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The Right Way to Gauge Investment Returns
Of course you know what your portfolio earns. Or do you? Here’s the best way to gauge your returns, so you always make the smartest choices. Did you know that most investors don’t know their own...
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Portfolio Optimization: Our Secret to Driving Better Performance
We optimally blend funds to deliver higher expected investor returns for each asset class and ensure you get the best possible performance from your investments. Many investors use a combination of...
View ArticleWhere in the World Are You Invested?
Betterment’s portfolio diversification includes holdings across 102 countries. Explore where your money is invested. One of the fundamentals of good investing is good diversification. But it’s hard to...
View ArticleHow to Make a Tax-Smart Investment Switch
A customer once called us to discuss moving significant assets from another provider to Betterment. He asked if he would have to pay a one-time tax cost to liquidate, and considering that cost, would...
View ArticlePortfolios Now Include Municipal Bonds
We added a municipal bonds asset class to make your non-IRA portfolio even more tax efficient. In our ongoing efforts to create the most tax-efficient portfolio possible for our customers, we have...
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9 Reasons Goal-Based Investing Leads to Success
Defining goals enables better wealth management. Here’s why. Before you start putting money into the market, ask yourself one question: What exactly are you saving and investing for? This is a serious...
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Advice for a Market Downturn: Have a Calm Heart and Clear Mind
The markets have been on a tear following the recovery from the financial crisis—with some pundits saying a market correction is due. Here’s how to prepare yourself. It’s a fact that people make...
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High-Frequency Monitoring: A Short-Sighted Behavior
Investing is a rare case of generally earning more by working and stressing less. Our advice? Take a vacation from monitoring your returns. There are 10 million bits of information moving through this...
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It’s About Time in the Market, Not Market Timing
Amongst all the edicts investors should heed, one stands out above all others: It’s time in the market that builds returns, not market timing. We’ve illustrated this rule with one of the...
View ArticleQuiz: How Easy Is It to Beat a Buy-and-Hold Portfolio?
Headlines and market news can inspire investors to take all kinds of actions. Surely, news about oil prices dropping means it’s a good time to gobble up gas company shares at a discount price, right?...
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Why the S&P 500 Is a Bad Benchmark
Using a regional benchmark to look at your portfolio of global holdings doesn’t provide an accurate picture. Here’s why. Are you tall? Your answer to that will likely depend on your own personal...
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The Real Cost of Cash Drag
Cash has a significant chance of a real negative return over time due to inflation risk. Cash assets can present a conflict of interest when the investment manager is advising cash and then...
View ArticleThe Hidden Costs Inside Mutual Funds
They say you get what you pay for, but sometimes you don’t. Even when you do, you may not understand how much you had to shell out and exactly what for. In the case of mutual funds, you may have to pay...
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Currency Risk Does Not Belong in Your Bond Portfolio
When you buy things in a foreign currency—whether that’s goods and services as a traveler, or stocks and bonds as an investor—you are faced with a central issue: How far will your dollar go? Exchange...
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Stop Worrying and Learn to Love Rising Interest Rates
Contrary to conventional wisdom, rising interest rates can be good for a bond portfolio. Investors might think otherwise because of the mechanics of basic bond math (‘when rates go up, yields go up and...
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Why Your Index Fund Has a Different Return Than Its Index
When it comes to your returns, indexes matter. But the fund you choose to mimic that index matters even more. Index funds are turning 40 this year, but they’re hardly over the hill. In fact, quite the...
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What To Do After A Market Drop
A sharp fall in stock prices, as we’ve seen recently, is usually accompanied by scary news headlines and red numbers. Modern media wants clicks and attention, and, unfortunately, fear sells. It’s hard...
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Eliminating the Black Box: How We Automated ETF Selection
This article was co-written by Ellie Lan, an Investment Analyst at Betterment, and Dan Egan, Betterment’s Director of Behavioral Finance and Investing. When you use algorithms and data to make...
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Why Comparing Returns Is a Bad Way to Choose an Investment Manager
The greatest trick the stock market ever pulled was convincing investors that historical returns are predictive. They aren’t. In fact, historical returns not only give you very little information about...
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The Forward Curve: How Betterment Forecasts Interest Rates
Does your automated investing service regularly update its forecasted future risk-free rate assumption? At Betterment, the answer is yes, on a quarterly basis. The SEC and FINRA issued an alert in May...
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The ETF: Portfolio Management’s Best Tool
This article was co-written by Ellie Lan, an investment analyst at Betterment, and Dan Egan, Betterment’s Director of Behavioral Finance and Investing. When John Bogle, Vanguard’s founder, pens an...
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Debunking Myths About ETF Liquidity
What exactly happened with ETFs on Aug. 24? Here’s what: A sequence of global volatility, trading disruptions, and thoughtless selloffs. We break down what happened and why. On Aug. 24, 2015, the Dow...
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Experiencing Short-Term Losses Is a Part of Long-Term Gains
Far from unusual, downturns are an integral part of even the highest returning investments. Customers are often surprised when I say that I expect losses in the Betterment portfolio. No, I’m not a...
View Article4 Myths About Diversification
When you invest, it’s good to mix things up. Diversity applies to many things in life—our friends, our colleagues, food, and sports—but it is most well known in the context of investing, and it’s...
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When Is the Best Time to Invest in the Stock Market?
There’s a saying we at Betterment love: Stock market pundits have successfully predicted 20 out of the past two market crashes. If you listen to the media, they’d have you think that there are dozens...
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How Disciplined Will You Be in the Next Downturn?
I can’t take any further losses. I’m just not comfortable with losing 8% of my money in one year. I’ll start thinking about more aggressive investments when the dust settles. The stock market is...
View ArticlePersonal Investing Strategies Tailored For You
We believe that truly optimal wealth management is always personal. A holistically optimal investment recommendation includes the investor’s circumstances, goals, personality, and views. At Betterment,...
View ArticleWhat Our Investment Philosophy Means for You
Betterment has a singular objective: to help you make the most of your money, so that you can live better. Since our start in 2010, we have developed a range of products and services in pursuit of this...
View ArticleAdvancing the Betterment Portfolio Strategy
At every stage of the investing process, Betterment holds to the same basic philosophy: We use real-world evidence and systematic decision-making to increase the take-home value of our customers’...
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How Does Betterment Calculate Investment Returns?
Investors often want a simple answer to a seemingly simple question: how is my money doing? While it’s relatively easy to calculate any one performance figure, understanding it and knowing how to use...
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How Much to Save: Our Advice Guides You Towards Your Goals
Voyager 1 and Rosetta were two very different space probes that achieved their missions in my lifetime. How they accomplished their missions is a lesson in planning. Voyager 1 was a bullet. Aim. Adjust...
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Benefits Of An Early IRA Contribution
Time and time again, Betterment and many other financial advisors highlight the overwhelming evidence that market timing doesn’t work. But there’s one exception—contributing to your IRA as early as...
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Lifestyle Creep: The Biggest Threat to Financial Planning
For the median person making $57,000 a year, it sounds ludicrous that others making $500,000 feel like they’re ‘scraping by.’ However, they’re humans just like us: we might find ourselves in a similar...
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Reducing Your Biggest Retirement Expense: Where You Live
Every August my family and I would squeeze into our car and drive 18 hours straight from Philadelphia to visit my grandparents in retirement. They had picked an ideal “grandparent” location: Cocoa...
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How Checking Performance Might Hurt Your Performance
I believe most people check on their investments far too often. If they fully understood them, they’d spend less time monitoring their accounts, and more time gaining knowledge about investing. Don’t...
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Funding a Safety Net: Calculate Your Target Amount
How much do you actually need to set aside for emergencies? No one can predict the exact timing or cost of future emergencies any of us will face. However, we’ll provide recommendations to help you be...
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Safety Net Funds: Why Traditional Advice Can Be Wrong
We recommend that everyone should save regularly towards some kind of safety net based on their monthly expenses. Conventional wisdom says that safety net funds should be held in a savings account or a...
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You Can Now Skip Individual Auto-Deposits
It gives me great joy to announce that you can now skip any individual auto-deposit before it happens. We’ve heard scenarios like this many times: I have an unusually high credit card bill I want to...
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Using Investment Goals At Betterment
TABLE OF CONTENTS What is goal-based investing? Goals and Investment Accounts at Betterment Retirement Savings Retirement Income Safety Net Major Purchase General Investing How to Set Effective Goals...
View ArticleVideo: The Market Is Volatile—What Should I Be Doing?
If you’re looking for more guidance, we’ve got you covered with our guide to stock market volatility. Not a customer yet? Get started Transcript “Hey everybody. Dan Egan from the Advice and Investing...
View ArticleVideo: How Does Betterment Move My Money?
If you’re looking for more guidance, we’ve got you covered with our guide to stock market volatility. Get that $ moving Start here Transcript “Hey everybody. Dan Egan from the Advice and Investing...
View ArticleVideo: How Can Tax Loss Harvesting Help?
If you’re looking for more guidance, we’ve got you covered with our guide to stock market volatility. Not a customer yet? Get started Transcript “Hey everyone. Dan Egan from the Advice and Investing...
View ArticleHow Betterment’s investment approach helps 401(k) investors
Questions & Answers How should plan sponsors think about the investment funds within a 401(k)? People may be surprised to hear this, but aside from avoiding high-cost funds, the specific funds in a...
View ArticleBetterment for Advisors Case Study Q&A: How Ritholtz reaches a new client...
Dan Egan, Head of Behavioral Science at Betterment, recently interviewed Matt Lohrius, Advisor and CFP® at Ritholtz Wealth Management, who oversees the Liftoff platform that was introduced several...
View ArticleMemestonks: What’s Different About This Market?
Let’s talk about this whole GME/short-squeezing/meme stock thing. Like many people, you may have a simple question: Is this time different? Here’s my impression: Most things are the same… In many...
View ArticleBetterment’s 401(k) Investment Approach
Dan Egan, Betterment’s VP of Behavioral Finance and Investing, explains why Betterment’s investment approach is effective for all 401(k) participants Investment Approach Q&A Betterment’s 401(k)...
View ArticleQ&A: What’s The Future Of Investing?
Millions of people are jumping into the stock market. We’re here for it. It seems easy. It can be fun. Isn’t it for everyone? Plus, you never know when you could take a little play money, trade a hot...
View ArticleWe Built A Better Bond Basket
This fall we are re-optimizing our portfolio and have been blogging about the benefits for our customers. In a related post, we explained how the new portfolio mix is likely to boost expected returns...
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Diversification and Performance: Two Portfolios
In an all index-fund portfolio like Betterment’s, enhanced performance comes from finding and making the most of a diverse set of assets. The investing world abounds with simple formulas for...
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