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The Best Investment Apps for Long-Term Investing

Long-term investing is a prudent strategy that allows your money to grow over many years through the power of compound returns. However, getting started and maintaining a long-term portfolio does require some effort. Fortunately, the rise of digital investing platforms has made it easier than ever to invest for the long haul.

Why Use an App for Long-Term Investing?

There are several compelling reasons why investment apps are a great choice for the long-term approach:

Low Costs: Most apps have no trading fees or minimum balances, allowing you to invest small amounts regularly without draining your returns. Over decades, small cost savings can amount to thousands due to compounding.

Ease of Use: Setting up an automated portfolio and making one-click trades on your phone is far more convenient than calling a broker or filling out paperwork. This makes it effortless to maintain your strategy.

Automated Features: Many apps offer autopilot functions like recurring investments, automatic rebalancing, and tax-loss harvesting. These tools do the “busy work” for you so your money stays on track.

Education: Leading apps provide educational resources on constructing a portfolio, industry news, and more. This ongoing learning helps prevent costly mistakes as markets evolve.

Global Access: You can manage your entire portfolio from anywhere as long as you have an internet connection. No need to visit a brick-and-mortar branch during business hours.

In summary, investment apps streamline the long-term process so your money can work for you with minimal effort or expense. Now let’s examine the top options available.

Best Investment Apps for Beginners

If you’re just getting started with long-term investing, these platforms are ideal due to their intuitive interfaces and educational resources:

M1 Finance

M1 Finance takes the prize for being the most user-friendly app overall. You simply drag and drop assets into a personalized pie chart portfolio, then sit back and watch it grow.

Key Features:

  • No fees of any kind, not even for transfers or support.
  • Allows fractional share investments from as low as $5 per trade.
  • Advanced “Slices” feature lets you build customized portfolios with multiple pies.
  • Powerful automated tools like auto-rebalancing and tax-loss harvesting are free.
  • Extensive learning library guides new investors step-by-step.

M1 is perfect for hands-off investors who want to set simple portfolios and forget about trading. The pie interface also makes complex strategies intuitive.

Fidelity Investments

Fidelity is a trusted household name for online brokerage, and their mobile app replicates the full-service experience.

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Key Features:

  • $0 commission trades on stocks and ETFs.
  • Research tools analyze thousands of funds and stocks.
  • Guidance from pros through virtual appointments.
  • Robust educational articles tailored for all experience levels.
  • Robo-advisor option “Fidelity Go” builds optimized portfolios.

Fidelity’s platform can feel overwhelming at first, but their learning center eases newcomers in gently. Account minimums are higher than other beginner choices, though.

Betterment

Betterment was one of the earliest robo-advisors and remained a top name for good reason. Their intuitive app focuses on long-term goals.

Key Features:

  • Low 0.25% advisory fee and no account minimum.
  • Automatic portfolio creation based on risk profile and time horizon.
  • Smart round-ups invest spare change from every purchase.
  • Tax-loss harvesting provides extra returns annually.
  • Extensive retirement planning tools map savings needs.

While limited customization, Betterment is perfect for hands-off investors who just want a simple set-it-and-forget portfolio. Low costs make it suitable even with small balances.

These three apps offer the smoothest onboarding experience and ongoing education for complete beginners ready to start investing in the long run.

Advanced Investment Apps

Once comfortable with the basics, more powerful platforms below unlock greater control and low-cost sophistication:

Vanguard

Vanguard pioneered low-cost index investing in the 1970s, and their app continues that tradition digitally.

Key Features:

  • Among the lowest expense ratios in the industry on funds.
  • Custom target-date retirement funds simplify set-it-and-forget.
  • Trading just $1 per online stock/ETF transaction.
  • Robust research database analyzes thousands of holdings.
  • Ability to construct advanced portfolios from individual assets.

While less intuitive than robo-advisors, advanced investors appreciate Vanguard’s traditional broker experience at dirt-cheap prices. Account minimums are moderate.

Schwab

Similar to Vanguard, Schwab has transformed into a full-service digital powerhouse over recent years.

Key Features:

  • $0 stock and ETF trades with any account size.
  • Robust analytic tools scan financial markets in real time.
  • Individual retirement account options beyond 401(k)s.
  • Personalized advice through automated Digital Planners.
  • Extensive educational workshops led by CFP professionals.

Schwab is ideal for those seeking advanced functionality across taxable and retirement accounts with top-tier customer service and research tools.

Fidelity Active Trader Pro

While their mobile app covers essentials, Fidelity’s desktop Active Trader Pro software provides hardcore tools.

Key Features:

  • Advanced charting analyzes trends with customized indicators.
  • Powerful algorithmic trading strategies through options.
  • Real-time market scanning across exchanges.
  • Instant order execution from hotkeys with streaming quotes.
  • Institutional-grade data API for developers.

Fidelity ATP satisfies even the most technical traders who require depth and shortcuts. Best for experienced investors with larger balances.

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For a robust feature set beyond the basics, these powerhouse platforms unlock sophistication suitable for all portfolio sizes. Just avoid “analysis paralysis” that prevents action.

Index Funds: Core of Any Long-Term Strategy

When constructing a portfolio through any app, index funds should anchor your holdings. Here’s why:

  • Low Costs: Expense ratios often under 0.1% vs. 1%+ actively managed funds that try to “beat the market.”
  • Tax Efficiency: Infrequent trading keeps capital gains minimal, unlike funds churning holdings.
  • Diversification: Broad market coverage reduces unique company or sector risk compared to individual stocks.
  • Proven Performance: Numerous studies prove nearly all actively managed funds underperform their indices after fees over time.
  • Simplicity: Index funds require no stock selection or market timing – just buy and hold for the long haul.

The three funds below capture the entire stock market at dirt-cheap prices. Together they offer instant, permanent exposure through just a few trades.

  • Total US Stock Market: VTI (0.03%), ITOT (0.03%) or SCHB (0.03%)
  • Total International Stocks: VXUS (0.08%), SCHF (0.06%) or IXUS (0.11%)
  • Total US Bonds: BND (0.035%), AGG (0.04%) or BSV (0.05%)

Through automation, M1 Finance and Betterment let you hold these fractions of a percent. Manual brokers like Vanguard, Fidelity, and Schwab charge low one-time trading fees. In any account, index funds provide the bedrock of a set-it-and-forget portfolio with decades to appreciate.

Building an All-Weather Portfolio

Once core holdings are selected, supplement them through tactical allocation based on risk tolerance and goals. Consider these evidence-backed approaches:

Global 60/40 Stock/Bond Portfolio

  • 60% global stocks (using the three funds above in a ratio like 55/5/30)
  • 40% bonds (using any total bond market index fund)

This simple “lazy portfolio” provides adequate risk-adjusted returns historically with low effort. Rebalance annually or as markets fluctuate to maintain allocation.

Risk Parity Portfolio

  • 30-50% stocks
  • 30-50% bonds
  • 10-30% alternatives like gold, commodities, and REITs

Spreading risk equally across low-correlated asset classes aims to boost returns while smoothing volatility. Automated apps and protocols from Schwab, Betterment, or QS Invest rebalance dynamically.

Permanent Portfolio

  • 25% stocks
  • 25% bonds
  • 25% gold
  • 25% cash

A conservative portfolio that seeks to do reasonably well regardless of inflation, deflation, or economy. It relies more on diversification than speculation through simple, balanced index funds or ETFs.

FAQs about Long-Term Investment Apps

Investing for the long run through apps likely brings up many questions. Here are answers to some frequently asked queries:

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Is it safe to keep all my money on an investment app?

While reputable brokerages have strong security, it’s generally not advisable to keep your entire net worth with any single company. Consider splitting balances across two or more firms in case of unlikely outages or hacks. FDIC insurance protects up to $250,000 cash per bank if maintained separately.

How do taxes work with app-based portfolios?

Most brokerages automatically generate 1099 tax forms each year listing capital gains, dividends, and other income. You’ll report these on your return. Apps may also perform tax-loss harvesting to offset gains. Always check with a financial advisor about your specific situation.

Can you access money in a taxable brokerage at any time?

Yes, funds invested outside retirement accounts are freely accessible. Selling assets in a taxable account does trigger capital gains taxes on profits depending on the holding period. For long-term goals, consider limiting withdrawals to emergencies only.

What if I want to change brokers later?

All reputable investment apps allow simple transfers of your entire portfolio to a competing firm. Assets move in-kind to avoid selling and rebuying, preserving your cost basis. Test small transfers first if concerned.

How much manual work is truly required in the long term?

Once core holdings are established through initial due diligence, many apps automate complex tasks so your portfolio runs itself. At a minimum, assess performance and rebalance annually depending on your strategy and risk tolerance. Otherwise, resist tinkering – the power of compound returns requires a hands-off approach.

Should I consolidate old employer retirement accounts?

Rolling over to an IRA managed through an app gives you more investment freedom and likely lowers costs in the long term. However, consider any early withdrawal penalties or unique fund options first. Get advice based on your specific plan details.

Conclusion

With so many great options today, starting an automated long-term investing strategy requires little more than opening an app on your phone. By focusing on whole-market index funds, maintaining a balanced approach, and letting time work its magic through compound returns, building wealth for the future becomes straightforward. Always remember – simple, low-cost, and tax-efficient investments coupled with patience and discipline are the true keys to success over decades, not days or quarters. Get started with any of the top-rated investment platforms discussed here. Your future self will thank you.

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