Think what does betterment invest in is too hard or too time consuming? Betterment uses really sophisticated computer programs to figure out the best — and cheapest — fund mix just for you.
You answer a few basic questions and then Betterment does all the work by actually investing your money and monitoring it over time. The way people invest is changing dramatically,” says CEO and founder Jon Stein. I started Betterment to re-invent the investing industry so that it would work as we want it to. And yes, the company uses computers a lot, but customers can still call or email Betterment seven day a week and get a real human. Open a high yield account today!
Terms under which this service is provided to you. This is a terrible way to invest. But after a few early financial haircuts and the subsequent 20 years of reading an investment book or two every year, I’ve come to appreciate the much more boring and successful strategy of extremely long-term investing in extremely low cost index funds. Nowadays, I don’t just avoid trying to guess the short-term movements of individual stocks. I avoid looking at financial markets and news entirely, for weeks or months at a time.
This is a much better way to invest. In fact, doing just this will not only put you ahead of most average Joes, but you will also beat the vast majority of expensive personal financial advisers and professional investors as well. The reason is simply that you minimize the main sources of potential loss: human error and our flawed boom-bust psychology, fund fees, capital gains taxes, and broker commissions. 1: A few asset types with expected annual return after inflation. You can see that we’re already up near the top of the chart. You can improve slightly on buy-and-hold-forever investing, but at this point it starts to take some work. To really beat it, you need to be a lifelong business prodigy who devours financial statements and human psychology in equal parts for most of your lifetime.