Investing does not need to be a stress-inducing event in your life with the modern Robo Adviser. You do not need to be someone with a finance degree, or someone who dedicates their weekends researching stock fundamentals, or even pay a so-called “professional” to have market returns and ensure your fair share of the growing world economy. It is the new age of the “robo adviser”, we no longer need to be price-gouged with overpriced mutual funds and fund managers. With a robo adviser, anyone with a bit of spare cash can start growing their net worth by tucking away little by little.
In my opinion, the best way to go about using such a robo-adviser is Wealthfront. Investing cannot get easier than this. All you have to do is open the account and deposit some cash. The overall fee is .25% per year which is unheard of and unmatched by any other brokerage. I have been personally using Wealthfront for the past 2 years and I cannot praise it enough. They have great customer service, a handsome interface both on the app and computer, and a myriad of investing tools you can pick and choose to maximize your growth.
Robo Adviser Strategies…
The investment strategy tools you are offered on Wealthfront are as follows according to Wealthfront:
- Tax-Loss Harvesting: “Tax-Loss Harvesting takes advantage of movements in the markets to capture investment losses, which can reduce your tax bill, leaving more money to invest.”
- Stock-Level Tax-Loss Harvesting: “Stock-level Tax-Loss Harvesting is an enhanced form of Tax-Loss Harvesting that looks for movements in individual stocks to harvest more tax losses and lower your tax bill even more.”
- Smart Beta: “Smart Beta is designed to increase your expected returns by weighting the securities within the US stock index more intelligently. “
- Risk Parity: “Risk Parity seeks to increase returns at your risk level and smooths your ride by adding a Wealthfront mutual fund that balances risk evenly across asset classes. The fund fee is 0.25%, increasing the weighted average fund fee of our portfolio by 0.03%.”
Wealthfront Equity Types…
The cool thing about Wealthfront is that you can take a test to determine your risk tolerance while investing. Once you pick how risky or safe you want to be with your investments, the cash you deposit is split amongst 6 types of equities including U.S. Stocks, Foreign Stocks, Emerging Markets, Dividend Stocks, Natural Resources, and Municipal Bonds. The percentages of each of these equities is based on your risk tolerance score.
Wealthfront Account Types…
There are many types of accounts you can open with Wealthfront including High-Interest Cash, Taxable account, Tax advantaged accounts such as IRAs, and 529 college savings account. You can also link all of your assets (savings accounts, other brokerages, credit cards, etc.) to Wealthfront and it will create a net worth trajectory for the rest of your life (until age 92). It will calculate your net worth growth, retirement nest egg, safe withdrawal rate, and other financial milestone markers.
I can keep going on and on about Wealthfront, but I think this should be good for now. I can make a part two of this if people like this post.
Read my previous post here.
-E J
