What is Ellevest's investment strategy?

We started Ellevest because historically, the investment industry was designed and run by men — which means it was really designed for men. That means the supposedly “gender-neutral” investment industry actually defaults to men’s preferences, salaries, career paths, and lifespans (which are generally different from women’s).

Not OK. So we’ve made our online investing platform gender-aware. For women, that means we use a proprietary algorithm to calculate financial goal targets to meet your specific needs, including a larger retirement target amount for your potentially longer lifespan.

Once we’ve calculated the amount you should be aiming for, we suggest how much you should contribute in order to get there based on your financial profile, a gender-specific salary curve, and your target horizon. Then we recommend an investment portfolio personalized to your goal and timeline to help you reach your goal (or better) in the majority of markets. We do that using a Monte Carlo simulation — a forward-looking, computer-based analysis in which we run our recommended portfolios and savings rates through hundreds of different economic scenarios. You can read more about that here.

The approach we use on our online platform and for Ellevest Private Wealth clients both follow the same sound investment philosophy and framework. They were developed by our Chief Investment Officer, Sylvia Kwan, in collaboration with Morningstar, Inc.

We focus first on diversification, which helps reduce overall risk and offer protection against what no investor can know or foresee. That’s why our online platform offers 21 different asset classes across our goal-based investment portfolios.

Next comes investment selection. We choose our investments very carefully so that they give you the appropriate mix of stocks, bonds, and alternatives to help you reach your goal, while keeping costs low. Most of our portfolios are composed of exchange-traded funds (ETFs).

Then comes risk. We don’t believe in asking clients what their risk tolerance is (for most people, it depends on the situation anyway). Instead, we look at the kind of goal you’re saving for, how much you’ll need, and how long you’re planning to invest (that is, when you’ll need the money) to recommend the risk level that we believe is most likely to help you achieve your goals.

Finally, forecasts. We give you market forecasts using assumptions that are grounded in research and expertise — forecasts that consider the markets’ good years and bad years (and even the really bad years). That’s why both the recommendations we provide and the forecasts we show you reflect a 70% likelihood of achievement or better and include the impact of taxes, fees, and inflation. (You may have heard of other digital advisors who show higher forecasts … but those have only a 50% estimated chance of achievement. That likelihood doesn’t meet our standards. At Ellevest, we want to help you achieve your goals with a higher level of confidence.)

We’re also proud to offer you the opportunity to invest to advance women through Ellevest Impact Portfolios. We constructed these investment portfolios — our version of gender-lens investing — to help you put your money in investments you care about, while still maintaining the opportunity to earn financial returns. Read more here.

Can I pick individual stocks at Ellevest?

Ellevest believes in a diversified investing strategy, which means we believe you should be invested in a lot of different companies to offset risk. We do not offer the ability to invest in individual stocks. Check out this video from our Chief Investment Officer to learn more.