Stash Review | Easy and Informed Investing

Joseph Meyer
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About Stash

My life before Stash?

I ignored my 401k education and suffered from a lack of self-confidence.

I did not want to look at a statement or sheet of paper, but I wanted to feel assured my money was growing.

The Basics of Stash

Stash Invest is free to use and offers a choice of low cost ETFs. Curiously, nearly everything about the platform’s offerings are distinct from other online investing services:

You buy stocks and ETFs using deposit accounts (i.e. bank accounts).

Investing and trading costs are low.

Investments are made using ETFs sourced from Vanguard.

Stash automatically rebalances your portfolio.

The majority of ETFs are reasonable to good choices from the Morningstar category perspectives I use.

It’s a good and simple choice for first time investors.

Stashing cash in at a reasonable rate is a good way to go. I’d use Stash as my online bank if it offered slightly more competitive interest rates on parked cash.

That being said, I find the supporting decision tools doesn’t give me enough guidance. Most investment apps include decision support tools and user interfaces that allow a user to understand the underlying logic behind the recommended holdings.

Quick Summary

Buy funds, stocks, and ETFs.

Create Custom Portfolios

It’s not uncommon to sit down at your computer and browse around for an unknown period, trying to find the best site for your online stockbroking experience. Then you start your account application and go through the questions about your risk exposure, financial goals and financial knowledge. You prefer your investments to be simple and streamlined. During the account application you also provide information about your investment experience, which is helpful when you’re using any investment service.

Who Should Use Stash

Stash is particularly interesting because it has a higher long-term mutual fund expense ratio, at 0.35%, but less in the way of a short-term mutual fund expense ratio, 0.2%. The ability to hold cash is also attractive at Stash. The SEC said that the average expense ratio of a mutual fund is 1.03%, while the average expense ratio of a ETF is 0.74%. This means that using Stash could save investors as much as 33 basis points annually.

Stash is useful for its automatic rebalancing. If a user chooses a risk profile, like Conservative, Moderate, or Aggressive, Stash will automatically adjust the portfolio holdings to maintain the desired risk level. For example, if a Moderate risk profile is chosen, Stash will automatically rebalance the portfolio so that it holds 60% stocks and 40% bonds.

The Stash app also offers a few unique features, like the ability to round up to the nearest dollar and contribute the difference to Stash, or add funds using only your voice.

Stash is also unique in that it offers investment portfolios tailored to a user’s risk tolerance. This is different from most robo-advisers that work with a person’s age and investing timeline.

What Makes Stash Unique

The most interesting thing about Stash Invest is the investment philosophy behind it. They want to make investing easy and accessible for everyone. What better way to do that than to make it free?

For years, in order to get involved with investing, you had to spend big money on an expensive financial advisor. But now, you can set up an account, start buying investments, and learn about it all online. Essentially, you do the work. But behind the scenes, there is an expert team of investment professionals who do the rest.

One reason you might not want to jump into investing yourself is the research. I had to come up with a list of investments to buy in order to start my portfolio, and I only ended up choosing one. I still have no idea what the other dozen or so were. For me, I found handling the research more trouble than it was worth. This is where Stash comes in: They do the work for you. You pick the risk level you want to take and the percentage of your investment you want to allocate to different types of investments. Stash does the rest.

The simplicity of Stash is what makes it so great. I like to go to sleep at night without thinking about investments. But I don’t have the time or interest in researching investments day in and day out. With Stash, I just choose an allocation and they do the work for me.

How Stash Works

Stash is a new platform to help you evaluate all of the different investment accounts that you may have in your life. The target audience for Stash is mostly millennials and younger individuals, as the other investment platforms don’t really put a strong emphasis on easing the major issue faced by the target audience … Complicated and cryptic fees! Stash eliminates the difficulty of comparing investment type fees and monitoring your accounts, automatically rounding up each purchase to the next dollar, creating a small Roth IRA that you might not even realize you have.

Stash will link up with the various investment services you may already have – checking accounts, brokerage, pensions, 401Ks, 529s, and others. So whether you want to target your investments and savings toward retirement, start saving for your child’s education, or simply invest in a diversified portfolio of low-cost stocks, Stash is there to help you organize your savings and investments in one place.

Opening an Account

Registering on the Stash website makes the whole process easier and more transparent. They ask for the personal details you’d expect, but in a way that’s fun and engaging. You get to pick your own nickname and choose an avatar. You can also link your Facebook profile with your Stash profile. There doesn’t seem to be any official way to link your Twitter account though …

Please note that even though the name of the firm is Stash, the product they are selling is technically a Robo-Advisor. So they actually refer to their offering as “Stash Investing” (or “Investing with Stash”).

In order to sign up, you’ll need to provide your bank account information including the Routing number (immediately located at the bottom of any check) and your Social Security Number.

Assessing Risk Tolerance

Shivani and Lance started investing in 2006. They were both in their early twenties and had just started their first jobs out of college. At the time, they were eager to start saving up for retirement so they decided to do some research on investment strategies. They were looking for a few minutes of our time to explain how they had used the insights they learned on Stash Knowledge to reach their goals.

If you’re new to investing, it’s important to start with a plan and remain objective. You should invest in the stock market to achieve long-term growth, not for short-term goals like buying a car. However, if you’re looking for a safe way to accomplish goals like buying a home or financing your education, you should try savings bonds.

Account Verification

If you are bald (or too lazy to get a headshot …or hair), you don’t need to verify your identity. Otherwise, you’ll be asked to take a selfie, enter your social security number, and do everything else that’s necessary to get a verified account.

Some of the requirements for maintaining a verified account are:

  • Pay your investment account fees
  • Pay your taxes
  • Print invoices or complete tax forms for your investment assets
  • Report your investment gains to the IRS
  • Provide proof of address

Basically, if you are serious about investing, you’ll need a verified Stash account.

Features and Fees of Stash

Stash features an easy-to-use interface that is similar to the popular retail investment platform, Wealthfront. Compared to other savings account alternatives out there, they have created a simple, low-cost application that requires a small initial investment into their investment portfolios.

Stash helps you put your cash to work with their three portfolios, each of which is dedicated to specific goals. The Cash Portfolio is designed to preserve your principal, the Balanced Portfolio is meant to produce moderate returns, and the Growth Portfolio portfolios is meant for aggressive growth.

Stash also provides mutual funds and exchange-traded funds in addition to their bundles, as well as other boons such as a referral program and tools to help you monitor your investments.

If you’re new to investing or would like to take a step to the side of micro-investing without losing the automation of a robo-advisor, Stash may be a good choice for your investing needs. Their portfolios provide a good starting point for beginners or those who already have a little experience investing in higher-risk stocks.

Features

  • Build your own portfolio of stocks and ETFs; create a watchlist to track because you will have to go and define settings from "my portfolio"
  • Video Content offering useful information on investing
  • The ability to quickly add new trades
  • The ability to email to yourself quotes for stocks or mutual funds and track their price over time.
  • Provide stock/fund recommendations.
  • Lookup ETF and Mutual Funds availability and the tax treatment under Section 1022 (i.e. Long-term vs Short-term gains).

Cost

Breakdown, Idea Selection, and Context.

The app was very easy to take full advantage of, up and running literally within minutes. It was designed in a simple to use manner, and offered a good area to add relevant notes regarding each investment idea. The app offered a helpful Comparison function to quickly see where your portfolio was strong and where it could use some work.

Pros and Cons of Investing with Stash

Stash is a new company that offers a unique way to invest. It is the first app that allows users to invest on the go. Stash offers three investment strategies:

Flexible Investing: Invest small amounts anytime and withdraw at will

Conservative Investing: Invest a fixed amount that you’re comfortable with for a set time period

Automatic Investing: Automatically have money taken from a designated checking account and invested for a set time period

Stash allows you to purchase and sell stocks, while its website offers tools to assist in the investing process. It is important to mention that Stash is not an investment advisor. It is simply an app that allows users to invest.

However, it is true that Stash simplifies the investing process and makes it accessible to everyone. Also, more importantly, Stash is the first company that takes the investment process into mobile.

Pros of Stash

  • Free Investing. Stash invest gives you a small amount of money to start out trading with, so you can test out if the platform is right for you.
  • Social Investing. While this isn’t as good as social trading, it’s still one of the best ways to influence investing decisions because of its ability to tap into the wisdom of the crowds.
  • Free Portfolios. You can create several different portfolios to track and examine to help make better investing decisions.
  • Great Customer Service. This is one of the best things about Stash Invest because it can answer my questions quickly and effectively. This is something that I appreciate a lot.
  • Transparency. The Stash Invest website is transparent, which is always a good thing.
  • Annual Fee. The annual fee is incredibly low at only 0.25%.

Cons of Stash

According to my stash review, there wasnít anything to worry about, though you need to have a little more time to figure out ou to contribute, and a bit of technology savviness.

The biggest con is that the app (and website) is a bit different from other systems, and isnít as simple to use. This is negated if you set it up ahead of time. However, it takes a little more time to figure out how to contribute, and a bit of technology savviness. You'll need to know what a 401(k) is, since this is similar.

Bottom Line

Stash is a no-frills app that helps you keep a watchful eye on your investments.

While it’s not a robo-advisor, Stash offers a similar way to watch your money grow by investing a small amount of regular money on a regular basis.