In the fast-paced world of finance, investors are increasingly embracing automation to streamline their investment strategies. Betterment offers a comprehensive approach toautomated investingthat transcends traditional DIY methods, aiming to enhance financial returns while minimizing the effort required from investors.
This article explores three key benefits of automating your investment strategy: tax savings, streamlined navigation, and peace of mind. Understanding these advantages can empower you to make informed decisions about managing your portfolio.
Tax savings: keeping more of your earnings
A significant benefit of automated investing is the potential fortax optimization. Reducing taxes on investment gains can substantially increase Betterment’s managed portfolios employ advanced trading algorithms that maximize tax efficiency, a task that can be quite challenging when done independently.
For example, ourTax Coordinationfeature strategically allocates assets across various account types, including traditional IRAs, Roth IRAs, and taxable accounts. This approach ensures that your investments can grow tax-free for as long as possible. Furthermore, we provideautomated tax-loss harvesting, which identifies losses that can be utilized to offset gains, allowing more funds for reinvestment rather than tax payments.
Success stories of tax-loss harvesting
The effectiveness of our tax-loss harvesting was clearly demonstrated during market fluctuations in Spring 2026, where we successfully harvested nearly $60 million in losses for our clients. This proactive tax management strategy enables nearly 70% of users employing this feature to offset their advisory fees solely through the savings generated. With upcoming enhancements like direct indexing, our tax optimization capabilities are set to expand further.
Navigation: staying on course with your investments
Managing investments can lead to distractions that divert you from your initial goals. Life’s demands can pull your portfolio away from its intended path. Automated investing helps keep you focused with minimal effort.
At Betterment, algorithms automaticallyrebalanceyour portfolio, ensuring your risk level aligns with your investment objectives. As your goals evolve, our system adjusts asset allocation, reducing risk exposure as you approach your target date without requiring constant oversight.
Benefits of a diversified portfolio
Our portfolios are globally diversified, allowing you to take advantage of growth opportunities in international markets. We also encourage regular contributions, which can help you acquire more shares when prices are low—a strategy known asdollar-cost averaging. Research from Morningstar indicates that investors who contribute regularly can achieve up to 4% higher annual returns compared to those who do not. By automating these processes, Betterment makes it significantly easier to stay on track.
Calm: preserving your time and mental well-being
Beyond financial advantages, automating your investments offers invaluable peace of mind. Our system can save you time—potentially two hours for each rebalancing session—allowing you to focus on what truly matters in your life.
Investing can be stressful, especially amid constant news cycles and market volatility. While we cannot eliminate all concerns, our technology empowers you to build wealth confidently and effortlessly. Most of our clients prefer to keep the majority of their investments managed rather than self-directed, using self-directed options to explore new opportunities.
This article explores three key benefits of automating your investment strategy: tax savings, streamlined navigation, and peace of mind. Understanding these advantages can empower you to make informed decisions about managing your portfolio.0