There is a large segment of the population who neither wants to pay thousands of dollars to an anonymous investment manager nor take an active role in trading the markets. This is why, in the 2020s, we saw the rise of automated investments.
Otherwise known as robo-advisors, these investment platforms come with tailor-made portfolios; many of them use artificial intelligence. All you have to do is select your goals and your tolerance for risk. Make a deposit and the platform will handle all your investments on your behalf.
M1 Finance’s “Pie” strategy is a unique investment approach. Let’s see how the people of central Oregon can use it to their advantage.
You can also check this large M1 Finance magazine for more information on this automated investment platform.
What is the pie approach?
M1 Finance helps you create your portfolio using a pie. Think of a normal Camembert. This is your wallet. Each slice of this cake is a different asset.
This method of viewing your investments makes it easy for you to get an overview of your portfolio and balance it according to your risk tolerance.
The M1 Finance platform offers you the following types of assets in which to invest:
Although the platform does not support mutual funds, these asset classes offer more than enough for the majority of novice investors.
Every time you invest in a certain asset class, the pie automatically rebalances itself to meet your target allocations. The platform will do this on your behalf, so if you invest in stocks but your target allocation for bonds is 20%, your pie will still be rebalanced to reflect this.
Become fully automated with Expert Pies
What sets M1 apart as one of the best robo-advisers available for Oregonians today, it’s that investors who don’t know anything about the markets can still make smart investments. M1 offers what it calls “expert pies” to its new investors.
These are created by humans using quantitative analysis to determine the best ETFs, bonds, and stocks for each pie.
Some of the expert pies you can choose from include:
- General investment.
- Retirement investment.
- Responsible investment.
Take a look at these pies and determine if their allowances are for you. You are not blocked if you choose one of these wallets. You can take their template and customize it according to your needs.
However, these wallets are so well organized that most investment guide would agree with their current arrangements. Only personalize if you are confident in your skills.
The costs of pie investment
For most M1 investors, a basic investment account is more than enough. There are no monthly fees, no minimum balance, no trading fees and a 0.00% management fee.
When compare M1 Finance and other platforms, this is one of the most profitable ways to invest.
M1 Finance earns its money by offering checking accounts, lines of credit and an improved system known as M1 Plus. These are very specific services and are not essential for most investors.
When you decide to invest, be aware that these are the minimum investment amounts for each type of account:
- $ 100 for a standard investment account.
- $ 500 for a retirement investment account.
You will only be asked to respect this minimum when you decide to invest.
What’s the best way to diversify my portfolio?
It has always been a source of conflict. The old one financial advice on stocks going that you need to subtract your current age from 100 to determine how much of your portfolio should be in stocks.
For example, if you are 40 now, you should invest 60% of your money in stocks. The older you are, the more prudent your investments should become.
There is no right or wrong answer to the exact percentage of attribution. Many investors will go further than stocks versus bonds. They can decide to divide their portfolios into stocks and high dividend stocks.
Alternatively, you can diversify by taking risks on penny stocks, instead of investing in mega-capitalization stocks.
It can get confusing quickly, which is why M1 Finance’s automated investment system is perfect for the investor who wants to manage their portfolios hassle-free.
Can I change my wallet at any time?
Markets are changing all the time. Savvy investors have the tools to pivot when needed. Unlike other robot advisers, you will never be locked into an investment. You are free to change your portfolios whenever you want with M1 Finance. There are no penalties for this.
Even if savings and investment are automated with M1 Finance, you always have full control over your investments.
This level of control is crucial, especially if you want to use some cash to invest in a hot individual stock later. Check out M1 for free and find out what they offer. This could be the investment platform for you.