Introduction to M1 Finance
M1 Finance is a comprehensive financial platform that integrates investing, cash management, and borrowing services, making it a one-stop solution for managing your financial affairs. Designed for both beginner and advanced investors, M1 Finance offers a unique blend of automation, customization, and low-cost investing.
Key Features and Functionality
Investment Management
M1 Finance allows users to create personalized investment portfolios using its innovative “Pies” system. This visual representation enables you to allocate your investments into different slices, each representing various stocks, ETFs, or cryptocurrencies. You can either create your own custom portfolios or choose from pre-built Model Portfolios aligned with different investment goals and risk tolerances.
Automation and Customization
The platform leverages intelligent automation to streamline your investment strategy. The auto-invest feature ensures that your transfers are invested according to your desired asset allocation, maintaining your portfolio targets automatically. You can also set up an automatic investing schedule to invest deposits at specified intervals.
Fractional Shares and Commission-Free Trades
M1 Finance offers the ability to purchase fractional shares of stocks and ETFs, allowing you to invest in high-value securities with smaller amounts of money. All trades are commission-free, which helps in maximizing your returns over time.
Dynamic Rebalancing
The platform features dynamic rebalancing, which ensures that your portfolio remains aligned with your investment targets. This is achieved by automatically adjusting the allocation of new funds to underweighted assets and managing withdrawals from overweighted assets. While this process is automated, you can also initiate rebalancing manually.
Tax Efficiency
M1 Finance includes a built-in tax minimization strategy that helps reduce your tax liability when selling securities. The platform prioritizes selling securities in the following order: losses to offset gains, lots with long-term capital gains, and lots with short-term capital gains.
Dividend Management
M1 Finance is particularly appealing to dividend investors with its dedicated dividend dashboard. This feature provides detailed information on dividend payments, including historical data, current year dividends, and estimates for the next 12 months. The platform also offers automatic dividend reinvestment, which can be set up at both the portfolio and individual security levels.
Banking and Borrowing Services
In addition to investment services, M1 Finance offers several banking and borrowing options:
- M1 Spend: A checking account with cashback and integrated interest-earning capabilities.
- M1 Earn: An FDIC-insured high-yield savings account.
- M1 Borrow: A loan service that allows you to borrow up to 35% of your portfolio value at competitive interest rates, without creating a taxable event.
Other Features
- Margin Trading: Available for account balances over $2,000 at a competitive rate.
- Crypto Trading: You can also invest in cryptocurrencies through M1 Finance.
- Retirement Accounts: M1 Finance supports IRAs and trust accounts.
- User Interface: The platform is known for its intuitive and highly rated mobile app, making it easy to manage your investments and financial activities on the go.
Conclusion
In summary, M1 Finance combines the benefits of automated portfolio management with the flexibility of self-directed investing, all while offering low-cost and tax-efficient solutions. It serves as a comprehensive financial hub, integrating investments, savings, credit, and loans into a single user-friendly platform.