Starting to invest can feel intimidating due to the myriad of details involved. This fear often deters many from taking the first step on their investment journey. However, the initial stages of investing can be significantly simplified.
This is where robo-advisors play a crucial role. I personally benefited from this when I resumed investing post-divorce. I lacked the time and energy to navigate the complexities of the investment world. Robo-advisors not only made the process straightforward, but they also charged low fees. To assist you, I’ve compiled a list of six top-performing robo-advisors for investing online.
1. ACORNS
I have been employing Acorns for some time now as an investment supplement. Acorns is user-friendly and I appreciate their round-up feature. With just $1 monthly for the basic account, you will own a taxable investment account. You can’t choose specific stocks or mutual funds with Acorns, like with other robo-advisors. However, it assigns you an account based on a questionnaire filled at the time of activation. This feature can be modified according to your risk-tolerance on their platform. The barrier to entry is low as there’s no minimum initial deposit.
2. BETTERMENT
Betterment, another outstanding online robo-advisor, helped me reignite my retirement plans after my divorce. They operate similarly to Acorns regarding account setups and their aggressiveness is adjustable on their platform. However, no individual stocks or mutual funds can be selected. They charge very low fees and handle the account rebalance for you, and there is no minimum balance to initiate an account. I appreciate that they allow you to open different types of accounts. I had a Roth IRA and a Traditional IRA with my Betterment portfolio.
Nevertheless, you should be aware that most of these robo-advisors do not participate in the extensive ETF system as larger investment firms do due to annual fees. This implies that they perform transactions through checks, not wire transfers, which could delay the process and potentially miss out on market opportunities.
3. M1 FINANCE
M1 Finance is a standout robo-advisor due to its diverse options and functionality. It requires a $100 initial deposit and can be managed online or on a mobile app. You also get the option to choose from over 6,000 individual stocks or ETFs, unlike other robo-advisors.
4. ROBINHOOD
Robinhood allows zero interest trading with no starting investment. You can manage your portfolio via desktop or mobile, offering great convenience. They aim to educate you into becoming a more knowledgeable investor, and they reward you with a free stock when you sign up.
5. SOFI
Sofi allows you to initiate an account with merely $100. As a Sofi client, you have free access to their financial planners. They recently started offering partial stock and ETF share purchases. They even provide free money for more stock purchases if you open a checking account with them.
6. STASH
With Stash, you can commence investing with as little as $5. They have a mobile application so you can manage your investments on the go. They also offer a debit card that earns you extra shares in stocks.
Remember, not every robo-advisor will suit everyone. Thus, the first step is researching the different options and finding ones that align with your investment style. The robo-advisors you may like to consider include:
Acorns, Betterment, M1 Finance, Robinhood, SoFi, and Stash.
Once you’ve chosen the one that fits, it’s time to take the leap. There’s no better time than the present to plan for your future. Which robo-advisors have you tried and what were your experiences with them?
