Betterment's CEO advises investors to stay the course

Recent fluctuations in the stock market have left many everyday investors feeling uneasy. Sarah Levy, CEO of Betterment, a digital investment platform, shared her insights on how to navigate this turbulent financial environment. She emphasizes the need for investors to remain calm and stick to their long-term strategies. Levy advises clients to "stay the course" during market volatility. She suggests using this time to review tax strategies and consider tax-loss harvesting as potential opportunities. For long-term investments, maintaining a diverse portfolio is key. This includes a mix of international stocks, small-cap companies, and fixed-income assets. The current market situation has raised doubts about the traditional views of diversification since many indexes are heavily influenced by a few large tech companies. Levy acknowledges this concern but believes that a well-allocated portfolio can weather such anomalies over time. In the interview, Levy also touched on the broader implications of government actions on the economy. She refrained from speculating on the government’s strategies, focusing instead on how they impact her business directly. Levy highlighted that Betterment is not pushing investors to frequently check their portfolios, as this can lead to poor decision-making. Instead, she encourages a balanced approach to investing and saving, promoting a high-yield cash account as a safer option amid market uncertainty. As a business leader with experience at Nickelodeon, Levy also reflected on the responsibility of businesses in today’s society. She believes companies should provide choices that align with customers’ values, be it socially responsible investments or more traditional options. Lastly, she emphasized the importance of having an emergency savings fund and planning for retirement early on. Levy argues that having a financial advisor can significantly help investors navigate challenges and make informed choices in unpredictable times.