A recent survey indicates that a significant 75% of Betterment customers are engaging in self-directed investing. This trend reflects a growing desire for individual control over investment decisions, despite the availability of automated tools that promise simplicity and efficiency. In response, Betterment has developed features that empower users to manage their investments while leveraging the advantages of a comprehensive platform.
Enhancing investment control
Betterment’s approach to self-directed investing integrates a user-friendly interface with the ability to trade thousands of stocks and ETFs without incurring commission fees. This feature enables users to diversify their portfolios seamlessly, while maintaining the convenience of a single platform for all financial activities. By combining self-directed trades with automated portfolios and cash accounts, users gain a holistic view of their financial landscape.
Tailored investment experiences
Investors have varied motivations—some are driven by a passion for supporting companies they believe in, while others relish the intellectual challenge posed by market dynamics. Many seek greater ownership of their financial future. With Betterment’s self-directed investing options, users can customize their investment strategies to align with personal goals and preferences, ensuring a more satisfying investment experience.
Navigating tax implications
A significant challenge for self-directed investors is the complexity of tax implications. Traditional trading platforms can leave users facing unexpected tax bills at year-end due to frequent trading activities. Betterment aims to mitigate this issue by offering a tax impact preview feature, which informs investors about the potential tax consequences of their trades before execution.
Understanding tax impact previews
This preview helps users understand how a sale of stocks or ETFs may influence their tax situation, including the implications of potential wash sales. A wash sale occurs when an investor sells a security at a loss and repurchases it within a specified timeframe, potentially disallowing the tax deduction for that loss. By utilizing Betterment’s tax impact preview, investors are equipped with the necessary insights to make informed decisions, thereby minimizing surprises and enhancing their overall investment strategy.
Steps to get started with self-directed investing
For those interested in self-directed investing, Betterment provides a clear pathway to begin. First, consider your investment goals—understanding your objectives is essential. Next, explore the extensive range of available investments on the platform, and finally, initiate trades that align with your personal strategy.
Betterment’s self-directed investing options offer a blend of flexibility and insightful tools that cater to a diverse group of investors. Whether one aims to take control of their portfolio, navigate tax implications, or explore new investment opportunities, Betterment provides the resources necessary for a successful investing journey.