In the current financial landscape, many investors seek independence in managing their portfolios. A recent survey by Betterment indicates that 75% of their customers participate in some form of self-directed investing. This trend underscores a growing desire among investors to take control of their financial futures while still benefiting from a comprehensive platform.
Betterment, known for its automated investing solutions, recognizes the importance of providing clients with the flexibility to make their own investment decisions. This article explores how Betterment supports self-directed investing and highlights what differentiates it from traditional trading platforms.
Betterment’s self-directed investing approach
Betterment merges award-winning technology with a customer-centric experience in self-directed investing. Users can buy and sell thousands of stocks and ETFs without incurring commissions, offering extensive options. Investors benefit from the convenience of viewing all their assets in one place, along with unique tax insights that enhance decision-making.
Why investors choose self-directed options
Investors pursue self-directed options for various reasons. Some aim to invest in companies that reflect their personal values, while others enjoy the intellectual challenge of market analysis and trading. Additionally, having direct control over one’s portfolio can be gratifying. Betterment addresses these diverse needs by providing a platform where investors can manage both their automated portfolios and self-directed trades.
Tax implications and Betterment’s unique solutions
Self-directed investors often face challenges related to unexpected tax liabilities, particularly on traditional trading platforms. Betterment has tackled this issue by introducing a tax impact preview feature. Before executing a sale of a stock or ETF, users can assess how their transaction may impact their tax situation, including alerts about potential wash sales. A wash sale occurs when an investor sells a security at a loss and subsequently repurchases the same or a substantially identical security within a 30-day period, which can disallow tax deductions on that loss.
Making informed decisions with tax insights
With Betterment’s tax impact preview, investors can make informed decisions without concerns over unforeseen tax consequences. This transparency enables users to navigate the complexities of self-directed investing with greater ease and confidence.
In addition to tax insights, Betterment offers a comprehensive view of all investment accounts, allowing users to manage both automated and self-directed investments seamlessly. By consolidating everything under one platform, Betterment ensures that investors can easily evaluate their overall financial health.
Getting started with self-directed investing
For those eager to begin their self-directed investing journey with Betterment, the process is straightforward. Here are three essential steps to consider:
- Set your investment goals: Understand what you wish to achieve through investing, whether it is long-term growth, retirement savings, or socially responsible investing.
- Explore investment options: Utilize Betterment’s resources to research stocks and ETFs that align with your objectives.
- Leverage technology: Use Betterment’s platform to manage both automated and self-directed investments effectively.
Betterment stands out in self-directed investing by offering a blend of flexibility, comprehensive tools, and critical tax insights. By fostering an environment where investors can confidently manage their portfolios, Betterment empowers users to take charge of their financial futures while minimizing potential pitfalls.