Adjusting Your Acorns Investment Portfolio: A Quick Guide

Changing your investment portfolio in Acorns is a straightforward process. Acorns will recommend a portfolio for you based on factors such as your age, income, goals, and risk tolerance. However, you can override this recommendation and choose your own portfolio at any time. To do so, you can either use the Acorns app or log in to your account on the Acorns website. This article will guide you through the steps to change your portfolio and provide information on the potential implications of making changes. It is important to note that while you can change your portfolio at any time, Acorns recommends sticking with your investments for a while to give them time in the market. Additionally, changing your portfolio may have tax implications, so it is advisable to consult a tax professional or relevant resources to understand the tax consequences of your decisions.

How to change your portfolio on the Acorns app

Changing your portfolio on the Acorns app is a straightforward process.

First, log in to your account. From your home screen, tap "Invest". Then, scroll down and tap "Your Portfolio". If you have a Custom Portfolio, tap "Edit" in the top right corner of the screen and then tap "Risk" from the menu that appears.

You can now swipe through the different portfolios to learn more about each one. To see what makes up each portfolio, select "Overview" and scroll down. Alternatively, select "Considerations" to learn more about when you might want to consider each portfolio.

Once you've made your choice, tap "Change to this portfolio". Confirm that your Investor Profile is up-to-date and that you still want to change your portfolio by clicking "Investor Profile is Accurate".

It's important to remember that changing your portfolio will trigger a rebalancing of your investments to match the allocations of your new portfolio. This may involve selling some of your existing investments and buying new ones. While you can change your portfolio at any time, it's generally not recommended to do so too often, as it may have potential tax implications.

How to change your portfolio on the Acorns website

Acorns will recommend a portfolio for you based on factors such as your age, income, goals, investment horizon, and risk tolerance. However, you can override this recommendation and choose your own portfolio at any time.

• Log in to your account on the Acorns homepage.
• Click on "Invest".
• Click on "Your Portfolio".
• Scroll to the bottom of the page and click on "Risk", or click "Edit" in the top right corner, then select "Risk" from the menu.
• Use the left and right arrows to scroll through the different portfolios to learn more about each one.
• Select "Overview" to see what makes up each portfolio, or "Considerations" to learn more about when you might want to consider each portfolio.
• When you have chosen the portfolio you want, scroll down and click "Change to this portfolio".
• Confirm that your Investor Profile is up-to-date and that you still want to change your portfolio by clicking "Investor Profile is Accurate".

Please note that changing your portfolio will trigger a rebalancing of your investments to match the allocations of your new portfolio. This may involve selling some of your existing investments and buying new ones. Therefore, while you can change your portfolio at any time, it is not recommended to do so too frequently.

What is portfolio rebalancing?

When you change your investment portfolio in Acorns, the platform will rebalance your portfolio to match the allocations of your new portfolio. This may mean selling some of your existing investments and buying new ones. Acorns does not recommend changing your portfolio too often, as doing so goes against the time-tested investing principle of sticking with your investments to give them time on the market.

Portfolio rebalancing is the process of changing the weightings of assets in an investment portfolio. It is an important factor in helping you meet your financial goals. When you first create your financial portfolio, you take into account your goals, age, and risk tolerance, and create an asset mix that works for you. This likely includes a ratio of stocks to bonds.

Over time, changes in the market can cause your portfolio to drift from your target asset allocation. Some assets may perform well and become a larger portion of your portfolio, while others may do poorly and shrink as a percentage of your investments. This will change the risk profile of your portfolio. Rebalancing allows you to realign your portfolio with your risk tolerance and overall investment strategy.

For example, if you start out with a mix of 60% stocks and 40% bonds, and the market value of your stocks grows while your bonds don't, you may end up with 70% of your portfolio value in stocks and only 30% in bonds. To rebalance, you would sell some of the stocks and buy more bonds to return the percentages to 60/40.

The frequency with which you rebalance your portfolio depends on various factors, such as age, risk tolerance, and transaction costs. It is recommended that a portfolio should be rebalanced at least once a year.

How does portfolio rebalancing work?

Portfolio rebalancing is an important investment strategy to help you stay on track with your financial goals. It involves buying and selling investments to return to your initial asset allocation. For example, if your original portfolio consisted of 90% stocks and 10% bonds, and the stocks have since grown to 95%, you would need to sell some stocks and buy more bonds to return to the original 90-10 split.

At Acorns, we determine an asset allocation for you, based on your income, age, time horizon, risk tolerance, and goals. We then automatically rebalance your portfolio to maintain this allocation. When you add money to your account, we distribute it across all the exchange-traded funds (ETFs) in your portfolio to keep your asset balance steady. We typically review your investments on a quarterly basis, and if any holding has moved significantly from its initial weighting, we buy and sell ETF shares to return to your original allocation.

You can also choose to manage your portfolio rebalancing yourself. Some experts recommend checking in at least annually, while others suggest doing so more frequently, such as every six months or every quarter. However, rebalancing more often could result in higher trading fees and taxes, depending on your account type and broker. Another strategy is to rebalance whenever your portfolio deviates from your original allocation by a certain amount, such as 5 percentage points.

It is important to rebalance your portfolio to maintain your long-term investment strategy and limit your risk. For example, if your portfolio has shifted from 90% stocks to 95% stocks, your aggressive strategy has intensified, and your risk has increased. Therefore, rebalancing helps to ensure your portfolio does not take on greater losses than you are prepared for.

When should I rebalance my portfolio?

When you change your portfolio, Acorns will automatically rebalance it for you. However, if you opt to manage your portfolio yourself, you can rebalance it whenever you need to. Some experts recommend checking in at least annually, while others suggest doing so more frequently, such as every six months or every quarter.

It's important to note that rebalancing more frequently could result in higher trading fees and taxes, depending on your account type, broker, and actions taken. Another strategy is to rebalance whenever your portfolio deviates from your original allocation by a certain percentage, such as 5%.

You should also rebalance your portfolio whenever your goals change. For example, as you approach retirement, your asset allocation should shift to a more conservative stance. Additionally, the optimal time for rebalancing depends on the type of account. With a tax-advantaged retirement account, the timing of rebalancing is generally not significant. However, with a taxable investment account, there may be tax implications associated with trading activity.

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