## Betterment: Investing in Individual Stocks
**Introduction**
**Betterment** is a leading robo-advisor that provides automated investment management services. Traditionally, Betterment has focused on offering diversified portfolios comprised of ETFs and mutual funds. However, in recent years, the company has expanded its offerings to include the ability for clients to invest in individual stocks.
**Benefits of Investing in Individual Stocks with Betterment**
There are several benefits to investing in individual stocks with Betterment:
* **Customization:** Betterment allows clients to customize their portfolios by selecting specific stocks to invest in. This provides investors with more control over their investments and allows them to align their portfolios with their individual goals and risk tolerance.
* **Diversification:** While investing in individual stocks can be more volatile than investing in ETFs or mutual funds, it also provides the potential for higher returns. By selecting stocks from different industries and sectors, investors can diversify their portfolios and reduce their overall risk.
* **Tax benefits:** When investing in individual stocks, investors may be eligible for certain tax benefits, such as the ability to offset capital gains with capital losses.
**How to Invest in Individual Stocks with Betterment**
To invest in individual stocks with Betterment, follow these steps:
1. **Create a Betterment account:** If you do not already have a Betterment account, you will need to create one. This can be done online or through the Betterment mobile app.
2. **Select your investment goals:** Once you have created an account, you will need to select your investment goals. This will help Betterment determine the appropriate risk level for your portfolio.
3. **Choose your stocks:** Betterment provides access to a wide range of individual stocks. You can search for stocks by name, symbol, or industry.
4. **Set your allocation:** Once you have selected your stocks, you will need to set the percentage of your portfolio that you want to allocate to each stock.
5. **Monitor your performance:** Betterment provides tools to track the performance of your investments. You can view your account balance, see your returns, and make changes to your portfolio as needed.
**Fees for Investing in Individual Stocks with Betterment**
Betterment charges a 0.25% annual management fee for all investments, including individual stocks. This fee is deducted from your account balance on a monthly basis.
**Considerations Before Investing in Individual Stocks with Betterment**
Before investing in individual stocks with Betterment, consider the following:
* **Risk:** Investing in individual stocks is more volatile than investing in ETFs or mutual funds. This means that your investments could lose value quickly.
* **Time:** Managing a portfolio of individual stocks requires time and effort. You will need to research stocks, monitor their performance, and make adjustments as needed.
* **Knowledge:** Investing in individual stocks requires a certain level of knowledge and experience. If you are not comfortable with investing, you may want to consider working with a financial advisor.
**Alternatives to Investing in Individual Stocks with Betterment**
If you are not comfortable with investing in individual stocks, Betterment offers several alternative investment options:
* **ETFs:** Exchange-traded funds (ETFs) are baskets of securities that trade on stock exchanges. ETFs provide diversification and low costs.
* **Mutual funds:** Mutual funds are professionally managed investment pools that invest in a variety of assets. Mutual funds offer diversification and long-term growth potential.
* **Target-date funds:** Target-date funds are mutual funds that automatically adjust their asset allocation based on your age and retirement date. Target-date funds provide a simple and hands-off approach to investing.
**Conclusion**
Betterment provides clients with the ability to invest in individual stocks. This offers investors more control over their investments and the potential for higher returns. However, it is important to understand the risks and considerations involved before investing in individual stocks. If you are not comfortable with investing, Betterment offers several alternative investment options.