An increasingly popular brokerage service, M1 Finance falls under a category known as robo-advisors. Essentially, robo-advisors use algorithms to help guide your platform to profitability. This facilitates the core advantage of hands-free investing, allowing you to live your life while advanced computer technology does the busy work of portfolio management.
On the surface, M1 Finance appears the most appropriate for beginner investors. Indeed, many new to Wall Street elect M1 for its fuss-free approach. However, even advanced traders could choose to allocate funds in an M1 account. Because an algorithm pulls the weight, you eliminate emotions and personal biases from your decisions.
Best M1 Finance Alternatives:
Although M1 Finance works best for those who live life on-the-go and have other interests outside of Wall Street, investors should nevertheless keep their eyes out for alternatives. While M1 is known for its robo-advisory, it’s not the only game in town.
Further, M1 Finance is limited regarding investment selection diversity. For instance, if you want to engage in high-risk, high-reward growth opportunities, this platform isn’t the most ideal. Also, if you prefer greater control over your investing or trading endeavors, many other brokerages provide superior consumer modularity.
What is M1 Finance?
Aside from its robo-advisor algorithms, what makes M1 Finance appealing to a broad audience is its “pie investing.” Pies are a mixture of different stocks and exchange-traded funds (ETFs) that cover various sectors. You can craft your own pie or select from “Expert Pies” — portfolio allocations that investment gurus have developed.
While M1 Finance certainly has a reputation as a beginner’s investment portfolio, the platform really appeals to those who prefer delegating the process of money management to another entity. Also, some folks just don’t care for the mechanics of investing and would rather spend their time on pursuits meaningful to them.
Why M1 Finance Might not be Right for You
Obviously, not everyone has the same attitude about money management. For those who prefer to know the ins and outs of their portfolios, M1 Finance may not be the most appropriate platform.
In addition, a drawback for M1 is that it doesn’t offer the greatest library of investment selections. For instance, if you want to trade options, forex or cryptocurrencies, you’re out of luck. Naturally, rookie investors who progress in their investing endeavors will want to explore the speculative side of this business. They will find M1’s platform restricting.
Finally, an oddity with M1 is that it lacks advanced transactional tools such as limit orders. Instead, this platform exclusively uses market orders or conducting buy/sell orders at the current market price instead of a specific one. Certainly, this will turn off advanced traders.
Best Alternatives to M1 Finance
For those who are seeking a hands-free approach to their investment strategies, you will find it difficult to top M1 Finance. With its unique take of pie investing, you are able to remove the intimidation factor from the capital markets. As well, you have the confidence of investing alongside 80 Wall Street expert portfolios.
The drawback, however, is that M1 Finance doesn’t provide as comprehensive of a platform as its rival brokerages. Also, you may prefer greater control over your money, along with trading tactics. If you’re looking for something more hands-on, here are some alternatives to consider.
Best for Balance: TD Ameritrade
A true benchmark in the jack-of-all-trades department, you won’t find too many platforms that are as balanced as TD Ameritrade. Featuring a user-friendly interface that appeals to both beginners and advanced traders, TD Ameritrade isn’t just about approachability. Indeed, the brokerage offers an impressive array of investing selections.
Beyond that, the company is big on education. Here, you’ll find many resources that will guide you to the best opportunities in not only the domestic equity market but also foreign American depository receipts (ADRs) and even…