New platform is making smart investment easy for the mainstream.
Acorns is a smartphone-based platform that opens up investment opportunities to those with only small amounts to invest. Investments can be of any amount, even sub-dollar quantities. The app cleverly rounds up your online purchases to the nearest dollar and places the difference in an investment portfolio.
Users can sign up with an online bank account and proof of address. Once a member, users can opt for a desired risk level varying from conservative to aggressive. Then Acorns automatically manages the pre-selected portfolios of exchange-traded funds. Users can reassess their risk tolerance as conditions evolve. By using the smartphone app, users are able to make regular yet small investments in shares with a high frequency, a model that’s not been seen before.
Walter Cruttenden, co-founder and CEO of Acorns explained to Gizmag,
“By breaking the increments into almost unnoticeable amounts of money, we open up new avenues to save and invest. And by sweeping these funds into a well-diversified portfolio, people can realize the benefits of compounding, dollar-cost averaging and portfolio rebalancing that comes naturally with high frequency investing. We believe micro investing can help people build a better financial future without conscious effort.”
The app’s founders have raised an impressive $8.3 million to put the service into practice which suggests it has investors of its own backing the idea and more importantly, who trust it will succeed.