The following post is a guest blog post from one of our good friends and he offers an alternative to the traditional form of dividend investing. We don’t traditionally have these, but we always enjoy reading a different perspective and other avenues to take to become a dividend investor! Please see the post below and we thought it could be for something of consideration:
As some of you might know, investing has been made far more accessible to the public through the rise of robo-advisors. Each of these companies have their own investing philosophy and use technology to select a mix of ETFs* depending on their clients needs. This option is ideal for people who don’t have the time or expertise to do it successfully themselves, or simply do not have enough wealth to have it professionally managed. Companies like Betterment and Wealthfront have been creating portfolios for clients as early as 2008, so this approach is nothing too new.
However, until now, existing robo-advisors have taken the easy way out. Most of these companies only build their clients ETF portfolios which doesn’t give much room for customization. Enter , a pure equity robo-advisor (i.e. no ETFs, just individual stocks) that follows a dividend value investing approach. By investing their clients’ money directly into dividend paying stocks, Emperor has historically outperformed the market. Interested? Let’s go over a few pros and cons of investing with Emperor before we get into the specifics:
- By building portfolios out of individual stocks and not ETFs, Emperor can be highly selective when building clients’ portfolios, do away with ETF fees, and focus on dividends!
- Emperor’s technology selects dividend paying stocks, so you could grow your wealth even faster. You have the option to reinvest your dividends automatically or withdraw them to supplement your passive income.
- A unique portfolio for every goal
- Unlike most of their competitors, Emperor believes in more than just saving for retirement. With their goal-based platform, you have the option to save for multiple different goals at once. The best part is that each goal you set up gets its own unique portfolio, designed to help you achieve it.
- Transparency in
- Again, Emperor does NOT buy ETFs. This means that there is nothing hidden eating away at your returns, just the 0.6% annual management fee.
- $500 minimum investment
- This isn’t too large of a minimum investment when you consider the minimums for traditional asset managers, but it is higher than most other robo-advisors.
- Restricted account options
- Emperor only allows you to open Individual, Roth IRA, Traditional IRA, and Rollover IRA accounts for your portfolios. Presumably, they will add more as they grow, but it is inconvenient if you’re looking to take advantage of the benefits of certain accounts.
- Investing is a long game, especially with stocks
- This is obvious, but it’s worth mentioning because investing with any robo-advisor is not a get rich quick scheme. As with almost any investment, you’ll see the best results if you hold your money for a long period of time.
Historically Superior Performance
Emperor is committed to dividend value investing, and their approach has been . That’s why they wanted to share this review and give you the opportunity to effortlessly get a dividend paying portfolio and compare their returns with your own.
First, Emperor narrows down U.S. companies by using their algorithm. Then, they further evaluate those companies by hand to come up with the “Dream Team”; all of which are dividend-paying companies.
By investing directly in stocks and not ETFs like most robos, Emperor is able to be more selective when it comes to choosing which companies to invest in. This way, they can pick stocks that have a long history of paying dividends and are likely to continue to pay them in the future. Consequently, this also allows them to offer a higher degree of personalization based on your risk tolerance.
Emperor also automatically rebalances portfolios, so they are always up-to-date. This means that even if you and your friend share the exact same risk tolerance, your friend’s portfolio from last week could be different from yours this week. As you can tell, ppersonalization is a key part of the Emperor philosophy.
Bridging the Gap Between You and Your Goals
In line with their stance on personalization, Emperor not only considers your overall risk tolerance, but they also take into consideration the goals you’re saving for. By taking time to understand your goals, Emperor can better tailor-fit your portfolios and invest your money wisely.
All you need to do is enter a few simple details about your goal, and Emperor will recommend a portfolio that is specifically designed to help you meet that target. They take into account things like your time horizon, the amount of money you need, and your initial contribution and invest accordingly. They also use this information to suggest a recurring deposit amount that could help you reach your goal based on their historical returns.
Once you’ve set your goal up, earnings from your portfolio will directly contribute to your goal. You can also adjust different variables to see how the timeline for achieving your goal changes. A version of this tool is also available on their .
It’s important to note that you can create as many goals as you want; each with their own unique investment portfolio tailored to your preferences.
We hope you enjoyed the guest post from our friend and if you have any questions, feel free to list them out below, and I am sure we can work together to have those addressed!
*Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.