2025-12-14
investing | tax | automated | guidance | returns | feature | portfolio | betterment | risk | savings |
Three ways it can pay to automate your investing Our managed offering adds value beyond a DIY approach. Here’s how. 5 min read
The Power of Automated Investing: Why Expert Guidance Matters
As the world of investing continues to evolve, it's easy to get caught up in the idea that self-directed investing is the way to go. With the ability to choose from thousands of individual stocks and ETFs, why pay someone to manage your portfolio for you? The answer lies in the value of expert guidance and the benefits of automated investing. At Betterment, our automated investing is designed to help you manage risk, maximize returns, and minimize legwork, all while keeping your goals on track and providing peace of mind.
Tax Savings: The Key to Increasing Returns
One of the most reliable ways to increase your returns is by lowering the taxes owed on your investments. Our trading algorithms take tax optimization to a level that's practically impossible to replicate on your own. With features like Tax Coordination and fully-automated tax-loss harvesting, we can help you keep more of what you earn. For example, our Tax Coordination feature uses the flexibility of our portfolios to locate assets strategically across different account types, helping more of your earnings grow tax-free. Additionally, our tax-loss harvesting feature has harvested nearly $60 million in losses for customers during times of market volatility, and nearly 70% of customers using this feature had their taxable advisory fee covered by likely tax savings.
Navigation: Staying on Track with Expert Guidance
Managing your own investments can be daunting, and it's easy to veer off-course. With automated investing, you not only get our guidance upfront, but you also benefit from technology designed to get you to your destination with less effort. Our automated rebalancing feature maintains your desired risk level, and our "glide path" feature automatically lowers your risk as your goal nears. We also encourage recurring deposits, which can help you take advantage of lower prices and earn higher returns. In fact, recent research by Morningstar found that investors who used recurring deposits earned nearly 3% higher annual returns.
Calm: The Value of Peace of Mind
Our automation can save you time, but the value of automating your investing is more than just time saved – it's quality time spent. With our team and technology working in the background, you can build wealth with confidence and ease. You'll have more time to focus on what matters most to you, and less time worrying about your portfolio. At Betterment, we offer both managed and self-directed investing options, so you can choose the approach that works best for you. By providing expert guidance and automated investing, we can help you achieve your financial goals and make every basis point count.
In conclusion, automated investing is about more than just portfolio construction – it's about ongoing optimization and evolution. With Betterment, you can trust that our team and technology are working tirelessly to deliver value in three big ways: tax savings, navigation, and calm. Follow Pacsquare for more fintech insights and stay up-to-date on the latest trends and innovations in the world of investing.
Insights
Q#1: What is the main advantage of using automated investing platforms like Betterment?
Answer: The main advantage of using automated investing platforms like Betterment is the value of expert guidance, which helps manage risk, maximize returns, and minimize legwork, all while keeping investment goals on track. This expertise is particularly valuable in areas like tax optimization and portfolio rebalancing. By leveraging automated investing, individuals can benefit from professional management without the high costs.
Q#2: How can automated investing help with tax savings and increasing returns?
Answer: Automated investing platforms like Betterment offer features like Tax Coordination and tax-loss harvesting, which can help lower taxes owed on investments and increase returns. These features use algorithms to strategically locate assets and harvest losses, resulting in more earnings growing tax-free. For example, Betterment's tax-loss harvesting feature has harvested nearly $60 million in losses for customers.
Q#3: What is tax-loss harvesting, and how does it work in automated investing?
Answer: Tax-loss harvesting is a feature that involves selling securities that have declined in value to realize losses, which can be used to offset gains from other investments and reduce tax liability. In automated investing, tax-loss harvesting is fully automated, allowing platforms like Betterment to identify and realize losses on behalf of customers, resulting in potential tax savings.
Q#4: How does automated investing help individuals stay on track with their investment goals?
Answer: Automated investing platforms like Betterment offer features like automated rebalancing, which maintains a desired risk level, and a "glide path" feature, which automatically lowers risk as an investment goal nears. Additionally, these platforms encourage recurring deposits, which can help individuals take advantage of lower prices and earn higher returns.
Q#5: What are the benefits of using expert guidance in automated investing, rather than self-directed investing?
Answer: The benefits of using expert guidance in automated investing include professional management of risk, maximization of returns, and minimization of legwork. Expert guidance also provides peace of mind, as individuals can trust that their investments are being managed by experienced professionals who can navigate complex markets and make data-driven decisions. This can lead to better investment outcomes and reduced stress.
