Acorns Aggressive Portfolio Return: Your Path to Wealth?

8 min read.

Want to know more about Acorns aggressive portfolio returns? This post answers your questions about the returns, risks, and overall performance of this investing account.

We’ll dive into the historical data, asset allotments, and more to help you decide if this account is right for you.

Quick Facts

• The Aggressive Portfolio invests only in stocks to get maximum long-term wealth, for people with a higher risk tolerance.

• Historical performance is mixed and volatile, returns range from 5-10% and often lag the S&P 500.

• Investors should consider the costs, monthly fees, and fund expense ratios; weighing the portfolio’s risk/reward profile against your goal and time horizon.

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What is the Aggressive Portfolio by Acorns?

The Aggressive selection is for people willing to take on more exposure, potentially for more returns. This portfolio invests mostly in stocks to aim for higher returns; this is for people who are focused on growth, not income.

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In short, this account is all stocks & growth. It’s focused on leveraging stocks for big gains. But that means you have to be prepared for volatility and maybe big losses along the way.

Asset Allocation in this Investment Account

The principal feature is its 100% stock-allocated, it’s a recipe for maximum returns by taking more exposure. Unlike balanced or conservative portfolios, it doesn’t have bonds or cash, it’s all stocks to ride the stock market!

To spread opportunities across different sectors, Acorns uses diversified exchange-traded funds (ETFs). These ETFs have a mix of large and small company stocks and emerging shares, so you get broad exposure to different industries and geographies. This diversification helps reduce some of the uncertainties of only investing in stocks.

Plus Acorns adjusts the allocation of the portfolio based on market conditions to maximize returns. This dynamic approach ensures the portfolio stays in line with your financial goals even through fluctuations. New investors looking to grow their wealth over time may like this account.

When to Rebalance?

If you self-manage your portfolio you can rebalance it whenever you want. Experts recommend rebalancing annually or semi-annually but more frequent rebalancing (quarterly) may incur higher costs due to trading fees and taxes depending on if you have a tax-advantaged retirement account or a taxable investment account.

Others rebalance when their portfolio drifts a certain percentage (e.g. 5%) from its original allocation. This approach requires more monitoring. Many brokers allow you to set up alerts for such shifts or you can monitor your portfolio based on market conditions.

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For example, if tech stocks are doing well and are overrepresented in your portfolio you may want to sell specific holdings to rebalance. Rebalancing is also important when your financial situation changes – such as moving to more conservative investments closer to retirement.

Remember the timing of rebalancing for a tax-advantaged retirement account is flexible but for taxable investment accounts be aware of the tax implications of trading.

Historical Performance of the Aggressive Portfolio

The Aggressive Portfolio has had mixed results in the past, with around 5% annual returns being reported, so growth can be slow especially compared to more robust benchmarks like the S&P 500.

Another thing to consider is volatility. This account is more volatile than the S&P 500, especially during downturns. So while the potential for returns is big, the losses can be too.

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Acorns adjusts the stocks and bonds in the portfolio based on market conditions and investor profiles to balance the volatility.

Factors Affecting Returns

Multiple factors affect this Acorns portfolio. Market fluctuations and broader economic changes play a big role in performance. For example, global events like geopolitical tensions or pandemics can cause more volatility and impact returns.

Investor sentiment can move asset prices and impact the portfolio. When investors are bullish, stock prices rise, and when they’re bearish, stock prices fall. Interest rates and inflation trends are big economic indicators that affect returns. Higher interest rates mean lower stock prices, and inflation erodes the real value of returns.

The aggressive portfolio has had a bigger drawdown during crashes than the S&P 500. This means more gamble for clients as they’ll have to stomach bigger losses during market downturns.

Risk Tolerance and Suitability

For individuals with a riskier investment style, the aggressive investments account is designed for big growth over a longer time horizon. Those who can handle volatility and are willing to accept short-term losses for long-term goals are best suited for this type of portfolio.

Younger investors or those just starting their financial journey often prefer offensive saving options for the potential of compounding returns over time. This strategy allows them to ride out market fluctuations and recover from losses and achieve big growth. Account holders in aggressive portfolios are looking for fast growth and are prepared for the short term losses that come with it, including investments for kids.

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A conservative portfolio is focused on capital preservation and steady returns so it’s more suitable for individuals nearing big financial milestones like retirement. So understanding the difference and investment horizon is key when deciding between aggressive and conservative investment strategies.

Aggressive Portfolio Acorns vs Other Investment Options

When comparing the difference with other investment options, you should compare it to benchmarks like the S&P 500 which has returned 10%-11% per year from 1950 to 2022.

This Acorns account however has historically underperformed this benchmark with estimated returns of 6%-10% on average due to the inclusion of international equities and diversification across multiple markets.

This portfolio has more stocks than the Conservative or Moderately Conservative portfolios which have bonds and other low risk assets. More stocks means more volatility and risk, but also potential for more returns.

If you want a balance between growth and stability, other portfolios with a diversified mix of stocks, bonds, and cash may be a better fit. But if you’re willing to take the risk/reward trade-off, it’s a good choice for lifelong wealth building.

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Fees and Costs of the Aggressive Portfolio by Acorns

Investing in this Aggressive Portfolio comes with costs that subscribers need to consider, including Acorns fees. Acorns charges a monthly fee ranging from $3 to $12, depending on the service tier. These flat fees can be a big percentage of the total investment especially for small account balances.

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Besides monthly fees, the expense ratios of the funds range from 0.04% to 0.22%. Account-holders also pay a $35 fee to transfer each ETF to another brokerage which can add up over time. These fees however are in line with standard practices.

How to Start Investing in an Aggressive Portfolio

First, create an account through the Acorns app or website. Once logged in, go to the ‘Invest’ section to access your portfolio settings. Here you can see different portfolio options by selecting the ‘Risk’ tab which will give you more information about each portfolio’s composition.

To switch to the aggressive level simply select it and confirm. Acorns will then rebalance your investments to match the new portfolio’s allocations. Rebalancing is important to keep your investment scenario in check during market volatility.

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Acorns has automated features to make investing easier. For example, it automatically invests your spare change from purchases into expertly designed ETF portfolios. Setting up automatic direct deposits can also help you increase your investment contributions over time. These features help you create a personalized investment plan at your own pace.

Benefits and Drawbacks of this Portfolio

The main benefit of the Aggressive Portfolio is the potential for high returns. It’s heavily invested in stocks so it’s designed to grow over time. This may be suitable for stockholders who are willing to accept big market fluctuations for big gains. Acorns also offers an IRA contribution match for Silver and Gold members which can help offset management fees.

However, the aggressive portfolio has its downsides. The riskier nature of this portfolio means investors need to be prepared for bigger losses, especially during market downturns. This volatility can be tough for those who are not comfortable with big fluctuations in their investment value. Those nearing big financial milestones like retirement may also want to invest more conservatively to protect their capital.

Overall while this Acorns account can grow big, it requires a longer investment horizon to recover from downturns and get the desired returns. Weighing these benefits and drawbacks is key for clients to decide if this portfolio fits their extra money goals and savings approach.

Real-Life Examples of Investors Using Acorns Aggressive Portfolio

Many have used the Aggressive Portfolio by Acorns to grow their wealth. An investor reported a big increase in their portfolio value over 5 years. Another one used Acorns for a quick investment boost and got over 25% returns in under 2 years.

But not all stories are of sky-high success. An investor who started during a downturn shared their experience of navigating volatility but praised the eventual recovery and positive returns. Some have made big gains while others lost money due to market fluctuations, that’s the downside of an aggressive portfolio.

Investor outcomes showed that those who had a longer investing horizon did better even with the initial setbacks. These stories highlight the importance of personalized strategy and understanding your principal situation as investors with different backgrounds got different results.

Overall the various stories of account holders using the Aggressive Portfolio means you need to be prepared for the ups and downward arrow of the market.

Conclusion

In summary, the Aggressive Portfolio from Acorns is a good option for those who want high returns through a high risk investment account. Its 100% stock allocation is designed to grow but comes with big volatility and potential losses. Know your volatility tolerance and investment horizon when you choose this portfolio.

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In the end, this account can be a great tool for durable wealth building if you are prepared for the ups and downs along the way. Make informed decisions, stay the course, and enjoy the journey to financial growth and stability!

FAQs

What is the Aggressive Portfolio from Acorns?

The choice is for investors who are willing to accept more volatility for the chance of higher returns, mostly through stocks. This is for those who want aggressive growth.

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How does Acorns determine assets in the Aggressive Portfolio?

Acorns allocates 100% in stocks through ETFs, big and small company stocks, and emerging market stocks. This is for higher growth.

What are the fees for the Aggressive Portfolio?

The investing account has a monthly fee of $3 to $12 and additional expense ratios for funds of 0.04% to 0.22%; and a $35 fee for each ETF to be transferred to another brokerage.

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Who is this for?

The computation is for those who have higher uncertainty tolerance and everlasting investment growth in mind, especially younger savers who want big capital appreciation over time.

Pros and Cons?

Big returns and continuing growth but you should be aware of the volatility and potential losses.

Remember, this information is not tailored as investment advice. It’s intended for informational purposes and may not suit your unique needs.