I've had a bunch of friends ask me what they should use to manage their money and if they should be adding to their investments given the recent correction in the markets. I know there are a ton of apps out there and lots of articles reviewing each of them, but at the end of the day, most of them are just shameless promotions.
As a lifelong investor who's used basically every investing app under the sun, from robo advisors to stock trading apps, I've discussed the options with a lot of people (from novices to professional money managers). From these conversations and my personal experience, I have a good sense for what people need at certain levels of investing experience, wealth, etc.
This post will dive into the top tools I've found for investing. I'm always open to trying new apps, so if there are any I haven't listed here that solve a big pain point for you or someone you know, I'd love to hear about them.
Robo-Advisors - "I just want to set it and forget it"
If you see investing as a chore, a passive robo-advisor is probably for you. These platforms are for people who want to "set it and forget it" instead of actively managing their own investments. A robo advisor is a way to automate your investments via a computer algorithm. A robo-advisor may also include human financial advisors but only for services that require human assistance (e.g., taxes, retirement or estate planning).
"Robos", as they're often called, are generally opposed to active investing -- they believe that picking stocks may be exciting, but is virtually impossible to outperform the market in the long run. That doesn't mean you can't invest in single stocks yourself on another platform like Robinhood or Etrade -- it just means robos are for hands-off investing.
There are a lot of robos, but I like Wealthfront the most (Betterment a close second).
Wealthfront: a robo that emphasizes low fees and automated investing.
They have no minimum investment, charge 0.25% annual fee on your assets, and are 100% automated (i.e. no human assistance). Wealthfront supports pretty much every account type, including personal investment accounts, IRAs, 401(k)'s, and more. If you're a millennial looking to get invested in the market with your cash savings, for example, you'd choose the individual account option.
The pro is their low fee and automation, but the downside is that they no longer manage your first $10K for free. Also, they've been sending conflicting messages recently, such as offering a higher-priced mutual fund type product and auto-opting their users into it (despite hating on active investing for years). Overall, Wealthfront wins the pure passive robo race in my view, based on their great tech and low fee. It just gets the job done.
Active Managers - "I want to invest more actively, but have someone manage my money"
If you want to invest more actively in the markets but don't want to make all the investing decisions yourself, then active managers are for you. Actively managers are platforms managed by humans (or sometimes software) that actively invest your money in specific securities, like tech stocks or commodities, for example.
Hedge funds, for instance, are active managers, but they're only available to accredited investors and have high minimum investments (usually $1M+) making them inaccessible for most people.
Historically the only active managers available to most people were mutual funds. A mutual fund is a professionally managed portfolio of stocks and/or bonds, organized around a specific strategy (such as large-cap growth).
There are a few cool new platforms springing up that are reimaging the space, especially for millennials. My favorite is Titan.
Titan: a new mobile investing platform that automatically invests your money like the best hedge funds.
Their software scrapes the public filings of top hedge funds and then invests your money in their best picks. They also have a human research team (Wharton, Stanford guys) that explains everything to you along the way, such as the hedge fund thesis on a given stock.
They have a $1,000 minimum investment and charge 1% of your assets per year, with no lock-ups on your money. Given the strong performance I've had since investing in Titan and also the content they give me inside the app, I'm fine paying the 1%. It beats all of the mutual funds out there charging 1-2% for a black box strategy.
The pro is their product (beautiful UI, easy to use) and investment strategy (high ROIC equities, sourced by top hedge funds). The con is that their features are somewhat limited right now, but I use Titan for most of my equity investments (alongside my Robinhood account) and have started using them in the morning instead of reading the WSJ & Bloomberg.
Do-It-Yourself (DIY) Platforms
If you want to take the reins and make all the investing decisions yourself, then a DIY platform (i.e. brokerage) is right for you. Brokerages have been around for many decades and include companies like Etrade, Fidelity, TD Ameritrade, and in the last few years, Robinhood.
With DIY platforms, you choose the stocks, bonds, options, ETFs, etc. Most people have no idea what they're doing when they pick stocks themselves, but they deserve the freedom to express their own identity and views on specific companies.
My favorite brokerage is Robinhood, but there are new alternatives popping up frequently. M1 Finance is an up-and-comer worth trying out.
Robinhood: the first zero-commission brokerage that makes it completely free to start trading stocks, ETFs, options, and now cryptos, all with no fees or minimum investments.
Robinhood has one of the best user experiences I've seen. They've won an Apple Design award and are known for their sleek mobile app. They used to be mobile-only, but recently they've added options, cryptos, and a desktop app.
The pros are obviously zero fees, a beautiful UI, and an increasing amount of investment products I can trade. The cons are the customer support (very slow, generally just refer me to their help center articles), lack of fractional shares (you still need $1000+ to buy a share of Google), and lack of content alongside my portfolio (they re-post lots of Yahoo Finance articles inside the app which I find pretty useless). Net net though, Robinhood is still my brokerage of choice.
Honorable mentions:
-
Betterment - Wealthfront competitor
-
Stash - Robinhood for those with less expertise
-
M1 Finance - recently went completely free
-
Acorns - good for your spare change
Hopefully this has been a helpful summary of my views on top investing apps. Personally, I have my IRA money on Wealthfront, which I won't touch for the long term. I have most of my equity investments in Titan, with some select stock positions on Robinhood for companies I have a specific view on. I've found this mix to be optimal for me (a millennial who enjoys investing but doesn't have time to actively trade all day).
Happy investing.
Submitted April 10, 2018 at 06:14AM by day1labs https://ift.tt/2Hpo4I0
