As I stated in a previous blog post, I don’t have the risk tolerance or patience to invest in individual stocks. I have a handful of stocks in an old rollover IRA, but I do not actively trade them. They were all bought when the market was at a low, around 2009, and I have just held them. The majority of my investments are in 401k or my Betterment account. You may be wondering why I chose Betterment? I evaluated several investment platforms and found the simplicity and features of Betterment to be more to my liking. For those of you who may not be familiar with Betterment, it is a Robo-advisor platform. For people like me, who don’t want to spend hours and hours evaluating and tracking investments, Betterment asks you a few questions and then selects the best investment portfolio for you. It also has tax loss harvesting tools built in which will select the best options when you start your withdrawal process or need to sell for tax purposes.
Betterment uses a mixture of stocks and bonds to help flatten out the bumps when the market is volatile. Based on your years till retirement and risk tolerance it will advise you on the right mix for your situation. It will also auto adjust your mix as you get closer to retirement. Since I have the majority of my retirement savings in 401k, and use my Betterment account for early retirement savings, my risk tolerance is a little higher on this platform. I maintain a 90/10 split between stocks and bonds with no auto adjustment. I may change my tune if market conditions change. Betterment does a good job of allocating my investment into multiple Exchange Traded Funds (ETF’s). These ETF’s allow you to invest in multiple companies with a single stock purchase. Betterment also reinvests my dividends and takes care of rebalancing my portfolio.
Disclaimer: I am not a licensed financial planner or tax expert. Any views expressed are my own and based on what I have learned on my financial journey. Please do your own research before making important financial decisions.
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