Earlier this year I happened upon a new online brokerage called Betterment.com that was advertised as an easier way to invest for people who are either too busy to handle their own investments, too intimidated by other brokerages being too complicated, or who just wanted an easy hands off way to invest their money with no fuss.

How does Betterment work?

It marries the simplicity of an high yield savings account with what on average are the higher long term returns of investing in stocks and bonds. It is a simple account where you can add or withdraw funds to or from your linked bank account, and then tell Betterment your risk tolerance, and you’re done. Once you set your allocations Betterment will then invest money for you on a scheduled basis, re-allocating your funds when your allocations get out of whack.

It’s a simple investment account that will help people invest for the long term without a lot of hassle.

I Signed Up For Betterment

I really like the theory behind Betterment, and liked what they had to offer, and decided to jump in and give Betterment a try. In April I signed up for the site and began depositing money every month.

While my returns have been negative so far, that’s to be expected with the stock market showing a downward trend since April when I signed up.

When you are invested mainly in index funds, your returns will go down in the short term when the market is down. In the long term you should be ok.

Betterment Gets A New Look

So far I’ve been pretty happy with what Betterment has to offer, but this past month Betterment decided to make some changes to their look and feel and make things even better than before.

For now the changes are mainly just changes to the design with some subtle color changes, and a change to the site layout. The core functionality of the site has remained essentially the same.

So what you’ll get is a cleaner design for the site. While I think the changes look nice, they’re also being done in preparation for some other bigger changes that the Betterment team has coming. On the company’s blog, they mention that they’re getting the site ready for a variety of new features and tools that will be coming down the pipe in the coming weeks. Apparently they wouldn’t all work very well with the old design.

The new look is just the start of a plethora of new features we’ll soon be rolling out. In the coming weeks, we’ll be launching more tools to help you reach your goals. It’s all part of our dedication to providing a smarter, simpler, better way for busy people to invest.

So Betterment is continuously trying to get better, updating the design, adding new tools and features, and making Betterment a one stop shop.

What Investments Do You Get With Betterment?

So when you sign up with Betterment what kind of investments do you have available, and how does the investment process work? After you signup (get a $25 signup bonus here), There are only a couple of steps you’ll need to take. You’ll tell the site:

How much to invest.

How much of your investment you want in equities (Stock Market).

How much you want in Treasury bonds (TIPs).

After you set up your allocations Betterment will buy stocks in a variety of Index Fund ETFs so that you are diversified. Here is what you get on the stocks side:

10% SPDR Dow Jones Industrial Average ETF (DIA)

20% iShares S&P 500 Value Index ETF (IVE)

20% iShares S&P 1000 Value Index ETF (IWD)

15% iShares Russell 2000 Value Index ETF (IWN)

15% iShares Russell Midcap Value Index ETF (IWS)

20% Vanguard Total Stock Market ETF (VTI)

For Treasury bonds, you get

50% iShares Barclays 1-3 Year Treasury Bond Fund (SHY)

50% iShares Barclays TIPS Bond Fund (TIP).

So once you set your allocations you’ll get a nice diversified set of stocks and bonds to add to your portfolio.

Betterment Iphone App

With a lot of companies the Iphone app won’t be able to do as much as you’d like, it feels like an underpowered version of the main site. With Betterment, since their site is so simple to begin with – you can do just about everything you can on their site – on the app as well.

You can use a simple slider to change your asset allocation, add or withdraw funds, check your balances and account activity. It’s simple and effective.

Conclusion

I’ve been using Betterment.com for the past few months and it is what it says it is.

A simple way to invest and save for retirement. It’ll take your invested money, put it in index funds, and reallocate when necessary. You don’t have a lot of complicated things to worry about.

The new site changes should give the site an fresher look, and according to Betterment, prepare the site for some future enhancements and feature upgrades. I look forward to them.

Have you signed up for Betterment? Are there things holding you back? If you have signed up, how do you like it so far? Do you like the design changes?