ellevest astutely realizes that risk tolerance may not be the optimal gauge to assess an investor’s risk profile because when markets are rising investors often overestimate their risk tolerances and when markets are falling they underestimate their risk tolerance levels.

Instead, Ellevest focuses on capacity for risk as a better tool to incorporate the timeline of reaching a financial goal.

Upon learning what your risk profile is and having a better holistic understanding of your financial goals and time horizons, Ellevest uses low-fee exchange-traded funds, including many from Vanguard, to build customized, diversified portfolios.

Essential

Model portfolios are used by Ellevest to manage clients’ assets. Ellevest allocates client monies to ETFs and cash equivalents on a discretionary basis using proprietary algorithms.

For each goal you set, Ellevest invests in a portfolio of ETFs using a method influenced by your time horizon, which you can change at any time.

Your accounts are monitored automatically, managed digitally, and rebalanced periodically according to the model strategy.

Rebalancing does carry a tax risk – for example, if winners are sold near year-end, the capital gains taxes may be significant.

Unlike Betterment and Wealthfront, Ellevest does not apply a broad tax-loss harvesting “brush” to all client portfolios.

The team doesn’t believe this is necessarily the best way to optimize for after-tax returns. For more information on the tax strategies employed by its rivals, you can view this tax article.

However, Ellevest doesn’t ignore tax considerations. Quite the contrary, it employs what it calls a Tax Minimization Methodology, which we describe below.

Private Wealth

A primary difference between the basic accounts and Private Wealth accounts at is human oversight. Ellevest personnel monitor client accounts and make portfolio adjustments as necessary but the minimum investment to elect the private wealth management option is $1,000,000 in investable assets.

Think of Ellevest Private Wealth as a more tailored solution to your individual needs, risk profile and financial objectives.

Ellevest builds a globally diversified portfolio that may include:

  • Individual debt instruments
  • Mutual funds
  • ETFs
  • Individual equities
  • Closed-end funds
  • Partnerships
  • Private and illiquid investments

Ellevest will look to apply tax minimization methods, including deferring capital gains and realizing losses when tax benefits outweigh transaction costs.

While investment methods are similar, perhaps the greatest benefit of Ellevest Private Wealth extends beyond your portfolio to factor in your money growth strategies for life.

We were impressed that Ellevest doesn’t just “talk the talk” when it comes to building a financial solution for clients. Because of its insights into how income and spending patterns differ for men and women, Ellevest can help clients to better navigate career hurdles by providing Executive Coaches at no extra charge.

And because clients get 1:1 access to Chartered Financial Professionals, Ellevest has a more holistic overview of your overall financial situation, which means a more personalized and tailored experience.

Ellevest Tools

Ellevest’s stand out tool is its trade-off algorithm which spotlights the cost-benefit analysis when you allocate more to one investment than another.

Ellevest has a nice trade-off tool which gives you insights into the effects of prioritizing one goal over another.

For example, if you are saving up for a new car but set a new goal to go on a fancy vacation abroad, Ellevest will inform you what the impact is to your car-buying goal.

You can view your goals on Mint also if you wish. Simply eSign on the Ellevest dashboard and away you go!

Ellevest Pros and Cons

Ellevest charges competitive fees for both its Essential, Plus and Executive services, provides Chartered Financial Professionals and Executive Coaches, and even has a private wealth management service for higher net worth individuals. 

Ellevest Pros Ellevest Cons
Management Fees: Low fees that range from $1 to $9 monthly depending on membership level. Tax Loss Harvesting: Ellevest views the merits of tax-loss harvsting differently to Betterment and Wealthfront.  While Ellevest does support tax-advantaged investing, it does not provide the granular approach to tax-loss harvesting, called Direct Indexing, offered by Wealthfront.
Emergency Fund Management Fee: No management fees are charged on monies held in emergency funds. This is highly unusual in the money management industry, which generally charges management fees even on cash held. Fewer Account Options: As a comparatively new robo-advisor on the scene, Ellevest caters to fewer account types than some other leading robo-advisors.
Chartered Financial Professionals: Ellevest clients receive discounted 1:1 access to CFPs for personalized guidance on finances and money growth strategies.
Executive Coaches: Ellevest clients also receive discounts to 1:1 access to executive coaches in order to help navigate salary negotiations and career events.
Private Wealth Management: For qualified clients investing $1,000,000 or more, Ellevest provides a private wealth management service that includes value-based investing options.
Financial Goal Setting: Ellevest provides greater specificity and clarity on financial goal-setting than you might find elsewhere.

Instead of investing more generally for the long-term, you get to “bucket” your financial goals so you can specify for example that you are saving for a new home, buying a new car, saving up for a vacation, building an emergency funds cash cushion, preparing for college tuitions, or putting money aside for a wedding.

Trade-off Tool: If you’re on track to meet your financial goals, but must pay for something new, what is the effect on when you will reach your financial goals? Those are the insights you may glean from Ellevest’s trade-off tool.
Gender Focus: Data shows that women’s salaries peak earlier than they do for men. This important income difference has significant effects on investing allocations, which Ellevest recognizes and supports.

Ellevest Minimums

Unlike most traditional advisor who charge management fees on both invested assets and cash, Ellevest stands out by charging no management fees on money held in emergency funds. Overall fees compare well to other robo-advisors.

Category Fees
Account Minimums $0 for Essential, Plus and Executive

$1M for Private Wealth Management

Investment Expense Ratio 0.06% → 0.16%
Annual, Transfer, Closing Fees $100 IRA Transfer Out Fee
Personal Finance Tools Trade-off Goal Setting

Ellevest Accounts

As the new kid on the block, compared to the the likes of Betterment, Wealthfront and Personal Capital, who started almost a decade earlier, Ellevest is playing catch up with the selection of accounts it has on offer.

Type Capability
Taxable Brokerage Account YES
Traditional IRA YES
Roth IRA YES
401(k) YES
403(b) YES

Ellevest Tax Strategy

Some basic tax minimization strategies are included as part of Ellevest’s offering, from deferring capital gains taxes and comparing transaction costs to realizing losses for tax purposes, but Ellevest differs from Betterment and Wealthfront when it comes to providing a “one-size fits all” tax-loss harvesting solution.

The Tax Minimization Methodology employed by Ellevest places tax-inefficient assets in tax-efficient accounts and tax-efficient assets in tax-inefficient accounts.

For example, tax-efficient municipal bonds are placed in taxable accounts while corporate and government bonds are placed in retirement accounts.

Plus, when your accounts need to be rebalanced, Ellevest maximizes your tax losses and minimizes your taxable gains wherever possible.

For specific tax advice, Ellevest encourages clients to consult with tax specialists.

Type Capability
Tax Deferring Gains YES
Tax Loss Benefits Vs Transaction Costs Comparison YES
Tax Minimization Methodology YES
Automated Tax Loss Harvesting NO

Ellevest Review Summary

Top robo-advisors need to look over their shoulder because the new “kid” in town has a lot to offer. Ellevest may be younger than its leading rivals, Betterment and Wealthfront, but what it lacks in age it makes up for in a world class product offering.

Ellevest charges low monthly fees for its membership levels: Essential, Plus, and Executive. Where Ellevest has the edge is its lower account minimum and it goes the extra mile by providing Chartered Financial Professionals and Executive Coaches who help with salary negotiations and career guidance.

Another standout feature at Ellevest is its gender focus. By recognizing that men and women experience salary peaks at different points in their respective careers, Ellevest constructs portfolios that are tailored to client needs. Plus, portfolio allocations dynamically adapt as clients get older to account for modified capacities for risk.

Ellevest considers tax impact in its service offerings and automatically rebalances portfolios as you might expect of any leading robo-advisor.

The bottom line is whether you are a woman or a man, you will need to go a long way before finding a robo-advisor that beats Ellevest.

The article Ellevest Review 2020 was originally posted on Investormint

]]>
0
tastyworks vs Robinhood Review https://investormint.com/investing/tastyworks-vs-robinhood https://investormint.com/investing/tastyworks-vs-robinhood#disqus_thread Sun, 04 Oct 2020 16:32:11 +0000 https://investormint.com/?p=8435 Robinhood charges no commissions when placing stock, options, or cryptocurrency orders. tastyworks charges no commissions to close stock and options trades, and supports many more options trading strategies than does Robinhood.

The article tastyworks vs Robinhood Review was originally posted on Investormint

]]>
The Robinhood free stock trading platform is famous. When it first launched, few believed it would be so disruptive. Since then, most other leading brokers have slashed their own commissions to zero on stock trades.

Among them was tastyworks, which has rapidly earned a reputation as a top options broker by charging no commissions on closing stock and options trades.

Compared to the best brokers in the industry, Robinhood and tastyworks stand out because of the social components built into their platforms.

Unlike their old-school competitors, the new crop of brokers recognize that traders enjoy connecting with each other, sharing ideas, and learning from successful investors.

And while both brokers are similar in some areas, they target very different types of traders, so between Robinhood vs tastyworks, which is right for you?

Robinhood vs tastyworks

robinhood logo
tastyworks logo

Is Robinhood Free Stock Trading Legit?

Robinhood shot to fame by lowering the cost of trading stocks to zero. Skeptics didn’t think the low cost would attract younger traders – its target audience. But they were wrong. In the panic of 2020, Robinhood became the “go-to” platform for retail traders.

But you might be wondering, how can Robinhood stay in business when charging no commissions?

How Does Robinhood Make Money?

What users may not know is that Robinhood sells customer order data to market makers.

Market makers pay brokers to process transactions. On each transaction you make on the Robinhood app, the broker is paid. So, while you the customer does not pay a commission, make no mistake that Robinhood is pleased when you trade more frequently.

As a free stock market trading broker, Robinhood lives up to its promise but it also features a premium service, called Robinhood Gold. If you want access to margin, you must pay.

This is a controversial feature because it essentially encourages leverage, and therefore more risky trading behavior.

And lastly, cash sitting in your brokerage account earns money for Robinhood because it is loaned out, albeit at pretty low interest rates of interest these days.

tastyworks vs robinhood

tastyworks Inc Review Snapshot

While fee-conscious stock traders will find Robinhood hard to beat, savvy options traders will find tastyworks to be virtually unparalleled.

tastyworks was founded by traders for traders. Whether you trade stocks, options, or futures, tastyworks can deliver a platform with lightning fast executions and rock bottom commissions costs.

Beyond low pricing, tastyworks shines with numerous social trading features. If you ever wished you could follow other traders, wish no more!

tastyworks browser follow

Simply click a featured trader’s profile to view a stream of their previously executed trades.

Another nice feature is the stock Grid, which provides a view of which stocks are trading higher and lower on the day.

When you select a particular stock, an options chain pops up so you can easily place trades quickly.

The tastyworks platform is designed for active stock, options, and futures traders while Robinhood is ideal for fee-conscious traders who want to pay no commissions on stock and cryptocurrency trades.

Robinhood vs tastyworks: Commissions

Commissions and fees on the tastyworks platform are very reasonable compared to most other brokers.

tastyworks is the better bet if you wish to place options trades or futures trades regularly.

Options Opening Trade Stock Opening Trade Futures Opening Trade All Closing Trades
$1.00
(per contract)
$0.00
(unlimited shares)
$2.50
(per contract)
$0.00
(clearing fees apply)

While Robinhood has no commissions on stock trades, it is by no means markets itself as a specialist options trading platform.

In fact, Robinhood for a long time didn’t even support market orders for options trades due to their lower liquidity levels whereas this is no issue at tastyworks.

If options and futures trading is not your thing, but trading stocks and cryptocurrencies is, then Robinhood is a better match.

Options Trades Stock Trades Cryptocurrencies Robinhood Gold
$0
(clearing fees may apply)
$0
(clearing fees may apply)
$0
(clearing fees may apply)
$10+
(per month depending on tier)

Margin trading is available at both tastyworks at Robinhood.

tastyworks follows the more conventional approach of charging interest on margin funds, which essentially is money loaned to you.

Robinhood also loans money on margin but charges a fixed monthly fee depending on how much margin you need. You will need to upgrade to Robinhood Gold to be approved for margin.

tastyworks vs Robinhood
Options Strategies

Robinhood supports very few options trading strategies. Only the purchase of long calls and long puts, covered calls, and cash-covered puts is available.

By comparison, it’s hard to imagine an options strategy not available at tastyworks.

Whether basic options strategies like married puts, bear call spreads, and bull put spreads, or more complex ones like iron butterflies and ratio backspreads, tastyworks caters to them all.

TastyWorks Options Strategies Robinhood Options Strategies
  • Bear Put
  • Bull Put
  • Bear Call
  • Straddle
  • Strangle
  • Ratio Put Backspread
  • Ratio Call Backspread
  • Ratio Put Spread
  • Ratio Call Spread
  • Iron Butterfly
  • Iron Condor
  • Combination Strategies
  • (and many more)
  • Long calls and Long Puts
  • Covered Calls
  • Cash Secured Puts

tastyworks vs Robinhood Tools

Robinhood makes it easy to buy and sell but where it shines in simplicity it falls short in research capability.

While you can view your portfolio holdings and the prices at which stocks are trading easily, Robinhood doesn’t provide screeners or tools of any significance really to help you scout for new ideas.

By contrast, tastyworks is built with the idea of helping you to find new trading opportunities using the Portfolio, Analyze, and Trade tabs.

tastyworks browser monitor display

On the web-based dashboard, you can Follow stock market trade ideas from experts.

Even experienced traders should find this discovery tool helpful in uncovering new trading ideas.

tastyworks trader view

Not sure about a trading strategy? Test out your own ideas using the Analyze tab on the dashboard.

Rather than risk your own money, check the gain vs loss risk profile of the trade during the expiration cycle.

The visual display will highlight all the relevant calculations, fees, and timelines so you are left in no doubt how your position will change in value at different price and time points.

tastyworks browser order display

The Correlation Matrix is another diamond under the hood of the tastyworks dashboard.

Want to know how much Facebook stock fell when Alphabet share price fell? The Correlation Matrix shows you instantly.

tastyworks browser insights display

Pro Tip: For experienced traders who want even more tools, compare tastyworks vs thinkorswim.

thinkorswim has feature-rich charts that display over 300 technical studies, Fast Beta (an embedded programming language), Strategy Roller to automate covered call roll forwards, and lots of screening and scanning tools.

tastyworks vs Robinhood

Overall Winner

During our research for this article, we discovered a Robinhood vs tastyworks Reddit comment which boldly stated “Give me tastyworks, or give me death!” – a reference to Patrick Henry’s 1775 speech “Give me liberty or give me death!

With so much to offer, it is obvious why tastyworks has built such a loyal following. But Robinhood has its merits, especially for cryptocurrency traders and stock traders who care more about price than research capability.

tastyworks Wins Robinhood Wins
Active Options & Futures Traders: tastyworks caters to all options and futures strategies, whereas Robinhood supports just a few basic ones. If you are an active and serious options or futures trader, tastyworks is your best bet. Commissions and Fees: You can’t beat zero commissions for stock, options, and cryptocurrency trades. This is where Robinhood scores most points.
Order Types: Robinhood does not support market orders for options trades so if you want fast execution, you will need to stick with tastyworks. Cryptocurrency Trading: tastyworks does not support crypto trading, so if buying Bitcoin and Ether is of interest to you, Robinhood wins.
Tools and Research: tastyworks has an abundance of tools to help you find new trading ideas, follow expert traders, analyze new trades, and even correlate the movement of stock prices with the prices of other securities. Robinhood by comparison has very few tools. Intuitive Platform: Robinhood is designed for traders who want to buy stocks easily. As a result, the platform is easy to use and quite intuitive. The tastyworks platform will take more time to learn due to all the features under the hood.
Live Financial News Network: The tastytrade financial news network is available free all day to tastyworks users. Financial experts feature throughout the trading day and discuss strategies, market movements, and hot topics to help you improve your trading skills and stay informed.

Which Trading Platform Is Best: Robinhood or tastyworks?

Robinhood and tastyworks are not so much two peas in a pod as they are apples and oranges.

Traders who value price the most will be better suited at Robinhood, which provides free stock, options, and cryptocurrency trading.

For active options and futures traders, tastyworks is the better choice because it caters to just about every trading strategy imaginable whereas Robinhood supports just a handful of basic strategies.

For users who want a simple, intuitive trading experience where they can enter their information at the Robinhood login area, place a trade on the go and move on, Robinhood is better with a more intuitive user experience.

However, tastyworks has screeners, tools, and a social layer under the hood which makes it much more powerful when it comes to research capability and finding new trading ideas.

Ultimately the choice boils down to your financial goals. Want a quick, cheap trading experience without the frills, Robinhood is for you. But if you need a powerful trading platform designed by traders for traders then tastyworks will cater to your needs best.

 

The article tastyworks vs Robinhood Review was originally posted on Investormint

]]>
0
How To Invest $20k https://investormint.com/investing/how-to-invest-20k https://investormint.com/investing/how-to-invest-20k#disqus_thread Sun, 04 Oct 2020 16:22:27 +0000 https://investormint.com/?p=8873 Here are ways to invest $20k. 1. Buy dividend-paying stocks. 2. Invest in mutual funds via a robo-advisor. 3. Gain exposure to property with crowdfunding sites. 4. Loan money on peer-to-peer platforms.

The article How To Invest $20k was originally posted on Investormint

]]>
Whether you squirreled away money, won the lottery, or received a bonus at work, you might now be wondering how to invest $20k to generate the best return on your money.

The good news is you are spoilt for choice because of the many ways to invest $20,000. From stocks and bonds to real estate crowdfunding sites and peer-to-peer lending platforms, the options for investors are almost endless these days.

Here, we break down the best ways to invest wisely.

How To Invest $20k In Stocks

Tempting as it might be to bet your $20,000 on penny stocks, a smarter choice is to follow in the footsteps of Warren Buffett, who amassed billions by investing wisely.

His secret sauce boiled down to buying companies with sustainable competitive advantages. These are companies that have dominant market shares, pricing power, and predictable cash flow streams.

Generally they also pay a regular dividend, such as Coca Cola. Even a great company like Alphabet may not make the cut in his Berkshire Hathaway portfolio because it doesn’t pay dividends.

Instead he prefers solid companies that have stood the test of time and pay out generous dividends. Kraft Heinz, and Coca Cola are among his favorite long-term holdings. More recently, he took the plunge into the technology sector by buying Apple, and it’s been a runaway success so far.

Although the investing strategy may seem boring, Professor Jeremy Siegel’s research in his book Stocks For the Long Run revealed that the total stock market returns through most of last century were overwhelmingly due to reinvested dividends.

As alluring as high flying stocks, like Netflix, can be at times, the reality is they can crash just as quickly, leaving traders with nothing but heartache and losses.

To get started buying dividend-paying stocks, open a trading account at a top online broker like tastyworks or thinkorswim, where commissions are low, support staff are excellent, executions are fast, and the trading platforms are robust.

TASTYWORKS SPOTLIGHT
tastyworks logo

InvestorMint Rating

4.5 out of 5 stars

  • Commissions: All closing trades are commission-free
  • Account Balance Minimum: $0
  • Commissions: $0 flat rate for stocks

via tastyworks secure site

How To Invest $20,000 In Mutual Funds

If the idea of stock picking and managing your own portfolio scares you, a diversified portfolio may be a better fit.

Specifically, a robo-advisor could be a perfect match for you and offers the potential to spread your eggs across a wide variety of industries and sectors.

Robo-advisors are a new breed of financial advisor. They leverage technology and computer algorithms to automatically invest your money based on your age, risk preferences, financial goals, and other factors.

Betterment leads the pack of robo-advisors. All the bells and whistles you might hope for are packed into the Betterment website. Investors who want a purely automated solution can choose Betterment Digital, which costs 0.25% in annual fees.

how to invest 20k

That means if you invest $20,000 you will pay just $50 per year for a top roboadvisor who will invest your money in mutual funds or index funds. Or if you want access to a team of Chartered Financial Professionals via Betterment Premium, the fee is 0.40%, which would amount to $80 for the year.

Betterment pays special attention to the tax impact of investing in order to make sure you get the most bang for your buck. Through various strategies like tax-loss harvesting and tax-coordinated portfolios, Betterment claims annual returns can increase by as much as 2.66%.

BETTERMENT SPOTLIGHT
betterment

InvestorMint Rating

5 out of 5 stars

  • Promo: Up to 1 Year Free Management
  • Management Fee: 0.25% – 0.40%
  • Account Minimum (Betterment Digital): $0
  • Account Minimum (Betterment Premium): $100,000

via Betterment secure site

Another roboadvisor worth checking out is Ellevest, which is unique in the way it segments men vs women.

Women tend to reach their peak earning age younger than men. And because women tend to live longer than men, they need to be savvy about how to invest money over a longer time span as their income declines.

Ellevest understands these very real differences between men and women, and invests clients’ monies accordingly.

How To Invest $20k In Real Estate

Real estate has been a solid investment over any long term period during the last century. But how do you invest $20k in real estate without buying property yourself?

Fortunately, real estate crowdfunding sites have sprung up to help investors pool money to buy properties that would otherwise be unaffordable to any single investor.

No longer do you need to do the hard work of applying for a bank loan, finding a tenant, and maintaining a property. Instead, companies like Fundrise and Rich Uncles do the heavy lifting.

With as little as $500 → $1,000 you get exposure to real estate from the comfort of your living room.

Rich Uncles specializes in commercial real estate and student housing. Brand name tenants like Chevron and Dollar General rent out Rich Uncles commercial properties while occupancy rates in student housing are predictably high from one year to the next.

Fundrise features private real estate investment trusts that operate much like publicly traded REITs, albeit with a dashboard that allows you to track your investments 24/7.

It also offers an eFund, which buys and develops land that is sold to residential homeowners.

FUNDRISE SPOTLIGHT

fundrise logo

InvestorMint Rating

4.5 out of 5 stars

  • Minimum Investment: $500
  • Returns: 11.44% (net of fees)

via Fundrise secure site

If you prefer to invest $20k in property that you own yourself, Roofstock is your best bet. Its model is so successful that it raised $50 million to expand.

Roofstock rates neighborhoods, finds homes to buy that are already rented, connects you to local property managers, and even lets you buy properties online with a few mouse clicks!

Gone are the days when you needed to trek around neighborhoods for property deals!

Invest $20,000 In P2P Lending
For Higher Returns

Peer-to-peer lending is a way to invest $20,000 without relying on the stock market or real estate to generate returns.

The way it works on leading peer-to-peer lending platform, Prosper, is that you loan money to a borrower for a fixed period of time at a specific interest rate.

Prosper vets borrowers and assigns them to risk categories so you know ahead of time how risky similar borrowers are when it comes to paying back their principal and interest.

You can choose to loan money to a dentist who may be consolidating credit card debt to a lower rate or to a doctor who may be refurbishing a home for example.

If you were to loan out $20,000 to a few dozen borrowers you could spread your risk and maybe earn a handsome yield that would beat bank savings rates.

PROSPER SPOTLIGHT

prosper logo

InvestorMint Rating

4 out of 5 stars

 

  • Min Credit Score: 640
  • APR Rate: 6.95% – 35.99%
  • Origination Fee: 2.4% – 5%

via Prosper secure site

What other ways to invest $20k do you know that we should include in this article? We would love to hear from you.

>> What Is The Best Way To Invest $10,000?

>> How Much Should You Save For Retirement?

>> Saving Vs Investing Money: How Do You Decide?

 

The article How To Invest $20k was originally posted on Investormint

]]>
0
Can You Buy Stocks On Betterment? https://investormint.com/investing/robo-advisors/can-you-buy-stocks-on-betterment https://investormint.com/investing/robo-advisors/can-you-buy-stocks-on-betterment#disqus_thread Sun, 04 Oct 2020 16:15:35 +0000 https://investormint.com/?p=13942 Betterment is a roboadvisor, not a self-directed broker, so you cannot buy stocks on Betterment.

The article Can You Buy Stocks On Betterment? was originally posted on Investormint

]]>
BETTERMENT SPOTLIGHT
betterment

InvestorMint Rating

5 out of 5 stars

  • Promo: Up to 1 Year Free Management
  • Management Fee: 0.25% – 0.40%
  • Account Minimum (Betterment Digital): $0
  • Account Minimum (Betterment Premium): $100,000

via Betterment secure site

Not long ago, there was a sharp divide between those who could invest in the stock market with the help of a financial advisor and those who were left to fend for themselves.

Professional financial advice of any sort was simply not affordable for people with average income and assets.

All of that changed when Betterment launched the first true automated investment advisor.

Also known as a robo-advisor, Betterment created algorithms capable of offering customized investment advice at minimal cost.

This transformed the industry, making it possible for almost anyone to enter the market regardless of their portfolio size – but some potential investors are still doubtful.

Can an algorithm really provide smart guidance on money management?

Betterment Puts Investing
On Auto-Pilot

Managing money is not for the faint of heart. Whether you have a little or a lot, it is easy to get overwhelmed with all of the decisions that need to be made.

Should you open a money market account or a brokerage account? Should you buy stocks or Exchange Traded Funds (ETFs)? And which ones?

Are you setting enough of your income aside? How much risk is too much? Most importantly, are you going to be able to meet your financial goals?

Answering these questions based on your unique financial situation is Betterment’s specialty – and believe it or not, it’s all done through an automated service.

grow your investment

You start by completing your profile and setting financial goals, then the system suggests how much you should save and ensures your money is invested in a manner that is most likely to get you where you want to go.

Betterment accounts are best for those who are more of a set-it-and-forget-it sort. The process is fully automated, so you don’t have to make any day-to-day decisions. 

The service is most popular among beginner investors, those who prefer a hands-off approach, and those who are starting with relatively low balances.

It is also a favorite among investors who are focused on their retirement savings, as well as those who want to achieve other specific financial goals, because a long list of tools and educational resources are included with every account.

>> Betterment vs Robinhood

How Does Betterment Work?

Betterment account holders choose one of two options, depending on the size of their balance and how important they consider the ability to access live Certified Financial Planners.

The basic Betterment Digital service has no minimum balance requirement. Management fees come to 0.25% of the total account balance, so those with less in the way of assets pay less in real dollars than peers with a bit more in their Betterment accounts.

Investors with $100,000 or more under management with Betterment can access the Betterment Premium service. 

This is a bit more costly at 0.40% of total assets under management, but it comes with extra benefits like unlimited phone access to Certified Financial Planners.

>> Betterment Safety Net Fund Review

Can You Buy Stocks On Betterment?

Some investors are surprised to hear that they cannot buy stocks on Betterment. After all, brokers like Schwab make it possible for average people to buy shares of top-notch companies.

Betterment takes a different approach – one that tends to offer better returns over time when compared to self-directed investment accounts.

A team of experts looks at a wide selection of domestic and international Exchange Traded Funds (ETFs).

The top contenders are rated based on a number of criteria, including the associated expense, then your money is invested in the best of the bunch.

The advantage? Automatic diversification.

With ETFs, your assets are spread among multiple industries – and several companies within those industries – to ensure you don’t make the mistake of keeping all of your eggs in one basket. 

With that said, how your money is invested and which ETFs you hold in your portfolio will be different from the selections made for other Betterment clients.

Your portfolio is customized to meet your personal financial goals in a timely manner, and you can make certain choices based on what is most important to you.

For example, Betterment has a socially responsible investment strategy available, as well as one that is focused on generating income. If you are trying to reach several goals with differing end dates, you can create a multi-strategy portfolio that meets those needs.

Your benefits don’t end with investment selection. Betterment also handles on-going maintenance that is critical to maximizing your returns. Examples include tax loss harvesting to minimize your tax bill, as well as tasks like automatic rebalancing, reinvesting dividends, and so forth.

That alone is well-worth the 0.25% fee, considering the amount of time it takes to complete these transactions properly.

>> Acorns Vs Betterment Comparison

Can You Make Money With Betterment?

Betterment’s mission statement says it all in terms of whether you can make money through the service.

In short, the company’s mission is “to empower people to do what’s best for their money so they can live better.

Certainly, that mission statement is no guarantee of specific returns, but the goal is clear.

If you leave your money in the hands of your Betterment robo-advisor, you can count on making the most of whatever opportunities the market offers.

>> Compare Betterment Vs DIY

Can Betterment Make You Rich?

Some investors want to know that they can count on specific returns – the sort of returns that will take them from getting by to getting rich.

They want Betterment to get them in on the ground floor of the next Apple, Microsoft, or Amazon, so that ten years from now, they can live the high life.

Alas, Betterment doesn’t work quite that way. In fact, no advisor, automated or otherwise, can promise riches.

The stock market is unpredictable and Betterment aims to intelligently build diversified portfolios.

Certainly, there are some who have made fortunes through their stock picks. Warren Buffett is one of the most famous, but even he doesn’t have a magic formula – proof of that is his underperformance compared to the S&P 500 in the second decade of the millennium.

Instead, he chooses solid companies with dominant market shares and top-notch brands that can afford to pay out impressive dividends. Then he buys and holds his shares for decades to achieve his impressive results.

So, can Betterment make you rich? Perhaps, but that depends on you as much as your Betterment account.

If you want to generate long-term gains, take a disciplined approach to adding funds to your portfolio, and resist the temptation to cash out, regardless of circumstances.

Historically, the stock market has always grown given enough time, and Betterment will ensure that you are in the best possible position to benefit from any gains.

>> Betterment Vs S&P 500 Comparison

Can You Lose Money on Betterment?

No one wants to lose their hard-earned money, but unfortunately that’s a risk whenever you invest.

Whether you choose Betterment or another robo-advisor firm, or a personal investment advisor, there is always a chance that unforeseen events will erase profits – and possibly eat into your principal balance.

Some would-be investors aren’t comfortable with any risk at all. They choose to skip the markets in favor of the guaranteed returns available from traditional banking products like money market accounts and Certificates of Deposit (CD).

The problem with such a strategy is that you aren’t truly eliminating risk. You are simply exchanging investment risk for other types of risk.

One of the biggest issues that comes with guaranteed interest is that those interest rates are shockingly low. They are so low, in fact, that while you won’t technically lose principal, you won’t earn enough to offset inflation.

By the time you withdraw from your account, your original deposit will be intact. However, it will be worth less in real buying power than it was when you first opened your account.

The only way to mitigate this type of risk is to generate returns that are higher than the rate of inflation. Generally speaking, that’s only possible through a well-managed investment portfolio.

Yes, you might see some dips in your balance, but that’s part of the process. If you remain patient, you are more likely than not to recover your losses and then some when your portfolio is properly managed.

>> Betterment vs Schwab Intelligent Portfolios

Will Betterment Survive?

When the market is volatile, many start to question whether robo-advisors like Betterment can survive. After all, these companies depend on average investors to make their profits, and average investors are less able to set money aside during economic downturns.

There are some naysayers who are convinced that robo-advisors can’t survive certain market conditions, but that’s a minority opinion.

Most experts believe that self-directed investors who lose big during a market crisis are more likely to switch to services like Betterment. The low cost expert management is awfully appealing when things have gone terribly wrong.

The bottom line is that Betterment is a solid choice for investors who want to enjoy the benefits of entering the stock market without all of the effort. A Betterment account offers high-quality management for a low cost, with little or no time commitment.

>> Prosper vs Betterment Comparison

The article Can You Buy Stocks On Betterment? was originally posted on Investormint

]]>
0
SoFi Automated Investing Review https://investormint.com/investing/robo-advisors/sofi-automated-investing-review https://investormint.com/investing/robo-advisors/sofi-automated-investing-review#disqus_thread Tue, 29 Sep 2020 09:56:50 +0000 https://investormint.com/?p=13934 SoFi Automated Investing review rates the company highly thanks to 0% management fees and no minimum balance requirements.

The article SoFi Automated Investing Review was originally posted on Investormint

]]>
SOFI SPOTLIGHT
sofi logo 2019

InvestorMint Rating

5 out of 5 stars

  • Management Fees: 0.0% of assets invested
  • Account Balance Minimum: $100

Do you already have a student loan with SoFi? If so, you’re probably over the moon with the company’s customer service. Its reputation is stellar – a rarity among financial institutions. And SoFi’s Facebook group is chirping with satisfied customers. So you might be thinking what all the fuss is about with SoFi Automated Investing?

Or maybe this is your first time stumbling across SoFi and you’re keen to get started investing but without paying a fortune to a financial advisor? You’re in the right place.

SoFi Automated Investing allows you to put your stock market portfolio on auto-pilot. Yet it’s much more than that. Unlike most traditional financial advisors and other robo-advisors, SoFi won’t ding you with management charges.

Intrigued already? That’s just the beginning. In this SoFi Automated Investing review, we’ll show you so many perks of the product that you may decide this is the only investment option for your hard-earning savings.

Robo-Advisors 101: A Quick Primer

Once upon a time, you had to be quite wealthy to trade stocks. A typical order was 100 shares, and you were expected to have cash to cover the entire purchase. On top of that, you were responsible for an array of commissions and fees each time you made a trade.

All of that changed with the digital revolution and the subsequent introduction of robo-advisors – a class of automated investing platforms that make it possible for virtually anyone to gain exposure to the stock market in a hands-off manner.

But how is it possible for robo-advisors to make recommendations without a human touch?

The answer comes down to carefully constructed algorithms. These systems rely on algorithms combined with personal details supplied by clients to develop portfolio suggestions.

Robo-advisors might be best-known for their low and no-fee account options. Users pay a fraction of the cost of a financial advisor, and most have low or no minimum balance requirements. 

Investors that find themselves in need of personal investment advice can subscribe to costlier premium account services.

SoFi has taken the robo-advisor model and added premium services without premium fees. The biggest advantage SoFi investors enjoy is unlimited access to live financial advisors completely free of charge.

Of course, that’s not the only feature to consider when choosing a roboadvisor. This comprehensive SoFi automated investing review offers an in-depth look at the pros and cons of opening an account.

Pros and Cons of
SoFi Automated Investing

The primary features to look for when choosing a robo-advisor include low or no-fee account options, a minimum balance requirement that meets your needs, a simple, user-friendly interface, goal planning tools, educational resources, a selection of investment options, and exceptional customer service.

SoFi does well on all of the above.

Pros Cons
Minimum Balance Requirement: SoFi boasts that you can start investing with just $1. Limited Account Support: Individual and joint accounts as well as IRAs: Roth, SEP and Traditional
Fees: None. Managed accounts have a 0% charge. Tools: Compared to Betterment, SoFi lacks an extensive suite of tools but does offer portfolio and wealth projection tools.
User-Friendly Interface: SoFi can be accessed online, but most choose to manage their accounts through the mobile app. User reviews are positive in terms of platform intuitiveness, reliability, and overall quality of the technology. Investment Strategies: Up to ten strategies available which should be sufficient for most investors, though some leading competitors such as M1 Finance offer even more flexibility.
Goal Planning Tools: SoFi has a number of features dedicated to goal planning. You can offer information on particular goals that are high priority, such as a wedding, home purchase, or retirement. Tax Loss Harvesting: SoFi has no tax-loss harvesting option. This could put you at risk for higher tax liability on any returns you earn, so if your primary concern is reducing your tax bill, this might not be the best option for you.
Exceptional Customer Service: Customer service and technical support are open for extended hours seven days a week, and users have nothing but good things to say about their courtesy, professionalism, and expertise. That’s a plus when dealing with unfamiliar systems and software. New To The Game: SoFi is one of the newer robo-advisors. The larger company was founded in 2011, but this service was just launched in 2017. Compare that to others like Wealthfront (founded 2008), Betterment (founded 2008), and E-Trade (founded 1982). Clearly, SoFi has a limited history, which gives investors less information on SoFi’s ability to deliver on its value proposition.
Educational Resources: The SoFi education hub is called Investing 101, but it has a surprising range of resources that appeal to beginners and experts alike. Those new to the stock market or interested in learning more about assets like cryptocurrency can find in-depth discussion and advice from experienced consultants.
Human Advice: It is one of the only robo-advisors that offers free, unlimited access by phone to Certified Financial Planners.
Members-only Perks: Career planning services, discounts on additional products and services, no-cost estate planning, and referral bonuses.
Automatic Rebalancing: If you choose the automated account management option, you can set it up and ignore it almost indefinitely. The system handles funding, diversification, and rebalancing based on your settings.
Recommendations Engine: Develop a strategy based on time-specific categories like short-term (up to three years), medium-term (three to ten years), medium-long-term (ten to twenty years), and long-term (twenty-plus years). The automated system offers recommendations to support achievement of your goals.

Is SoFi Automated Investing
Right for You?

While anyone can benefit from reducing or eliminating fees, SoFi isn’t right for everyone.

The service is primarily intended for those just starting out with investing, those who prefer a hands-off or self-directed approach, those who want the support of Certified Financial Planners without paying premium prices, and those who don’t yet have a large amount to invest.

SoFi’s member benefits are designed with younger investors in mind. For example, career coaching, student loan interest discounts, and financial planning for education tends to interest people under the age of 30.

With that said, the service has plenty of members who have finished their education and are well-established in their careers, so if the other features are appealing, SoFi might be the right choice for you.

Is SoFi Safe?

SoFi Securities LLC is a FINRA registered broker dealer, and your account is a brokerage account. That means it is possible for your investments to lose value. However, your assets are insured if the company fails.

Bank accounts are insured by the FDIC, but your SoFi brokerage account is insured by the SIPC. You can recover up to $500,000 in securities or $250,000 in cash if something goes terribly wrong.

With that said, broker dealers are held to the same high standards as other financial institutions, and SoFi takes that responsibility seriously. You can count on state-of-the-art cybersecurity, as well as tools and resources intended to support you in reaching your financial goals.

How To Open A SoFi Automated Investing Account

To open your account, begin by downloading the app and completing a brief application.

The application is also available online at SoFi’s website. You will be asked to supply basic personal details such as your social security number and date of birth, and you may be asked to submit documents verifying your identity.

Once your account is open, you can fund it electronically from an existing account with another financial institution. 

It usually takes a day or two for your funds to be available for investing, but in the meantime, you may qualify for immediate access to as much as $5,000 while you wait for your deposit to clear.

While you wait, you can make plans for how you will use your account. The first question is whether you will choose your own trades or allow the automated service to handle your portfolio (the focus of this review).

If you choose the self-directed route, take advantage of the educational resources available on the site. These offer critical information on building a strategy that makes sense based on your financial goals and your investment preferences.

You won’t pay any fees for trading stocks and ETFs. If you want to buy shares that are priced out of your budget, SoFi permits fractional share purchases on certain stocks.

How SoFi Compares to Alternative Robo-Advisors

SoFi might not have all the features of its biggest competitors, but members tend to agree that SoFi comes through where it counts. Consider the pros and cons of investing with industry leaders like Betterment and Wealthfront.

BETTERMENT SPOTLIGHT
betterment

InvestorMint Rating

5 out of 5 stars

  • Promo: Up to 1 Year Free Management
  • Management Fee: 0.25% – 0.40%
  • Account Minimum (Betterment Digital): $0
  • Account Minimum (Betterment Premium): $100,000

via Betterment secure site

Betterment is widely considered the first true robo-advisor firm. It was founded in 2008 and started opening investor accounts in 2010. It is the largest independent automated advisor, and it offers a wide range of investment options, goal-based tools, and educational resources.

Like SoFi, Betterment allows investors to purchase fractional shares, and it has no minimum balance requirement. However, it does charge a 0.25% management fee, which can be waived for one year with a qualified initial deposit. For some, that’s a deal-breaker.

Wealthfront, on the other hand, is intended for an entirely different class of investors. Though it is also a robo-advisor, it doesn’t compete for the same clientele as SoFi. Wealthfront does not permit fractional shares and has a minimum balance requirement of $500.

Wealthfront charges a 0.25% management fee that is waived for the first $5,000 in assets. The biggest feature that Wealthfront offers – and SoFi does not – is daily tax-loss harvesting. For investors that see large gains from large investments, this feature can mean significant tax savings.

SoFi Automated Investing
Review Summary

The bottom line is that those who are beginning to explore the world of investing and those who don’t have a large amount to invest can realize important benefits from opening their accounts with SoFi.

In addition to the tools and educational resources the service offers, less experienced investors have the opportunity to consult with a Certified Financial Planner as needed.

More importantly, SoFi makes investing in the stock market accessible regardless of wealth through its zero fee, no minimum balance structure, the ability to purchase fractional shares, and low-expense investment options like ETFs.

The article SoFi Automated Investing Review was originally posted on Investormint

]]>
0
PowerShares QQQ vs VGT https://investormint.com/investing/powershares-qqq-vs-vgt https://investormint.com/investing/powershares-qqq-vs-vgt#disqus_thread Tue, 22 Sep 2020 14:06:47 +0000 https://investormint.com/?p=13928 QQQ vs VGT: QQQ is a bet on the NASDAQ 100, the top technology stocks while VGT tracks a smaller cohort of companies in the same sector.

The article PowerShares QQQ vs VGT was originally posted on Investormint

]]>
Exchange-traded funds (ETFs) are an easy way to diversify your investments in a market segment or group of stocks instead of depending on one company.

This investment tool allows you to benefit from high-priced stocks that may otherwise be out of your price range. It also helps you mitigate risk by participating in an advanced trading strategy that may otherwise be inaccessible, either through lack of finances or information.

Two popular ETFs are Vanguard Information Technology (NYSEARCA:VGT) and PowerShares QQQ although you may not know the differences in what they actually do. This is your guide to comparing QQQ vs VGT and determining which one you should invest in.

Let’s start by explaining what each fund comprises, starting with QQQ.

What Is PowerShares QQQ

There are several ways to invest in QQQ, which can be a bit confusing to the average investor.

This includes the QQQ stock symbol, ProShares TR/Ultrashort QQQ ETF (NYSEARCA:QID), ProShares TR/UltraPro Short QQQ (NASDAQ:SQQQ), ProShares TR/UltraPro QQQ (NASDAQ:TQQQ), and to a lesser extent Invesco Ltd. (NYSE:IVZ), the investment management company running the fund.

These are ways to bet on or against the Nasdaq 100 index, a group of 100 actively traded non-financial stocks. In some cases you gain exposure

QQQ comprises companies across sectors like technology, healthcare, retail, and more.

Each company is weighted to keep members with different market capitalizations balanced. To qualify, a company needs to be listed on the Nasdaq exchange for at least two years with an average daily trading volume over 200,000, along with releasing quarterly and annual reports.

Companies are disqualified for issues such as filing bankruptcy and must be listed exclusively on Nasdaq.

Notable companies in the Nasdaq 100 include

  • Apple Inc. (NASDAQ:AAPL)
  • Amazon.com, Inc. (NASDAQ:AMZN)
  • NVIDIA Corporation (NASDAQ:NVDA)
  • Facebook, Inc. Common Stock (NASDAQ:FB)
  • Tesla Inc (NASDAQ:TSLA)
  • PayPal, Holdings Inc (NASDAQ:PYPL)
  • Comcast Corporation (NASDAQ: CMCSA)

Technology companies account for a large portion of the QQQ index, at over 60 percent of the fund. The QQQ ETF has over $125 billion in assets under management, and it’s a cost-efficient exposure to a broad range of companies.

powershares qqq vs vgt

The QID fund goes a step further, doubling your exposure via a series of futures and swaps. If the QQQ falls, QID corresponds to 2x the inverse movement – so you can make money as the broader market declines.

SQQQ and TQQ kick it up another notch by seeking triple daily returns through two separate and riskier strategies.

At the root of each ETF, however, is the Nasdaq 100. The long-term oriented investor is best served buying QQQ as it exposes them to long-term stock market gains in the technology sector while traders who aim to profit from shorter term dips in price can look to the QID or SQQQ.

>> Vanguard VFIAX Vs VOO

Vanguard Information Technology ETF Explained

While they have a lot of the same investments – like Microsoft Corporation (NASDAQ:MSFT), PayPal, Nvidia – the Vanguard Information Technology ETF dives deeper into technology stocks than QQQ.

It’s a technology-specific ETF that seeks to replicate the broader technology sector. However, there are some notable tech stocks missing.

Besides those already mentioned, it also includes several heavy-hitting financial technology stocks, like:

  • Visa Inc. Class A (NYSE:V) 
  • Mastercard Incorporated Class A (NYSE:MA)
  • Cisco Systems Inc. (NASDAQ:CSCO) 
  • Intel Corporation (NASDAQ:INTC) 
  • Adobe Inc (NASDAQ:ADBE)
  • Oracle Corporation (NYSE:ORCL)
  • Salesforce.com, inc. (NYSE:CRM) 

Like QQQ, its biggest exposure is in Apple, but this ETF portfolio’s Top 10 list notably lacks Facebook, Inc. (NASDAQ:FB), Alphabet Inc (NASDAQ:GOOGL), and Amazon (AMZN).

If you want to include those while sticking with Vanguard, the Vanguard Growth ETF (NYSEMKT:VUG) is the perfect fund for that, although it also includes non-tech securities.

The VGT is one of many ETFs provided by Vanguard – in fact, it’s the second largest provider after iShares. It has a wide variety of industry-specific ETFs, and each is a broader part of the Vanguard Total Stock Market ETF (NYSEARCA:VTI).

VGT is passively managed to track and manage the performance benchmarks of the information technology market sector. Each component is weighted to balance the market capitalizations and ensure a smooth investment vehicle.

In fact, let’s dive deeper into the investment differences between the Nasdaq 100 and Vanguard’s indexes to see how they compare.

>> Vanguard VTI Vs VOO

What Stocks Make Up QQQ?

There are 100 stocks in the Nasdaq 100, and they run the gamut of industries. Its heyday came during the Dotcom Bubble at the turn of the millennium, although it still maintains around $10 billion in average daily trading volume in 2020.

Stocks on the QQQ index include:

  • Activision Blizzard Inc (NASDAQ:ATVI)
  • Charter Communications Inc (NASDAQ:CHTR)
  • Dollar Tree, Inc. (NASDAQ:DLTR)
  • Kraft Heinz Co (NASDAQ:KHC)
  • Mondelez International Inc (NASDAQ:MDLZ)
  • NXP Semiconductors (NASDAQ:NXPI)
  • Sirius XM Holdings Inc (NASDAQ:SIRI)
  • T-Mobile US (NASDAQ:TMUS)
  • Ulta Beauty Inc (NASDAQ:ULTA)
  • Verisign, Inc. (NASDAQ:VRSN)

Zoom Video Communications Inc (NASDAQ:ZM), DexCom, Inc. (NASDAQ:DXCM), DocuSign Inc (NASDAQ:DOCU), Moderna Inc (NASDAQ:MRNA), and Pinduoduo Inc – ADR (NASDAQ:PDD) were all added to the index in the aftermath of the 2020 novel coronavirus pandemic.

They were able to successfully recover and generate revenues to maintain or gain value for investors while the components they replaced (which included multiple airlines) failed.

In fact, every year, the Nasdaq 100 is rebalanced and reranked, while included companies can be replaced at any time by higher-performing investments.

This fluidity ensures you benefit from an advanced investment strategy without needing to actively monitor the entire market to determine where your funds should go.

Typically, only day traders and large investment firms have professional analysts watching these markets. With the QQQ ETF, you gain their experience without the time investment.

Let’s explore the fees involved with investing in each of these ETFs mentioned.

QQQ Fees and Expense Ratios

The expense ratio or managed expense ratio (ER/MER) is how much of the ETF’s assets are used for operational expenses.

Because these administrative and other costs are deducted from the fund itself, it reduces the assets and subsequent return to investors. For the QQQ ETF, the expense ratio is 0.2 percent.

QID, on the other hand, requires a lot more hands-on approach, and its expense ratio increases to 0.95 percent.

TQQQ and SQQQ also have a 0.95 percent expense ratio, making each of them extraordinarily high.

By comparison, the S&P 500 has over a dozen index funds with an expense ratio of less than 0.1 percent.

QQQ, which is the lowest ratio of the indices is still twice as expensive to manage as any of the S&P 500 funds.

>> Betterment vs Vanguard

VGT Costs and Management Fees

VGT has an expense ratio of 0.1 percent. This is more expensive than both the S&P 500, although still cheaper than QQQ and far less than the other Invesco ETF offerings.

Vanguard also offers an optional Personal Advisor Services asset management fee of 0.3 percent that covers all the administration costs of additional personal advisory services.

VANGUARD PERSONAL ADVISOR SERVICES
vanguard investments

InvestorMint Rating

4.5 out of 5 stars

  • Management Fee: 0.30%
  • Account Minimum: $50,000

via Vanguard secure site

Because the company has over $6.2 trillion in assets under management, there is a good chance you may already have something invested in Vanguard without even knowing it.

If you do use them as your investment firm, be aware that they will favor their own ETFs over competitors.

Now that you understand the fee structures of each ETF, let’s discuss what really matters – how much money they’re returning to investors.

>> Best Vanguard Funds

QQQ Returns vs VGT Returns

Each of these funds is popular because they have healthy financial returns for investors, in the form of both market growth and dividend payments.

While no investment’s future is guaranteed, here’s what these two ETFs have historically paid heading into the 2020s.

QQQ RETURNS

QQQ has an annual dividend yield of 0.55%, or approximately $1.629 per share annually.

Its five-year growth from 2015-2020 nearly tripled its value, growing from just over $100 to over $275 per share.

It also more than doubled in price during the previous five-year period from $45 in 2010. This gives it strong performance indicators moving through the 2020s.

VGT RETURNS

VGT also pays a cash dividend, although the coronavirus may have suspended this for the remainder of 2020.

In 2019, the fund paid $2.72 per share to investors, and $1.516 was already distributed in 2020 before the end-year freeze.

In the five-year period from 2015-2020, VGT tripled in price, going from $100 in 2015 to over $300 in 2020.

Its previous five-year performance was a little slower though, increasing from $60 to $100 per share.

>> Vanguard Review

QQQ vs VGT: The Bottom Line

ETFs are a great way to diversify your investment portfolio without needing to spend a lot of money to get 1 share of an expensive company.

They also provide the benefit of advanced trading strategies that are passively executed, so you don’t have to watch the market. QQQ and VGT are both popular choices for those seeking a technology investment.

VGT is outperforming QQQ in 2020, and it has a more tech-focused offering. It’s also slightly cheaper with fees, making it the obvious choice between the two, unless you really want a piece of companies like Facebook, Google, and Amazon.

>> Vanguard Personal Advisor Services Review

The article PowerShares QQQ vs VGT was originally posted on Investormint

]]>
0
Blooom Vs Robo-Advisors Review 2020 https://investormint.com/investing/blooom-401k-vs-robo-advisors https://investormint.com/investing/blooom-401k-vs-robo-advisors#disqus_thread Thu, 03 Sep 2020 14:51:43 +0000 https://investormint.com/?p=3408 Blooom manages defined contribution plans, including 401(k), 403(a), 403(b) and 457 plans for a flat annual fee and has no account minimums.

The article Blooom Vs Robo-Advisors Review 2020 was originally posted on Investormint

]]>
Most robo-advisors compete fiercely to invest your money by rolling out an extensive range of services, including digital and human advice, retirement calculators, and mobile financial apps. But few cater to retirement investors who aren’t quite sure whether their 401(k)s are being managed adequately.

And that has left a gaping market opportunity for a digital money manager called blooom, which was started by three guys from the mid-west.

blooom grow your 401k blooom is unique among robo-advisors because it specializes in managing 401(k) accounts that so many robo-advisors overlook.

Unlike robo-advisors who require you to transfer assets, blooom simply connects to defined contribution plan accounts you already have, so getting started with blooom is easy.

Another brownie point for blooom is its pricing. blooom charges a flat annual rate starting at just $95.

Plus, blooom stipulates no account minimum so small accounts can benefit right away and individuals with large account sizes get a whole lot of bang for their buck.

blooom  Spotlight

BLOOOM SPOTLIGHT
blooom logo

InvestorMint Rating

4 out of 5 stars

  • Management Fee: $95 - $250
  • Account Minimum: $0

via Blooom secure site

blooom Vs Robo-Advisors

blooom (with three “o”s) is laser-focused on optimizing 401(k) plans for Americans. Unlike most other robo-advisors who generally cater to taxable accounts, traditional IRAs, Roth IRAs, and SEP IRAs, blooom exclusively manages 401(k) plans.

If you have a chunk of change that you want to invest at low cost, a bunch of top notch robo-advisors will crop up on your radar screen.

But most of these companies focus on standard taxable accounts as well as traditional IRAs, SEP IRAs, rollover IRAs and Roth IRAs. Where blooom stands apart from its rivals is its focus on defined contribution plans.

What comes as a shock to many 401(k) investors is that their investment representatives and fund companies don’t actually manage their money on their behalves.

blooom vs robo advisors

When you first sign up with those companies, you would have picked the percentage allocation to invest in each fund, and if you’re like most people that selection process was probably random. It is not uncommon for many 401(k) investors to choose an allocation and forget about it as time goes by.

For most retirement investors, 401(k) investing is a murky world of fees and uncertain fund choices. The funds you invest in have expense ratios that eat away at your savings year after year and the allocation may be less than ideal, but how do you really know?

blooom has the ambitious goal to “fix 401(k)s for EVERY American” and it’s off to a flying start with over $500 million in assets managed. The idea is to make 401(k) help smart, simple and easily available to all Americans.

How blooom Works

To get started, connect blooom to your existing online 401(k) account. blooom analyzes your 401(k) holdings and makes changes within 10 to 30 days. Thereafter, blooom monitors your account regularly and notifies you when it automatically rebalances your portfolio.

When you sign up with blooom, your assets stay put. You don’t have to deal with the hassles of transferring funds to get started.

Unlike many other robo-advisors, which take custody of your assets, blooom simply links into your existing 401(k) accounts. As long as your account is online, blooom can get to work right away evaluating your 401(k) holdings.

The best way to think of blooom is as a digital manager that is constantly reviewing your 401(k) account holdings to check whether your allocations match your risk profile and the algorithm is looking for ways to lower your costs. Once you link your account to blooom, it takes anywhere from 10 to 30 days for blooom to “fix” your 401(k).

The heavy lifting of account analysis at blooom is done by computer algorithms in an automated way but licensed advisors and blooom account coordinators test and confirm rebalancing is accurately completed.

After changes have been made, blooom regularly monitors your account to check whether changes are needed, and takes action on your behalf so you don’t have to lift a finger.

Each time changes are made, you will be notified by email so you won’t be surprised when you receive your 401(k) statements in the mail with new portfolio selections.

Where blooom shines even more brightly is that if specific questions about your 401(k) do crop up, you have access to experts via live chat, email or phone.

Which Accounts Does blooom Manage?

blooom exclusively manages employer-sponsored retirement accounts, including:

So far, only individual accounts are managed by blooom. Families will need to sign up separately to ensure each account is diversified, and each family member has their own blooom profile, including age and target retirement date.

For investors seeking automated investment management of taxable accounts, traditional IRAs, Roth IRAs, SEP IRAs, rollover IRAs, and Trusts, robo-advisors, such as Betterment, will be a better fit.

blooom Fees Vs Robo-Advisor Fees

Most robo-advisors charge a percentage of assets under management. For example, Betterment and Wealthfront both charge 0.25% annually for purely digital advice.

Schwab Intelligent Portfolios is unique in charging no management fees because it makes money from expense ratios of proprietary funds which make up client portfolios.

And financial industry goliaths, such as Vanguard and Fidelity, also offer robo-advisor services for an annual fee which is a percentage of assets under management.

By contrast, blooom charges a flat annual rate of $95 – $250 depending on which level of service you choose:

  • Essentials: $95
  • Standard: $120
  • Unlimited: $250

No matter what the size of your account, the flat rate remains the same. You won’t find any hidden “gotchas” in their fee schedule and you can cancel anytime.

For individuals with $50,000 or more in retirement savings in a 401(k), blooom is an obvious win. You pay lower fees than at most other robo-advisors and don’t have to worry about the hassles of transferring assets to another custodian.

How Safe Is Your Account With blooom?

blooom employs five primary methods to safeguard your 401(k) account security:

Security Feature Description
256-Bit Encryption SSL encryption is used to keep data private.
Bank-Level Security High level security is applied to all personal information.
Secure Servers Encryption is used to ensure online transactions are secure and data is kept confidential.
24/7 Hacker Virus Scans Around the clock scanning is designed to protect you from fraud and unusual account activity.
3rd Party Verification To make sure your identity is not compromised, third party verification is used.

blooom Portfolios Vs Robo-Advisors

Most robo-advisors incorporate Nobel-prize winning research, called Modern Portfolio Theory, into their algorithmic selection of funds when building client portfolios.

Generally, this means targeting returns that match your risk profile. Younger investors with longer time horizons can invest more heavily in stocks while individuals closer to retirement have higher weightings of bonds usually.

blooom doesn’t look to reinvent the wheel when it comes to investment selection but instead modifies portfolio allocations to align with target risk levels. If your portfolio is weighted too aggressively in equities compared to your financial goals, risk profile and time horizon, blooom makes the necessary adjustments.

A challenge blooom faces is the limited investment choices available. Unlike an IRA or standard taxable account, 401(k) accounts are limited by a set number of funds that your employer plan sponsor makes available. So, blooom looks to optimize your allocation based on the choices available rather than the universe of all stocks and bonds.

blooom Vs Robo Advisors Summary

blooom stands apart from other robo-advisors in three primary ways. First, blooom specializes in 401(k) accounts and defined contribution plans more generally as opposed to taxable accounts and IRAs.

Secondly, blooom does not take custody of your assets but instead links into existing online retirement accounts where your 401(k) is managed and monitors allocation and fees digitally using proprietary algorithms.

And finally, blooom charges a flat rate annual fee instead of a percentage of assets under management, which offers compelling value to large account sizes because fees do not increase proportionately as they do with most robo-advisors.

For any retirement-focused investor who is serious about optimizing their 401(k) holdings, blooom is our top choice digital manager.

The article Blooom Vs Robo-Advisors Review 2020 was originally posted on Investormint

]]>
0
Blooom Inc – 401k Auto Managed For $95/yr? https://investormint.com/investing/robo-advisors/blooom-inc https://investormint.com/investing/robo-advisors/blooom-inc#disqus_thread Thu, 03 Sep 2020 14:36:24 +0000 https://investormint.com/?p=5266 Blooom is a robo-advisor that manages defined contribution plans, including 403(b)s, 403(a)s, 457s, and thrift savings plans for a flat annual fee.

The article Blooom Inc – 401k Auto Managed For $95/yr? was originally posted on Investormint

]]>
blooom Inc specializes in managing retirement plans like 401(k)s automatically.

Most other online money managers avoid these retirement plans like the plague so blooom earns high marks for tackling workplace retirement plans head on.

Beyond 401(k) portfolios, blooom automatically manages defined contribution plans, like 403(b)s, 403(a)s, 457s, and thrift savings plans.

If you have a workplace retirement plan that causes your eyes to glaze over, you will want to read on. Where blooom Inc shines is by analyzing your retirement account holdings and weightings for free, and managing them automatically for as low as $95 per year.

blooom Inc Fees & Minimums

BLOOOM SPOTLIGHT
blooom logo

InvestorMint Rating

4 out of 5 stars

  • Management Fee: $95 - $250
  • Account Minimum: $0

via Blooom secure site

Fix Your 401(k) In 5 Minutes?

blooom makes the lofty claim that it can fix your 401(k) in 5 minutes and delivers on its promise.

It only takes a few minutes to link your workplace 401(k) plan to blooom.  Your company doesn’t need to have a prior relationship for you to reap the benefits.

blooom Inc Cost & Features

Flat Annual Cost As low as $95
Minimum Investment $0
Automatic Management YES
Portfolios Rebalanced Every 90 days
Workplace Retirement Plans 401(k), 403(a), 403(b)
Thrift Savings Plan YES
Client Fees Saved > $600 million
blooom BBB Rating A+

Is blooom Inc Right For You?

blooom is best for investors with employer-sponsored plans, who are fee-savvy, and lean towards being more risk-seeking investors.

According to blooom Inc, clients have collectively saved over $600 million in fees by using its service. And it’s no surprise that it has become so popular because it solves a real problem.

Puzzling over retirement plan choices is often a game of chance for employees. Few employees have the time or interest to research mutual fund expense ratios, ongoing fees, and performance returns of each fund selected.

To save employees the hassle, blooom takes over the process of selecting your portfolio holdings and allocating them.

Unless you are a mutual fund expert, chances are blooom can help you if you have one of the following defined benefit plans:

  • 401(k)
  • 403(b)
  • 403(a)
  • 457

blooom portfolios lean towards a heavier weighting of stocks than bonds so conservative investors should pay heed.

Regardless of your risk tolerance, you can enjoy free portfolio analysis to gauge whether opportunities for improved portfolio selections and allocations exist.

The bottom line is that for the vast majority it makes sense to hand over the responsibility of retirement plan management to blooom.

How blooom Inc Works

As part of its Standard package, blooom monitors your portfolio regularly to ensure it is optimally balanced, and rebalances it every 90 days.

Sometimes blooom may not have much choice other than to select a high cost fund because employer-sponsored plans are limited to a fixed set of choices usually. Often, only one choice of fund exists in an investment category.

But while blooom may run into a brick wall from time to time when it comes to fund selections, it can still make decisions about the optimal amount to invest in each fund in order to keep the overall portfolio composition balanced.

How Much Is blooom Inc?

blooom doesn’t impose any hurdle to get started so it’s ideal for price-conscious investors.

It’s 100% free to connect your 401(k) and analyze it, and no account minimum is imposed either.

blooom Pricing

blooom charges a flat fee yearly regardless of how much money is in your defined contribution plan.

blooom charges an annul fee of as low as $95, which is about the cost of a Netflix subscription.

It’s hard to argue blooom is expensive at that price but if you have a small portfolio it might be a lot in percentage terms.

Whether you have a $10,000 portfolio or a $100,000 portfolio, blooom charges a fee as low as $95 for the year. If you want more service options, a higher fee is required as part of its Standard and Unlimited packages, both of which off auto optimization.

Someone with $10,000 pays  just 0.95% in fees on managed assets compared to just 0.10% for the person with $100,000.

Portfolio Size Annual Percentage Fee of Assets
$10,000 0.95%
$50,000 0.19%
$100,000 0.10%

blooom vs Betterment

blooom stands alone as the only robo-advisor willing to directly manage your 401(k) retirement portfolio.

In the highly competitive field of robo-advisors, you might expect that blooom has lots of rivals but remarkably it stands virtually alone.

Unlike standard taxable accounts, IRAs, Trusts, and a host of other financial accounts, 401(k)s are quite messy to manage.

Employers often feature a limited pool of funds and each employer has a slightly different take on which funds are offered to employees, so the process is by no means standardized.

By contrast, a robo-advisor like Betterment can select from the entire universe of index funds when building client portfolios in non-401(k) accounts, which is precisely why so few robo-advisors compete with blooom.

But tens of thousands of businesses offer 401(k) plans to employees so there is a real opportunity for a brave robo-advisor to help the average Joe or Jane out, and so far blooom stands alone as the single company willing to directly manage 401(k)s using a technology-powered algorithm.

Personal Capital and Vanguard Personal Advisor Services will provide guidance to clients who hold 401(k)s but they won’t directly manage them, so blooom really is your only answer if you want a hands-off approach to managing your 401(k).

blooom Performance Returns

blooom strives to improve portfolio returns by removing funds that don’t align with your retirement goals and by inserting funds that better meet your objectives.

To improve the performance of your defined contribution plan portfolios, blooom relies on computer algorithms to:

  1. Analyze funds in your existing 401(k) and remove ones that don’t align with your retirement goals or have higher fees than alternatives.
  2. Choose index funds to keep fees low unless an actively managed fund is a better choice to gain necessary exposure.
  3. After choosing the optimal funds to meet your target allocation, blooom chooses funds with the most competitive expense ratios and managers’ experiences.
  4. Lastly, blooom cross-references and verifies results to ensure they comply with your recommended 401(k) allocation.

Both fund selections and weightings are assessed every 90 days and rebalanced if necessary.

Over time, when retirement looms closer, blooom automatically adjusts the weightings of stocks in your portfolio down lower to better suit your lower risk tolerance.

blooom Review: Pros and Cons

blooom imposes no account minimum, analyzes your portfolio for free, connects you to financial experts, and charges a flat annual fee, but small account sizes will pay high annual percentage fees on managed assets.

blooom Pros blooom Cons
Flat Annual Fee: blooom charges a flat annual fee of as low as $95 to directly manage defined contribution plan portfolios. Lack of Phone Support: No phone support is available via blooom, but email and live chat support is provided.
Expert Financial Advice: Email and live chat support is available from financial experts so you can ask about more than retirement portfolio planning. High Fees On Small Accounts: Smaller account sizes will pay high percentage fees annually on managed assets.
Regular Rebalancing: Every 90 days blooom rebalances portfolios if needed and notifies clients when changes are made.
Free 401(k) Analysis: Even if you don’t sign up as a premium client, blooom will analyze your 401(k) for free.
Zero Account Minimums: No account minimum is stipulated to get started.

blooom Account Types

blooom supports the following employer-sponsored plans: 401(k), 403(b), 401(a), 457 and Thrift Savings Plans.

Type Capability
401(k)
401(a)
403(b)
457
Thrift Savings Plan

blooom Inc Review Summary

blooom solves a real problem for retirement-oriented investors with employer sponsored plans who don’t know how much money to invest in each portfolio holding or aren’t sure which funds are best suited to meet their financial goals.

The few robo-advisors who do venture into the defined contribution plan space only provide guidance. By contrast, blooom directly and automatically manages workplace retirement plan portfolios.

The annual fee starting at $95 is low, though arguably for small account it is high on a percentage basis. Overall, we believe the value provided is significantly greater than the cost.

The article Blooom Inc – 401k Auto Managed For $95/yr? was originally posted on Investormint

]]>
0
Fix Your 401(k) with Blooom (Review) https://investormint.com/investing/robo-advisors/blooom-review https://investormint.com/investing/robo-advisors/blooom-review#disqus_thread Thu, 03 Sep 2020 14:34:14 +0000 https://investormint.com/?p=682 blooom Review: The undisputed leader in the robo-advisor industry when it comes to automatically managing 401(k) plans is blooom. If you are an employee at a company that requires you to pick a handful of funds for your retirement plans, blooom can help you find the best funds to meet your retirement goals. Your portfolio is balanced every 90 days to ensure it stays aligned with your objectives.

The article Fix Your 401(k) with Blooom (Review) was originally posted on Investormint

]]>
blooom-review

InvestorMint provides personal finance tools and insights to better inform your financial decisions. Our research is comprehensive, independent and well researched so you can have greater confidence in your financial choices.

blooom is unique among robo-advisors because it specializes in helping investors manage employer-sponsored retirement plans automatically.

Like other robo-advisors, blooom Inc uses computer algorithms to build retirement portfolios. And it goes a step further by connecting customers to financial advisors, who are available by chat, email, and phone during weekdays.

During our blooom review, we were pleasantly surprised to discover that the cost of managing a 401(k) starts as low as $95 per year. The low fee is compelling, especially when you consider that most other robo-advisors steer clear of defined contribution plans.

And unlike some robo-advisors, blooom won’t penalize newcomers with any account minimum hurdle. In fact, when you weigh up the pros and cons, it’s easy to see why blooom offer tremendous value.

Blooom Promo Code

BLOOOM SPOTLIGHT
blooom logo

InvestorMint Rating

4 out of 5 stars

  • Management Fee: $95 – $250
  • Account Minimum: $0

via Blooom secure site

How blooom Works

You can create a blooom account and connect easily to your existing 401(k), 403(b), 401(a), 457 or TSP plans. blooom will then analyze your portfolio for free.

If you are not sure whether your portfolio is optimized for your age, risk, and goals, blooom evaluates it using proprietary computer algorithms at no cost.

Here is a quick demo and overview of how blooom works:

Although blooom can analyze and make changes to your portfolio, it cannot withdraw funds from your account.

Once your account analysis has been completed, blooom factors in your age and timeline to retirement in order to build a target portfolio for you.

After blooom reviews your portfolio composition, it recommends investments from up to 14 asset classes.

Where blooom adds value to you is by crunching through thousands of options to select the optimal investment in each asset class to meet your needs.

Usually, low-cost index funds are favored but every once in a while blooom will select an actively-managed fund if it is a better match for your risk level and retirement goals.

Finally, blooom reviews your portfolio to ensure the portfolio built by its algorithms is indeed a match for you and fund changes are made.

Every 90 days, your portfolio will be re-analyzed to ensure portfolio weightings align with your capacity for risk and financial goals. And each time a change is made, blooom alerts you to the funds which are replaced.

blooom Inc Cost & Features

Low Annual Fee As low as $95
Minimum Investment $0
Automatic Management YES
Portfolios Rebalanced Every 90 days
Workplace Retirement Plans 401(k), 403(a), 403(b)
Thrift Savings Plan YES
Client Fees Saved > $600 million+
blooom BBB Rating A+

blooom Review: Is It Right For You?

blooom is designed for price-sensitive investors who want to hand off portfolio management to a financial advisor. 

Risk-Seeking Vs Risk-Averse Investors

When you join you will be invited to enter your birth date and specify when you plan to retire. With this information, blooom knows your age and the duration before you retire. It then constructs a portfolio to match your capacity for risk and financial aims.

blooom leans somewhat aggressive in its portfolio composition. Equities are weighted heavily until about 20 years out from retirement when bonds feature in the mix more prominently.

Because of the higher exposure to stocks, blooom is ideal for investors who are more risk-seeking than risk-averse.

Investors Seeking Professional Portfolio Management

Many research studies have shown that investors who receive professional financial advice outperform those who invest alone.

The reason so many investors fall short of the mark without advice is because, according to blooom, they make three major errors.

The first is to build a portfolio of bonds and stocks that have an incorrect mix compared to their risk tolerances and financial goals.

Next, investors frequently fail to diversify their 401k plans and instead invest heavily in a single company. Usually they are biased towards investing in the company that employs them.

And lastly, they don’t want to face the challenge of managing their retirement accounts, so they stick their heads in the sand like an ostrich!

Price Sensitive Investors

For investors who see the value of expert financial advice and care about the cost of receiving it, blooom is hard to beat because it charges a low annual fee.

For a low annual fee, blooom will identify areas of improvement in your existing 401(k) portfolio, make changes, and provide ongoing management of your existing portfolio.

Investors Seeking Alternative To Financial Advisors

Unless you pay a financial advisor a much higher fee (most likely), blooom is a compelling alternative. Not only is it an excellent option for investors who don’t want to pay a dedicated financial advisor, but it is also unique among robo-advisors.

Few robo-advisors dabble in 401(k)s because they can be a nuisance to manage. Each employer has its own set of limited securities in which employees can invest and it’s a difficult challenge to automate portfolio management of defined contribution plans.

For this reason, even the robo-advisors who advise on 401(k) plans, like Personal Capital, won’t manage them for you.

In fact, if you want your 401(k) plan managed automatically, blooom is really your only option.

blooom is best for:

  • Retirement-focused investors
  • Beginner investors
  • Fee-conscious investors
  • Hands-off investors
  • Investors who are more risk-seeking than risk-averse

blooom Fees Are Low

According to blooom, the average client could save over $60,000 in hidden fees over their working life based on a balance of $43,310 and an average annual contribution of $5,000.

blooom charges an annual fee that starts from as low as $95 for its Essentials package to as much as $25o for its Unlimited package.

The lifetime savings by choosing blooom amount to an astonishing $60,000 in fees based on an average balance of around $43,000.

To save you so much money, you might assume that blooom costs a fortune but in fact the flat annual fee is very affordable, especially for large accounts.

blooom fees

  • $95 – $250 Annual Management Fee
  • $0 Account Minimum

Compared to traditional financial advisors or other robo-advisors, this fee is very competitive. The $95 fee gets you a personalized portfolio but lacks the auto optimization.

The Standard package will include all the features of the Unlimited package but without the priority advisor access.

For $250 a client receives:

  • Personalized Portfolio
  • Auto Optimization
  • Transaction Activity Alerts
  • Advisor Access
  • Priority Advisor Access

That still compares well to a human advisor but it’s higher than Betterment and others charge to manage IRA and taxable portfolios.

The gotcha is the only place to manage your 401(k) automatically is blooom so choosing another robo-advisor is not a viable choice.

In our view, the fee is fair given the unique service blooom offers and the fact that clients have access to live advisors by email, chat, and phone.

How Are blooom 401k Portfolios Invested?

blooom analyzes your existing 401k, removes portfolio holdings that don’t align with your objectives or cost too much, and replaces funds with others that better align with your target allocation and financial aims. 

The following algorithm is applied to assess and optimize your portfolio:

  1. blooom analyzes your existing 401k and remove funds that don’t make sense.
  2. To keep fees low, blooom generally selects index funds but, every once in a while, actively-managed funds are chosen.
  3. After selecting funds that align with your target allocation, computer algorithms select investments to optimize for expense ratios and fund manager experience.
  4. Finally, blooom verifies the results and compares the new portfolio with your recommended 401(k) allocation.

Every 90 days thereafter, your portfolio is re-analyzed to ensure selections and weightings are optimal. If needed, your portfolio will be automatically rebalanced.

As you come closer to retirement, blooom will automatically modify the weighting of stocks in your portfolio to create a more conservative portfolio.

blooom App & Tools

You can link an existing 401(k) account to blooom in order to measure fees, and evaluate its composition, and allocation.

blooom makes it simple to analyze an existing 401(k).

Simply link to your existing provider after setting up your blooom account in order to view how well your current 401(k) is performing.

Hands-off investors can leave it to blooom to manage their 401(k) while self-directed investors can act on the recommendations provided.

Where blooom earns a few extra brownie points is its risk tolerance assessment.

Risk tolerance measures are factored into the sign up process using an adjustable slider that allows you to change your allocation by up to 20% either way from the suggested allocation.

blooom Pros and Cons

blooom charges a low, flat annual fee. The onboarding process is easy and it’s free to analyze your existing portfolio.  If blooom were to be docked a few points, it would be the high fee as a % of assets under management on smaller account sizes.

blooom Pros blooom Cons
Low Management Fees: blooom charges a flat annual fee starting as low as $95, which is a steal when compared to the costs charged by traditional financial advisors to manage defined contribution plans, and compares favorably to the fees charged by other robo-advisors. Large Cash Holdings: blooom structures portfolios with heavy weightings of equities which doesn’t account for the differing risk tolerance levels of clients and caters more towards risk-seeking than risk-averse investors.
Financial Advisors: Clients have access to financial advisors by email, phone and live chat during weekday business hours. Small Account Sizes Penalized: While fees are low as a % of assets under management for large account sizes, they are not insignificant for small account sizes, though still generally competitive when compared to traditional financial advisors, who often charge north of 1%.
Automatic Rebalancing: When fund weightings drift too far from the recommended allocation, blooom rebalances the portfolio. Automatic rebalancing is done every 90 days.
401(k) Assessment: blooom makes it easy to link to an existing 401(k) in order to assess whether expense ratios can be optimized and portfolio compositions can be improved.
No Account Minimums: blooom allows clients to sign up with no account balance minimum.

blooom Fees & Minimums

blooom imposes no account balance minimum, charges a low annual fee for account management and automatic rebalancing.

Category Fees
Account Management Fees $95 – $250
(annually)
Account Minimum $0
Automatic Rebalancing YES
(every 90 days)
Annual, Transfer, Closing Fees $0

blooom Account Types

blooom supports employer-sponsored plans: 401(k), 403(b), 401(a), 457 and TSP.

Type Capability
401(k) YES
403(b) YES
401(a) YES
457 YES
TSP YES

blooom Review Summary

Unlike most robo-advisors, which focus on taxable and IRA accounts, blooom is unique because it manages 401(k) plans automatically for a low yearly flat fee.

By imposing no account minimum, blooom makes it easy to get started. And by charging nothing to analyze your 401(k), there is no reason not to give it a whirl.

If you are like the average blooom client, you will experience instant fee savings and, over the life of the account, potentially save as much as $60,000.

The bottom line is if you have a defined contribution plan, like a 401(k), 403(b), or 401(a), blooom offers compelling value at a fair and flat yearly rate.

The article Fix Your 401(k) with Blooom (Review) was originally posted on Investormint

]]>
0
Lemonade Insurance Stock: Buy or Sell https://investormint.com/investing/lemonade-insurance-stock-buy-or-sell https://investormint.com/investing/lemonade-insurance-stock-buy-or-sell#disqus_thread Sun, 02 Aug 2020 08:43:28 +0000 https://investormint.com/?p=13882 Lemonade stock has roared higher since its IPO based on the company’s disruptive business model that is generally priced below competitors.

The article Lemonade Insurance Stock: Buy or Sell was originally posted on Investormint

]]>
LEMONADE INSURANCE SPOTLIGHT
lemonade insurance logo

InvestorMint Rating

4.5 out of 5 stars

  • Homeowners & Renters Insurance: YES
  • Flat-Fee Revenue Model: YES
  • Donates Leftover Premiums To Causes: YES

via Lemonade secure site

Traditional insurance is widely considered a necessary evil. Companies like State Farm, Allstate, and Liberty Mutual amass large profits through collecting premiums, paying out claims, and keeping the difference.

They also invest the money that comes in from premiums before it is paid out for claims, generating substantial returns.

It’s a lucrative system. The three homeowner’s insurance companies mentioned generated the following net income in 2019:

  • State Farm – $5.6 billion
  • Allstate – $3.5 billion
  • Liberty Mutual – $1.045 billion

However, this business model isn’t designed to benefit consumers. The companies only make money when they charge high premiums and keep claim payouts low – or, at the very least, delay payouts as long as possible.

As a result, insurance clients often complain that their premiums are excessive, or that the companies are slow to pay out claims – assuming they don’t deny the claims altogether.

Though many consumers are frustrated with the current system of homeowner’s and renter’s insurance, there simply haven’t been any alternatives. Until now.

Lemonade has developed a new model for homeowner’s and renter’s insurance, and it threatens to turn the entire industry upside-down. The company is disrupting the insurance market, and investors have been quick to buy in since its July 2020 initial public offering (IPO).

Of course, not everyone is willing to take on the risk of a new tech company. Some investors are hanging back to watch before purchasing shares. Is Lemonade stock worth buying now, or are the more cautious investors right to wait and see?

What is Lemonade Insurance?

Lemonade is a recent addition to the blossoming insurtech industry – a group of companies disrupting business as usual in the insurance world through advanced technology. The Lemonade platform relies heavily on artificial intelligence, which means it can sell policies and process claims in minutes.

For now, Lemonade is selling renter’s insurance and homeowner’s insurance, as well as the recently-added pet insurance. The company has driven down premium prices and uses a subscription-style model for payments, resulting in significant savings for customers.

Traditional renter’s insurance premiums can be $150 or more per year, and homeowner’s policies from those same companies are typically over $900 per year.

Lemonade’s renter’s insurance policies start at $5 per month, totalling $60 per year, and homeowner’s policies start at $25 per month, totalling $300 per year. 

Lemonade has made its biggest inroads with Millennials, who are already comfortable with managing their finances online. These are the digital natives who don’t remember a time before computers were integrated into school and work, and they were the first to fully embrace the digital lifestyle that is so deeply ingrained today.

lemonade insurance stock

Millennials are the consumers who made online banking and self-directed online brokerage accounts popular, and they are driving the many app-based services that have cropped up in recent years – ridesharing, grocery delivery, and smart home management, to name a few.

In some ways, it’s surprising that a service like Lemonade didn’t launch sooner, as it shares the features and benefits that Millennials have leaned into again and again.

>> How To Research Stocks

Why Is Lemonade Insurance So Popular?

In addition to the low price and the ease of purchasing policies and submitting claims, Lemonade is popular for its philanthropic principles. The company was set up as a public benefit corporation, which changes the perspective of business leaders as they make decisions about operations, distribution of profits, and similar.

Instead of the standard corporate focus of delivering value to shareholders, Lemonade has a legal obligation to consider social implications in decision-making.

One of the most compelling illustrations of Lemonade’s public benefit perspective is the contributions it makes to nonprofit organizations.

While traditional insurance companies generate profit through the difference between premiums collected and claims paid, Lemonade relies on other methods of creating value for shareholders. The spread between premiums and claims is donated to charities selected by its clients.

As the founders developed Lemonade’s business model, they considered how this move might change customer behavior. The company believes that clients are less likely to submit unnecessary or exaggerated claims when they know that they aren’t hurting a faceless corporation – they are hurting the nonprofits that would otherwise benefit from the funds.

The altruistic component of Lemonade’s model plays well among Millennial consumers, and it is likely to attract the generation that follows.

As a group, this demographic has demonstrated the priority they place on upholding values and focusing on social causes in every aspect of their lives, from where they work to which organizations they patronize.

>> How To Make Money Renting Your Home

Lemonade IPO Was A Hit

Lemonade was founded in 2016 and raised new capital several times in the three years that followed. Its earliest backers included investors like Aleph, Sequoia Capital, Google Ventures (GV), Thrive Capital, and Sound Ventures. The company held its IPO on July 2, 2020, pricing shares at $29.

The IPO was a resounding success, with shares trading at $50.06 by the end of the day. Investors immediately saw the potential in a company that simplifies a product nearly everyone needs, then sells it at a rate far lower than its competitors.

It helped that Lemonade has received a lot of positive press from business experts and analysts before shares were available to the public.

For example, Lemonade was ranked number 17 on CNBC’s 2020 list of Disruptor 50 Companies, which put it directly in the spotlight as far as companies to watch.

>> How To Buy Impossible Foods Stock

Is Lemonade Stock Going to Fall?

In just a few weeks, Lemonade stock has already put early investors through a roller coaster of ups and downs. After a day of trading, share prices were up by 138 percent, then a week later, they dropped 13 percent. Another two days and shareholders saw a 7 percent increase.

Perhaps the most unnerving part for investors without a lot of IPO experience is the fact that these ups and downs aren’t linked to any news from the company.

When companies go through the IPO process, they observe a quiet period for 40 days after the stock begins trading, and no new information is released. That means the share price volatility is essentially based on investor sentiment, which tends to be fluid for the first few months of trading.

In other words, Lemonade stock is likely to fall again, and it may be impossible to predict when and how much.

More than that, even the most experienced analysts can only theorize why the price drops occurred after the fact.

This is all part of the IPO experience, and it is generally nothing to worry about. As the company begins to build a history, stock prices will settle down a bit.

>> What Are The Different Types Of Stocks?

Is Lemonade Stock a Good Buy?

Any investment carries risks, and insurtech certainly has its share. Given the volatility inherent in the early days of trading a new stock, Lemonade isn’t right for everyone at the moment.

With that said, those who are comfortable with uncertainty and can manage the highs and lows that come with the first few months of any IPO, Lemonade stock is a good buy.

In fact, if all goes according to the company’s plan, it may never be a better buy than it is right now.

Consider the advantages Lemonade has over its peers:

  • An astonishing 94 percent of workers surveyed by Glassdoor said they would recommend working at Lemonade to a friend.
  • A full 97 percent of respondents approve of Lemonade’s CEO.

These two elements are critical indicators of a strong company culture, which bodes well for the company’s success.

From a financial perspective:

  • In 2019, year-over-year revenue growth topped 201 percent, totalling $63.8 million.
  • Through its use of artificial intelligence, chatbots, and other advanced technology, Lemonade expects to serve 2,000 customers per employee. Compare that to the 150 to 450 customers per employee of Lemonade’s biggest competitors. Greater efficiency tends to generate bigger profits over time.

Granted, Lemonade isn’t showing a profit yet. In fact, 2019 generated a massive loss of $109 million.

However, when you consider the sales, marketing, and technology expenses involved in establishing any new company, much less a disruptive financial services company, there is every reason to believe that profitability will come as the company gains momentum with consumers.

In short, those that can handle some early uncertainty may want to add Lemonade to their portfolios now. Some industry experts believe share prices have nowhere to go but up.

>> How To Buy Enterprise Stock

Alternatives to Buying Lemonade Stock

For those who aren’t quite ready to trust their hard-earned cash to an untested startup, there are alternatives.

First, you may wish to consider traditional insurance companies, which are still doing quite well.

If Lemonade succeeds in dramatically transforming the industry, it will happen over time, giving those who hold shares of traditional insurers enough notice to reconsider their choices.

These are three of the top-performing insurance stocks:

  • MetLife – Simple business model, reliable history of solid returns, and impressive dividends
  • UnitedHealth – Market leadership, shareholder-friendly management, and dividends that increase regularly
  • Markel – Handles niche clients, generates solid underwriting profits, and gets creative with investments

If investing in an insurance company isn’t quite what you had in mind, you may wish to examine opportunities available from other, more established tech disruptors.

  • Dropbox – Increasing revenues and an expanding customer base are projected to generate approximately 23 percent growth in profits for 2020
  • PayPal – A widening international presence promises impressive results for 2020 and 2021 – revenue growth predictions estimate 15 percent per year
  • Amazon – Rising interest in e-commerce and delivery-based services has analysts projecting 18.5 percent revenue growth and 30.7 percent earnings growth this year

These companies may lack some of the excitement of a start-up’s early days, but they are still a long way from settling into a rut. Investors who choose one or more of these alternatives have a lot to look forward to.

>> How To Buy Subway Stock

The Bottom Line: Is Lemonade Stock Worth Buying?

Lemonade has generated significant interest in a fascinating model that will upend the insurance industry – assuming it catches on. At the moment, there is every reason to believe it will.

However, as with any tech startup – and really any stock purchase at all – there are no guarantees. Any one of a hundred things could go wrong, leaving shareholders with substantial losses.

The question of whether to buy boils down to your financial goals and your tolerance for risk.

If you can afford to take a chance on a promising tech startup, this one is a good bet. If you have minimal room for error, a more established company with a history of success and the tools and resources necessary to ensure a strong future might be a better option.

>> How Old Do You Have To Be To Invest?

 

The article Lemonade Insurance Stock: Buy or Sell was originally posted on Investormint

]]>
0
AskFinny Review – Money Guides For Your Finances https://investormint.com/investing/askfinny-review https://investormint.com/investing/askfinny-review#disqus_thread Mon, 13 Jul 2020 16:20:32 +0000 https://investormint.com/?p=13854 AskFinny breaks complex financial concepts down to the basics and eliminates jargon with clear, accessible financial education, coaching, and tools.

The article AskFinny Review – Money Guides For Your Finances was originally posted on Investormint

]]>
It’s an unfortunate truth that a majority of Americans struggle with financial planning. According to research from Gallup, just 32 percent of households have a budget, and only 30 percent have a long-term financial plan.

When it comes to emergency savings, 19 percent of Americans have nothing at all set aside, and 31 percent have $500 or less in savings. 

More than 75 percent of the American workforce reports living paycheck to paycheck and struggling to make ends meet. Nearly half say they are “concerned, anxious or fearful” about the present state of their finances.

ASKFINNY SPOTLIGHT

InvestorMint Rating

5 out of 5 stars

  • Manage Your Finance & Budgets
  • Analyze Investments (Stocks & Funds)
  • $99 Yearly

via AskFinny secure site

Approximately 55 percent of Americans own stock, including stock held in retirement savings plans like IRAs and 401ks. However, the percentage of Americans who own investment portfolios outside of their retirement plans is far lower.

When looking at these figures as a whole, a clear picture emerges: Americans simply don’t have the financial education, tools, and resources necessary to ensure their financial security. That’s where AskFinny comes in.

What Is AskFinny?

In short, AskFinny helps you better manage your finances and budgets.

AskFinny is committed to changing the state of financial health in the US. Co-founders Chihee Kim and Milan Kovacevic know how hard it is for newcomers to get their arms around the vast array of financial products and services available, much less determine which are most appropriate for achieving individual financial goals. In an effort to make managing finances user-friendly – and fun – they created AskFinny.

AskFinnyAskFinny Logo breaks complex financial concepts down to the basics and eliminates jargon with clear, accessible financial education, coaching, and tools. 

Subscribers get personalized information and recommendations in a gamified setting that transforms dry, dull material into an engaging experience.

In their letter to members, AskFinny’s founders point out:

“Finance is very personal and shouldn’t be confusing or intimidating, so let us help you cut through all the noise and jargon so you can make better financial decisions. 

We believe firmly in the power that education can provide. Empower yourself and start learning with Finny today!”

Of course, the trouble is that costly financial management services are often out of reach for the people who need them most. So, what do AskFinny users get for their money? Is there value in joining the AskFinny community?

AskFinny Review:
What Do Users Get?

AskFinny’s premium plan is simple. For a low annual fee, which can be paid monthly, subscribers have unlimited access to a long list of money guides that cover topics of interest to those just starting out in financial planning, as well as those who are looking to develop or improve their investment portfolios.

In addition, AskFinny has a number of powerful analysis tools that make choosing the right assets for your portfolio simple.

Beyond the educational resources and investment tools, AskFinny offers premium members regular newsletters that provide insight on thriving in current market conditions.

That’s a huge benefit during turbulent economic times, because even the most sophisticated investors struggle with managing through market lows and making the most of market highs.

Perhaps the most useful resource that AskFinny subscribers get with their membership is the “AskFinny” Q&A service. 

Subscribers can type any financial question into the tool, and the question is answered instantly. If the automated chatbot doesn’t know the answer, you can connect with a human to get expert advice.

Better still, the information is presented without bias, as Finny isn’t beholden to any financial institution. If you need more detail, AskFinny directs you to relevant materials on the site.

Financial Education and
Resources from AskFinny

The beauty of AskFinny is its inclusive design. You don’t need any knowledge of finance, banking, or investing to get started.

More importantly, you don’t need to be wealthy to benefit from the site. AskFinny offers education and resources that cater to all levels of knowledge and every possible financial situation.

Whether you are well-established in your career, coping with unemployment, or ready to open your first brokerage account, AskFinny offers guidance specific to your situation.

This is the current list of AskFinny’s Money Guides:

  • Bear Market Guide
  • Car Insurance Guide
  • Credit Report Guide
  • Credit Score Guide
  • Debt Payoff Guide
  • Financial Independence (FI) Guide
  • Frugal Living
  • Health Insurance Guide
  • Health Savings Account (HSA) Guide
  • High-Yield Checking, Savings and CDs
  • Home Insurance Guide
  • Home Ownership Guide
  • Life Insurance Guide
  • Money Guide for All Ages
  • Mortgage Guide
  • Recession Survival Guide
  • Retirement Planning Guide
  • Simple Investing
  • Spending and Budgeting
  • Student Loans Guide
  • Target-Date Fund Investing
  • Unemployment Benefits

If you don’t see the topic you need, keep checking back – AskFinny editors are always reviewing the selection of content and adding new resources.

AskFinny Tools for Investors

Whether you are developing your first portfolio or you are interested in advanced investing techniques, AskFinny has exclusive analysis tools that can help.

Each is designed to give you a balanced picture of the various strengths and weaknesses of trading a particular security or using a specific strategy in the current marketplace. Examples include:

  • Quick Take: Stock, ETF, and Mutual Fund Analysis – Pros and cons of buying or selling individual stocks, ETFs, and mutual funds. Each analysis comes complete with a Finny Score, which is not a recommendation to buy or sell – instead, it is a visual representation of the balance between the pros and cons.
  • Compare Stocks, ETFs, and Mutual Funds – Side-by-side view of two stocks, ETFs, or mutual funds of your choice, so that you can compare critical data like historical performance, expense ratios, valuation, profitability, and other financial details.
  • Alternatives and Comparables – Pulls together a list of stocks, ETFs, and/or mutual funds that are similar to the ones you are considering.
  • Top Stocks – A  roundup of the stocks that make it onto “best of” lists divided into popular categories like dividend stocks, bargain stocks, wealth creators, etc.
  • Top ETFs – A  collection of the ETFs that make it onto “best of” lists divided into popular categories, including developed and emerging markets equity, fixed income, and US equity. You can also sort by issuer, for example Schwab, BlackRock, Vanguard, and State Street.
  • Top Mutual Funds – A synopsis of the mutual funds that make it onto the “best of” lists dividend into popular categories like international equity, US equity, index funds, fixed income (taxable), and fixed income (tax-exempt).
  • US Sector Scanner – Some ETFs cover a broad swath of the market, while others focus on specific industry sectors, for example energy, finance, or technology. US Sector Scanner gives you the opportunity to compare the performance and returns of ETFs in the same sector, so you can choose the ETF that best meets your financial goals.
  • Country Scanner – If you are looking to take advantage of returns in international markets, the Country Scanner tool offers a new perspective. Compare performance and returns of relevant ETFs and ETNs to guide your decision on where to invest.
  • Large-Cap Stocks with “Unlimited” Upside – Analysts collect all available information to make their predictions about what a stock will do next. This tool puts those predictions in one place to make your life easier. Check out what industry experts are forecasting for strong companies with market caps of $10 billion or more and compare that with current stock prices to create a portfolio poised for growth.
  • Mid-Cap Stocks with “Unlimited” Upside – This tool looks at the current price of select mid-cap stocks – companies with market caps ranging from $2 billion to $10 billion – then offers you the most current information on analysts’ expectations for growth in the coming year.
  • Small-Cap Stocks with “Unlimited” Upside – Large companies aren’t the only ones that can generate value for shareholders. Many smaller companies are growing at a rapid rate. This report allows you to compare current stock prices for companies with a market cap of $300 million to $2 billion against analysts’ predictions for growth over the next 12 months.
  • Low-Cost Mutual Funds – The amount you lose to commissions and fees can dramatically affect long-term profits. This tool offers a closer look at mutual fund opportunities that limit expenses. Compare performance against the total cost of funds from major industry players like Vanguard, Fidelity, and Schwab.
  • Low-Cost ETFs – Many investors prefer exchange-traded funds to mutual funds, because they realize savings on expenses. Maximize those savings with this comparison tool that compares popular ETFs from reputable money managers like Schwab, Vanguard, and Fidelity.
  • High-Yield Mutual Funds – Comparing and contrasting mutual funds is quite a project. Obviously, you want to invest in those most likely to deliver high yields, but with so many to choose from, how can you be sure you made the right decision? The High-Yield Mutual Funds tool takes the guesswork out of buying mutual funds shares by offering comparisons within market segments, as well as across industries. This tool focuses on mutual funds that have current net assets of $1 billion or more.
  • High-Yield ETFs – Many income investors rely on exchange-traded funds (ETFs), because they tend to have lower fees than mutual funds. However, finding the one most likely to deliver strong returns can be a chore. This tool takes care of the research for you, displaying ETFs with net assets over $1 billion that have a reputation for high yields.
  • Bargain Stocks – One of the most basic tenets of investing is to buy low and sell high. That’s easier to do when you purchase shares that are priced below their value. In many cases, if you beat other investors to the stock, you will be able to sit back and watch the value of your shares rise as the rest of the market catches up. The Bargain Stocks tool uses standard valuation calculations like P/E ratios, price/book, price/sales, free cash flow, and PEG ratios to identify stocks that appear undervalued, which gives you a starting point for finding your next big winner.
  • Warren Buffett Stocks – You have likely heard of Warren Buffett, also known as the Oracle of Omaha, and you probably know he is a masterful investor. It often seems that anything Buffett touches turns to gold. Get a list of the stocks that meet Warren Buffett’s stringent criteria, then build a portfolio that is right for you.
  • Cash Cow Stocks – When free cash flows grow year-over-year, investors get excited. This tool identifies companies that have a three-to-five year history of growth in free cash flows, with cash making up 10 percent or more of total assets.
  • Overperformer Stocks – Some companies, like some people, are overachievers. They have the skill, ambition, and drive for continuous growth. This tool offers a list of companies that have made success a habit, growing their revenue for 10 or more consecutive years and delivering positive earnings along the way.
  • Benjamin Graham Stocks – Also known as “the father of value investing”, Benjamin Graham made his fortune without taking big risks. He operated on the theory that buying stocks for less than the net cash on their balance sheets was almost like getting the business free of charge. The Benjamin Graham Stocks tool gives you a chance to evaluate companies that meet Graham’s criteria. This list includes companies with lots of net cash (cash with long-term debt subtracted) – specifically, those with net cash that makes up 50 percent or more of the market cap.
  • News News News – One of the things that turns new investors off is the need to spend hours on research for each trade. Truly educated decisions require review of financial records, analyst reports, and current industry and company news from a variety of publications. This tool brings all of the most critical news together in one place, from general market developments to the latest on individual organizations. It is designed to simplify the process of staying current with the companies already in your portfolio, as well as those that you are considering for a trade.
  • Dividend Stocks – Putting together a portfolio that pays out reliably can offer you a comfortable source of income. This tool pulls together stocks that have particularly high dividend yields, with no recent history of reducing their payouts. It is updated weekly to ensure that you have the most recent information when making decisions on when and what to buy.
  • Wealth Creator Stocks – It goes without saying that as an investor, your goal is to build your wealth. This tool is designed to help you choose opportunities that have potential for strong returns in coming months and years. The criteria for being included in this category include at least 20 percent return on equity (ROE) for five or more consecutive years, as well as a positive ROE for ten consecutive years.
  • Momentum Stocks – Some stocks are relatively steady, while others surprise analysts quarter after quarter. The Momentum Stocks tools picks out companies that have managed to exceed analyst forecasts for at least four consecutive quarters, while also showing rising estimates for earnings per share (EPS). For some investors, these may offer an opportunity to get on-board with a rising star.
  • Dividend ETF Strategies – Many investors go into the market with a goal of maximizing dividends. However, this isn’t quite as straightforward as it seems on the surface. There are a number of techniques and strategies that are intended to ensure high dividends – which works best depends on who you ask. The Dividend ETF Strategies tool lets you decide for yourself. Compare performance between dividend-driven ETFs concentrating on various strategies to determine which is best for you. Examples of strategies adopted by dividend-focused ETFs include buying shares in companies that achieved the Dividend Aristocrat title, buying preferred shares in companies that pay out more to this group, or buying shares in companies that have demonstrated a commitment to consistent dividend increases.
  • Key Market Scanner – The issue with finding the right ETF or ETFs for your portfolio is that there are just so many. Picking out the one that offers maximum performance and minimum expense is a challenge. The Key Market Scanner is designed to assist with comparing ETFs in given equity and fixed income markets. That narrows down the scope of your search, which makes it easier to find the investments that work best in your portfolio.
  • Commodity Scanner – Less experienced investors often pass on opportunities for buying into commodities, because it seems awfully complicated. The Commodity Scanner takes the guesswork out of this asset class by breaking down a collection of commodity ETFs and ETNs by performance.
  • Bond Scanner – Stocks aren’t always the best way to protect your assets, as they tend to be higher risk than some of alternative options. If you want to ensure a well-balanced and diverse portfolio, you might consider adding bonds to the mix. The Bond Scanner tool gives you a clear line of sight into opportunities for investing in bond ETFs. Compare and contract fixed-income ETF performance to determine which of these products will best meet your needs.

That’s a long list of tools for a low monthly fee. When compared to other financial education and investment advice services, AskFinny offers more high-quality information at a lower price – truly a win/win. 

Keep in mind that no investment tool or resource can tell you what will happen next with a particular stock, fund, or ETF.

Automated tools, industry experts, and market analysts can only look at past performance, current financial state, and any available information about the future of the company, industry, and economy to make their guesses about where growth will occur.

AskFinny Review:
What Do People Say?

Overall, those who have subscribed to AskFinny’s premium service give it high marks, particularly around the simple, intuitive user interface. Some comments include:

  • Love it! I just checked my retirement/401K funds, and it confirmed what I suspected… that I’m investing in funds that have below average performance. Yuck!
  • Intriguing. Love the simplicity of the user interface. The big guys should learn from you…
  • Great stuff! I especially like your charts, nice visualization!

While some users would like to see the service expand into international exchanges or provide detailed information on cryptocurrency, those who have used the tools available through AskFinny give high marks for accurate, balanced information, attractive visual presentation of data, and clear, user-friendly explanations of complex financial management concepts.

AskFinny Review Summary

The bottom line is that AskFinny is worth every penny of its low subscription fee, no matter what your current financial situation looks like.

There are endless tips and tricks for getting your finances on track if you are struggling, as well as detailed, actionable advice on making the most of what you have.

You can rely on AskFinny resources for the information you need to successfully achieve your short-term and long-term financial goals.

The article AskFinny Review – Money Guides For Your Finances was originally posted on Investormint

]]>
0
Wealthfront vs Fidelity Go Comparison https://investormint.com/investing/wealthfront-vs-fidelity-go-comparison https://investormint.com/investing/wealthfront-vs-fidelity-go-comparison#disqus_thread Tue, 07 Jul 2020 12:25:23 +0000 https://investormint.com/?p=13844 Wealthfront vs Fidelity Go: Wealthfront is a fully automated roboadvisor that is best for after-tax returns while Fidelity Go is a cheaper option.

The article Wealthfront vs Fidelity Go Comparison was originally posted on Investormint

]]>
WEALTHFRONT SPOTLIGHT
wealthfront brokerage trading system robo advisor

InvestorMint Rating

4 out of 5 stars

  • Management Fee: $0 for first $10,000
  • An additional $5,000 managed free for each friend invited who signs up
  • Management Fees thereafter: 0.25%
  • Account Minimum: $500

via Wealthfront secure site

Wealthfront offers automated investment management that features low fees and a relatively high level of customization. It is aimed at millennial investors who are looking to build wealth and plan for retirement.

Wealthfront shines not only on cost but on tax impact too. Among robo-advisors, it is arguably the best when it comes to optimizing for after-tax income.

Fidelity Go is the robo-advisor arm of Fidelity and pitches itself as the “affordable money management” solution.

Here we compare Wealthfront vs Fidelity Go. Both are low-cost robo-advisors but which is best?

Fidelity Go vs Wealthfront QuickView

Wealthfront is unabashedly focused on serving passive investors. Unlike some rivals, such as Betterment and Personal Capital, who provide human advice as an option, Wealthfront is a fully automated, pure robo-advisor.

For a low fee, you get access to automated investment management and a world-class planning tool – Path.

Got more than $100,000 to invest? Wealthfront offers a proprietary mutual fund, called its Wealthfront Risk Parity Fund. Clients are permitted to deposit no more than 20% of their investments into the fund as it aims to produce higher risk-adjusted returns.

FIDELITY GO
fidelity go

InvestorMint Rating

4 out of 5 stars

  • Management Fee (retirement portfolios): 0.35% (including Investment expenses)
  • Management Fee (taxable accounts): 0.40% (including Investment expenses)
  • Account Minimum: $10

via Fidelity secure site

Fidelity Go appears to be slightly more expensive than Wealthfront at first glance. Its fees are a smidge higher initially, it would seem. But upon closer examination it turns out that Fidelity Go may actually be the cheaper option.

That’s because Fidelity’s robo-advisor solution includes mutual fund expense ratios in the overall fee. Your money is allocated to a variety of mutual funds that are overseen by a team of professionals.

wealthfront vs fidelity go comparison

Whereas most robo-advisors and financial advisors in general will separate advisory fees and expense ratios, leading to a potentially confusing calculation, Fidelity keeps it simple and bundles them both into one overall charge.

Your timeline, goals and other variables will determine which fund your money will be placed in. You can track the progress of your investments through an online dashboard, and changes can be made to your portfolio as events warrant.  For example, if you decide you want to change your allocation at any time to more suitable investment options that’s possible too.

>> Compare Wealthfront vs Robinhood

Fee Comparison

Wealthfront Fees

Wealthfront charges a fee of 0.25% of your balance at the end of each month as well as expense ratios that range from 0.08% to 0.16%.

There are no fees charged to transfer money or to withdraw money out of your account.

Furthermore, there are no commissions charged outside of the advisory fee. While you need at least $500 to invest, you will not be penalized for failing to maintain a minimum balance.

Fidelity Go Fees

Fidelity Go charges a fee of 0.35% on your balance.

You will also be assessed any fees or other expenses related to creating and maintaining your fund.

However, these fees and expenses may be refunded in some cases. This is because Fidelity does periodically receive reimbursement from the government for costs incurred maintaining its core mutual fund.

>> Acorns Vs Wealthfront: Which Is Better?

Investment Minimums

Fidelity Go Investment Minimum

There is no minimum balance needed to open or maintain a Fidelity Go account. However, your money will not be invested in any of the funds offered by Fidelity Go unless you have an account balance of $10 or higher.

If your balance is under $10, the money is placed in a variety of alternative investments, and there is no fee for having a balance of less than $10.

Wealthfront Investment Minimum

To invest with Wealthfront, you need an account balance of at least $500.

You can fund your account by transferring money from your bank or by transferring existing investments from your current broker.

Account Types

Wealthfront Account Types

If you have an existing 401(k), it can be rolled over into a Wealthfront IRA.

Traditional, Roth and SEP IRA accounts are available to best fit your needs. The SEP IRA is for those who own their own business or have self-employment income that they want to save for retirement.

Individual, joint and trust accounts are also available for those who are looking to meet financial goals outside of retirement.

Wealthfront also supports trusts and 529 college savings plans.

Fidelity Go Account Types

Fidelity Go allows a person to create either a taxable individual or joint account.

You can also choose to create either a new IRA or one using funds rolled over from another existing account.

This platform allows you to pick between IRAs that are funded with pretax or after-tax funds.

>> Fidelity Go Vs Betterment Comparison

Tax Strategy

Wealthfront Tax Strategy

Wealthfront uses tax-harvesting to help you keep more of your money, which can then be reinvested into your portfolio.

This technique involves selling assets that have lost money and replacing them with assets that have a similar profile.

While everyone will benefit from tax-harvesting, Wealthfront offers more sophisticated levels of service as your account balance grows to $100,000 or more.

Fidelity Go Tax Strategy

The Fidelity Go platform does not engage in tax-harvesting or any other strategies to actively limit how much you pay in taxes. However, the bonds that are held within a given fund could offer a variety of tax advantages.

You can contact customer support prior to opening an account to determine the tax consequences of a given fund choice.

>> Compare TD Ameritrade Vs Fidelity 

Human Advice vs Digital Advice

While both Wealthfront and Fidelity Go offer a variety of online and phone support features, neither service provides you with a financial advisor.

However, both services offer advice from financial professionals who can help you create a portfolio that best meets your needs.

Resources are available on each site that can help you learn more about how to create your portfolio or learn more about investing in a general sense.

If you would like the support of a dedicated financial advisor or two, Personal Capital is your best bet.

PERSONAL CAPITAL SPOTLIGHT

personal capital logo
InvestorMint Rating

4.5 out of 5 stars

  • Management Fee: 0.49% – 0.89%
  • Account Minimum: $100,000
  • Brownie Points: Free tools to track spending; human advisors paired with clients

via Personal Capital secure site

Tools and Calculators

Fidelity Go Tools

Fidelity Go offers the ability to manage your account online on a 24/7 basis. If you don’t want to manage your accounts, a team of professionals will do so for you.

As market conditions change, your portfolio will be rebalanced to maximize your returns and lower your risk.

You will also get access to calculators that help you determine what type of IRA or other retirement accounts to have and how much you should contribute.

Wealthfront Tools

Wealthfront has a variety of features that you can make use of such as the PassivePlus tax-harvesting tool.

If you have an account balance of at least $100,000, you can get tax-harvesting at a stock level, which can further reduce your tax bill.

Furthermore, you can get access to the Smart Beta feature that uses predictive tools to keep your portfolio protected in a variety of market conditions. The planning experience tool allows you to determine if you are ready to buy a home, retire or meet any of your other financial goals.

>> M1 Finance vs Wealthfront Comparison

Asset Classes

Wealthfront Asset Classes

If you invest with Wealthfront, you’ll be able to put your money in a variety of different asset classes.

These classes include U.S. stock, foreign stock and U.S. government bonds. If you don’t like government bonds, you can put your cash into corporate or municipal bonds instead.

Other asset class options include real estate, natural resources and dividend stocks.

Fidelity Go Asset Classes

Mutual funds created by Fidelity Go offer a mix of domestic and foreign stocks.

They also have a combination of bonds and other short-term investments.

Most bond funds will include municipal bonds whether the account is taxable or not.

>> Wealthsimple vs Wealthfront Comparison

Customer Support Comparison

Wealthfront offers multiple ways to get in touch with their customer support team.

If you don’t have an account, you can browse their article and video library, and you can also send a form message directly from the company website. If you do have an account, you can contact support by phone.

Fidelity Go has a frequently asked questions section on its website that goes into detail regarding how to create an account, what is included in a given fund and how to fund your account.

You can also choose to contact support through an online live chat or by phone.

>> SoFi vs Wealthfront: Which Is Better?

Mobile App Comparison

The Wealthfront app allows you to manage your account right from your smartphone whether you have an Android or Apple device.

The app itself is available from the Apple Store as well as from the Google Play store.

For your security, the app can be locked with a swipe of your finger or by creating a PIN number. It is updated on a regular basis to make it more secure and to add more features, and it is one of the highest rated apps in the automated investing space.

By downloading the Fidelity app, you will gain access to your Fidelity Go account and all the other tools that Fidelity has to offer.

It is also considered one of the best apps on the market and is designed to be user-friendly.

You can download it for smartphones and tablets that have both Android and iOS operating systems.

>> Personal Capital vs Wealthfront Roboadvisor

Overall Winner:
Which Robo Advisor
Is Best For You?

For most investors, Wealthfront will offer the most value for their money.

Although Wealthfront requires a larger initial deposit, the fact that it allows you to invest in a greater number of asset classes makes it easier to create a more diversified portfolio.

Plus, the presence of a robust suite of tax-harvesting tools helps you keep more of your money. That allows for a greater after-tax return on your investment, which increases your chances of meeting your financial goals.

While Wealthfront is likely the best tool for most investors looking to grow their portfolios in a passive manner, Fidelity Go has its appeal as well.

If you already have an account through Fidelity or are looking for an interface that is simple to use and understand, Fidelity Go could be the tool for you.

However, if you are looking for robust tools and features, a quality app and quality customer support, Wealthfront is the service to use.

The article Wealthfront vs Fidelity Go Comparison was originally posted on Investormint

]]>
0
How To Buy JM Family Enterprises Stock https://investormint.com/investing/how-to-buy-jm-family-enterprises-stock https://investormint.com/investing/how-to-buy-jm-family-enterprises-stock#disqus_thread Fri, 12 Jun 2020 08:36:51 +0000 https://investormint.com/?p=13815 JM Family Enterprises stock is not available to purchase by retain investors because it is a privately held company.

The article How To Buy JM Family Enterprises Stock was originally posted on Investormint

]]>
TASTYWORKS SPOTLIGHT
tastyworks logo

InvestorMint Rating

4.5 out of 5 stars

  • Commissions: All closing trades are commission-free
  • Account Balance Minimum: $0
  • Commissions: $0 flat rate for stocks

via tastyworks secure site

As a general rule, car salespeople have a bad reputation. However, there is one company that turns this common perception on its head. JM Family Enterprises.

This rare company makes the Forbes 100 Best Companies to Work For List year after year.

Simultaneously it enjoys consistent revenue growth, a dedicated and passionate team of employees, and the sort of customer feedback scores that most businesses can only dream about.

All of this success has attracted interest from a wide variety of investors, but unfortunately, JM Family Enterprises stock is not for sale on any public exchange.

The good news is that JM Enterprises offers a business model that investors can study when selecting alternative automotive stocks to add to investment portfolios.

JM Family Enterprises
Snapshot View

In the late 1950s, Toyota Motor Sales was virtually unknown in the United States.

A few California drivers were willing to test out the tiny Toyopet in 1958, but the Japanese carmaker didn’t really catch on until 1965.

That year, Toyota developed its Corona – the first design specifically focused on American drivers. By the end of 1966, Toyota sold 20,000 Coronas in the United States.

Americans were hooked on the reliability and quality of Toyota’s products, and the company hit third place on the list of best-selling import brands.

Jim Moran (1918-2007) was an entrepreneur with an excellent eye for the next big business success, and he saw the potential in Toyota vehicles.

He launched his company, and on October 26, 1968, he signed a distributor agreement with Toyota Motor Corporation to bring Toyota products to Florida, Alabama, Georgia, North Carolina, and South Carolina.

Soon after, Moran’s Southeast Toyota Distributors had 11 team members and partnerships with 42 dealerships across the five-state footprint.

>> How To Buy Cargill Stock

Toyota + JM Pontiac = JM Family Enterprises

Moran timed his distribution agreement with Toyota perfectly, as 1968 was the same year that Toyota introduced its Corolla.

Corolla went on to become the global best-selling passenger car of all-time. To date, more than 30 million have been sold worldwide. 

Within a year, Southeast Toyota Distributors was known as an industry innovator. It was first to add technology to the automotive distribution process with CARNETT – a computer system designed to link distributors with dealers.

Moran also had the foresight to add a parts division to his business, bringing in additional revenue.

In 1970, Moran expanded further, opening his JM Pontiac dealership and growing it to be the largest Pontiac dealership in the world in just 42 days. 

Those first few years set the tone for decades of success, and JM Family Enterprises continued its dramatic upward trajectory.

>> Want To Buy Shares Of Subway?

Largest Toyota Distributor Globally

Today, it is the world’s largest independent distributor of Toyota vehicles. At the end of 2018, JM reported $16.3 billion in revenue, which represented a year-over-year increase of 7.9 percent.

More than 4,300 team members support JM’s business from locations throughout North America, and the company is considered one of the best workplaces in the country.

Among other benefits, JM offers employees fully paid tuition at Florida Atlantic University.

That means any team member can enroll in online or on-campus classes at no cost to work towards certifications, undergraduate degrees, and graduate degrees.

With this sort of commitment to its employees, it is no wonder JM Family Enterprises has seen on-going success – and with that success, strong interest from investors.

>> How To Buy Enterprise Stock

car lot

When to Buy Stock in
Automotive Companies

There is a lot to consider when buying stock in automotive companies. In terms of consumer spending categories, car purchases are a large, discretionary item, so new and used car sales are directly correlated to the current economic conditions.

When unemployment is low and consumers have the cash to spare, cars are often at the top of the discretionary spending list. 

However, when the economy is struggling, unemployment is high, and people are worrying about getting bills paid, they are far less likely to make any large purchases – including vehicles.

The 2008 financial crisis was a dangerous time for the automotive industry. Unemployment was high, discretionary spending was low, and companies with any relationship to buying, selling, repairing, or manufacturing vehicles faced bankruptcy.

Without government bailouts, some of the nation’s largest automakers would have collapsed.

Those who held stock in these companies before the crisis saw share prices drop precipitously. In the meantime, new investors bought stock at rock-bottom prices, gambling that the industry would eventually recover.

>> Time To Buy Southern Glazer’s Stock?

How Car Companies Will Fare
Post-Corona

Some investors are concerned that the impact of COVID-19, including its shocking economic damage, could lead to another round of trouble for companies in the automotive industry.

After all, unemployment is at a sudden, unprecedented high, and many families are focused on getting food in their refrigerators – not buying new vehicles.

On top of that, residents in many states spent weeks under stay-at-home orders, dramatically reducing the amount of driving time.

While the automotive industry is sure to take a short-term hit from the challenges they face in 2020, most analysts believe the pain will be short-term.

The difference between the 2008 financial crisis and the 2020 economic downturn is that businesses were closed deliberately, and they will be reopened deliberately.

While sales drops may be dramatic, they will probably only be temporary. That means this could be the perfect time to buy automotive stock.

>> Is Oculus Stock Public?

Why You Can’t Buy
JM Family Enterprises Stock

Much to investors’ dismay, JM Family Enterprises remains, for the moment, a privately-held company.

That means that there are a limited number of shareholders and stock is not available for purchase by the general public.

As with all privately-held companies, JM Family Enterprises is not listed on any exchange, and there is no indication that it plans to hold an initial public offering (IPO) in the near future.

Fortunately, there are other companies in the automotive industry that are publicly traded, which means there is still opportunity to diversify portfolios by adding stock from this area of the market.

>> Where To Buy Reyes Holdings Stock?

Alternatives to Buying
JM Family Enterprises Stock

If you are interested in adding automotive stock to your portfolio, you may be able to acquire valuable shares at a discount during the current economic downturn.

You are more likely to realize increased value when you choose companies that have a strong brand and a proven ability to innovate and create the vehicles of the future.

Some of the current favorites include:

Ford Motor Company

Based on the events that occurred as a result of the 2008 financial crisis, investors learned a few things.

First, the government is not about to let this massive company go under. There are too many jobs and too much pride at stake.

Second, once it got back on its feet, Ford rewarded the investors willing to take the most risk.

Those that bought while shares were under $2 saw stock values rise an astonishing 1,600 percent. 

In this case, share prices have dropped more than 40 percent since the start of the year, and the company suspended its dividend.

The first quarter brought substantial losses as a result of the novel coronavirus. However, just before the pandemic, Ford was preparing to launch some exciting new products that appeared likely to engage consumers and drive profits – and subsequently stock prices – up.

The company says it has more than enough cash to last through the third quarter, even with factories closed, putting it in a better position than most to hit the ground running when it is safe to reopen.

Buying now puts investors in an excellent spot to profit from Ford’s coronavirus recovery plan.

General Motors

The GM story is very similar to Ford’s when it comes to managing through periods of economic turmoil.

It, too, needed a government bailout to keep from going under during the 2008 financial crisis, and it, too, enjoyed a dramatic recovery in subsequent years.

GM stock has come down by more than 30 percent since the beginning of the year, as it has also closed plants and suspended its dividend. However, GM has the financial strength to make it through another few months of plant closures if necessary, and it has its own list of exciting new products ready to launch when the time is right.

Buying discounted shares now may bring impressive rewards as the nation – and the world – recover from the pandemic.

>> YouTube Stock Buy or Sell?

The Bottom Line: How to Buy
JM Family Enterprises Stock

It’s a shame that shares of JM Family Enterprises Stock aren’t available to the public, as there are many investors who would like to add this company to their portfolios.

Fortunately, it is possible to enjoy profits from the automotive industry through some of the other companies that are publicly traded.

GM and Ford are two American favorites, and they appear fully prepared to survive the COVID-19 crisis to come out stronger on the other side.

At today’s low share prices, there may not be a better time to buy.

>> How To Buy Pinterest Stock

The article How To Buy JM Family Enterprises Stock was originally posted on Investormint

]]>
0