COVID-19. Interest rate drops. Market volatility. With ever-changing news, it's natural to wonder what to do. We asked Dan Egan, Director of Behavioral Finance & Investing, to answer some of your top questions.
What Should I Be Doing?
With the effect that COVID-19 has had on the stock market, we give advice on what actions you can take to help protect your finances.
Why Did the Fed Drop Interest Rates?
The Federal Reserve adjusts interest rates to encourage behaviors that benefit the economy. Learn more about their recent decision.
How Does Betterment Move My Money?
When you move money in to, out of, and within Betterment—just how long does it usually take? We've got answers.
How Can Tax Loss Harvesting Help?
When the markets aren’t doing so well, there can still be a silver lining: tax loss harvesting. Learn more about how it works.
What is market volatility?
Market volatility refers to fluctuations in the price of investments. In times of economic stress, markets tend to be more volatile, and you might see some big ups and downs.
Selling investments during times of market volatility is likely to do more harm than good because you could be locking in losses—and derailing your financial plans.
Making decisions in the heat of the moment rarely goes well. Instead, figure out your approach to market volatility—and stick to it.
Fresh Off The Press
Why You Should Consider Converting Your IRA
If the market is down, you might be doing your future self a favor by converting all or some of your Traditional IRA into a Roth IRA.
What Should I Be Doing With My 401(k)?
With the spread of COVID-19 and recent market volatility, it’s natural to wonder what you should do with your 401(k).
How To Transfer Assets In Volatile Markets
Have a high-fee or high-risk brokerage account that you’ve been avoiding transferring due to potential tax consequences?
Our Portfolio Is Built To Withstand Market Drops
While we don’t know when exactly a market drop will happen, we’ve already prepared for it.
Jon Stein: Thoughts on the Volatile Market
Much of what Betterment has worked toward the past 10 years has been purpose-built to endure all the worst and the best the market has to throw at us.
Our Advice On What To Do
The stock market goes up on average, over time. We believe that disciplined strategic investing is the best way to build wealth in the long run. An investor who focuses on timing the market has the greatest potential for losses.
However, if you’re still worried, there are still some actions you can take:
1. Do...nothing! The act of staying put is often the best thing an investor can do. There is evidence that panic-induced account changes and account monitoring can end up hurting your goals.
2. Tweak your risk level. But keep in mind that changing your allocation may cause taxes.
3. Temporarily divert your deposits into our low-risk cash account, Betterment Everyday™ Cash Reserve.
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.
How Betterment Helps Keep You on Track Through Tough Markets
Historical data suggests that customers who follow our advice will stay on track to reach their goals, even in a market downturn as bad as the 2008 crisis.
Let's ride out this rollercoaster together.
We are here to help each of our investors achieve the best possible returns while taking on the appropriate level of risk, no matter what's happening in the market.Hop on, let's go.
† Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC may participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity — e.g., individual or joint — at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II.