It’s never been easier to start investing. You don’t need to learn a bunch of technical jargon in order to begin building your portfolio. With robo-advisors, like Wealthfront, you can enter the market with as little as $500 and build out a diversified portfolio quickly and easily. Check out our Wealthfront review below.
What is a robo-advisor?
A robo-advisor is an Internet-based portfolio management platform. These robo-advisors have been sprouting up like crazy over the last couple of years. They use computer formulas to design a portfolio for each customer based on their risk tolerance. Because of that, they are able to offer investment services for considerably less than a traditional human financial advisor.
Many robo-advisors also offer great extras with their service that were only available to the wealthiest of investors, before. As an example, Wealthfront offers automatic tax-loss harvesting on even the smallest balances.
Wealthfront review
Wealthfront does a great job shrinking the barrier of entry into the market for the normal person. The sign-up process is quick and the risk questionaire guide your investment selections. Unlike the traditional 1% fee charged by many human advisors, their management fee is only 0.25%. Also, they provide automatic tax-loss harvesting and automatic rebalancing. There is a minimum account balance of $500, which may be off-putting to some investors.
Wealthfront is one of the top robo-advisors in the industry, competing mainly with Betterment. Opening your account begins with a questionnaire used to determine your risk tolerance. After that, they invest your money in a variety of exchange-traded funds (ETFs) in several asset classes. As you receive dividends, make deposits or withdrawals, or experience market fluctuations, Wealthfront rebalances your account to match your risk tolerance.
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