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frequently asked questions from smart investors
We have identified a few important questions many smart investors ask when choosing a digital wealth management platform.Get Started
frequently asked questions from smart investors
Please find some frequently asked questions and answers in regards to Investing. If you don't see what you need, feel free to check out our other FAQ sections, or fill out our CONTACT FORM and we'll get you an answer right away.
The risk tolerance questionnaire is a series of questions that help us understand your comfort level with market risk as it relates to long-term return potential.
Yes, you can change your risk tolerance by answering the questions again. We understand that life circumstances may have a significant impact on your ability to take risk.
If you feel that your risk score is not a true representation of your risk tolerance, it can be changed. To change your risk tolerance, please retake the risk tolerance questionnaire.
When you retake your risk tolerance questionnaire, it will change the risk tolerance across all your accounts.
Each goal has a defined upper and lower range for risk assets (stock-based assets). The higher your risk tolerance score, the higher your stock exposure will be, and vice versa. A change in your risk score will impact all your goals and asset allocation.
That’s an easy one. Our advisors can make this change for you. Please email digitaladvice@indexperts.com. We can make specific allocation changes in increments of 10%.
Your accounts are rebalanced when needed. For example: If the market value of a certain security increases significantly and grows above the upper limit, your account will automatically sell the amount above the upper limit and reallocate those funds to other securities to ensure your account is in line with your allocation. Your account will also rebalance as money moves in and out of the account.
The investment professionals at Indexperts build portfolios using Modern Portfolio Theory (MPT). MPT was pioneered in 1952, earning its creator a Nobel prize. MPT is a theory on how risk-averse investors can construct portfolios to maximize expected return based on a given level of market risk. The theory emphasizes that risk is an inherent part of a higher return. Diversification of assets plays a major part, and our portfolios have broad style and geographic diversification.
Portfolios used in Indexperts are built by the investment professionals of Linden Thomas & Company, the parent company of Indexperts. Linden Thomas & Company investment professionals include a team of Chartered Financial Analyst® designation (CFA®), the highest distinction in the investment management profession, showing a commitment to independent critical thinking, rigorous analysis, and a commitment to the highest standard of ethics and professional conduct. Note: Chartered Financial Analyst® and CFA® are registered trademarks owned by CFA Institute.
Passive investing uses index-based investment vehicles to gain asset-class exposure. In active investing, a portfolio manager or managers try to outperform a benchmark index. Passive investing tends to be much less expensive than active investing, as there aren’t portfolio managers and a team of analysts to support. Over time, passive investing has tended to outperform active investing about two-thirds of the time. Most of the reason for the outperformance can be explained by the lower fees, although behavioral finance emotional errors may explain some, as well. We believe using passive investment vehicles passes more of the return on to the investor, rather than going to the investment manager. We are strong believers that passive investing is an appropriate and valid approach to goals-based investing.
- Capital gains occur when a security’s current value rises above the amount it was purchased for. They are not realized until that asset is sold.
- The capital gain may be short-term (one year or less) or long-term (more than a year) and must be reported on income taxes.
A short-term capital gain is the result of selling off a security owned for less than one year. Short-term capital gains are taxed at a higher rate than long-term capital gains. Short-term capital gains are taxed at your ordinary income tax rate, while long-term capital gains are taxed at 0%, 15%, or 20% depending on your taxable income.
You can change your beneficiaries by selecting your profile and clicking on Account Settings. Select the account you would like to change the beneficiaries for. If you have multiple accounts with beneficiaries, each account must be updated separately.
A trade confirmation is an electronic document you receive from your broker-dealer showing the details of buy or sell trade orders placed in your account.
A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering for sale to the public. You will periodically receive updated prospectuses via email notification.
Over the years, the team at Indexperts has practically heard and seen it all when it comes to private wealth management for the affluent investor. Below are a few frequently asked questions you may have yourself:
After years of studying the impact that earnings quality, cost, and ownership had on investors who invest in index funds, Linden Thomas & Company decided to take the years of research and build a more efficient way to invest in indexing for the next generation of affluent investors.
Index funds are often pooled with millions of investors all with different needs and behavior. This exposes investors with a disciplined approach to the whims of small investor behavior. These small investors move in and out of funds, forcing fund managers to sell in markets that are not ideal. This is commonly known as small investor herding impact. Indexperts investors own the equities (stocks) directly through fractional shares. This avoids the small investors poor behavior.
Market-Cap Index Funds – Investors are pooled together in a portfolio of stocks that meet the market-cap requirements. The disadvantages are:
- Investors are pooled together
- Good investors are subject to poor behavior of other investors
- No control of holdings
- Little transparency of holdings
- No direct ownership of stocks
- Hidden fees seldom easy to find (Trading costs and expense ratios)
Market-Cap ETFs (Exchange Traded Funds) – Pooled funds that trade in the form of a stock. The disadvantages are:
- Same as above, PLUS:
- Small investors selling at one time can often create wider spreads on trades which negatively impacts investor results
- Often designed so small investors can be pooled to gain equity participation with less money.
Earnings Focus Institutional Indexing – This allows affluent investors the ability to own companies directly with a focus on earnings quality of holdings through fractional shares. Indexperts empowers investors that may have only invested in mutual funds or ETFs in the past and gives them the ability to have total ownership and control of holdings.
For as little as $100, an Indexperts diversified portfolio can be built.
Through fractional shares, each Indexperts smart investor will own the shares directly. This gives the benefits of ownership and total transparency on one’s portfolio.
Costs are made simply through a 1% fee for investors below $1 million. The Indexperts costs include all management fees and trading costs.
Other digital platforms charge a fee between .90% to 1.50% advisory fees. Investors are also subject to the hidden costs of funds and ETFs. Between expense ratios and trading costs, other competitors can often be 200% to 300% higher.
Our investors often choose us because of our index earnings focus and proven results. Indexperts was built for affluent, smart investors who are just getting started. It was made for investors that seek efficiency, total control, and transparency.
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Making the decision to use Indexperts as your digital wealth management platform is just smart. Investing with an award winning firm that uses Institutional Indexing as the platform for growth, no matter what the market conditions. Enter your info and let's get started.
get started building wealth in less than 5 minutes!
Making the decision to use Indexperts as your digital wealth management platform is just smart. Investing with an award winning firm that uses Institutional Indexing as the platform for growth, no matter what the market conditions. Enter your info and let's get started.
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