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How Stash Chooses Investments To Help You Build Your Portfolio

April 26, 2018

4 min read

Stash customers often ask us how we choose our investments, which include the 40+ exchange traded funds (ETFs) and 25 individual  stocks that you can currently purchase on Stash.

It’s a great question, and I wanted to take a moment to describe how we make our decisions.

How we choose funds

When it comes to selecting the funds we offer on Stash, we have a very deliberate and purposeful investment strategy. In fact, all of our decisions begin with an internal investment committee that carefully screens every fund and stock that you can purchase, with a goal of giving you the broadest exposure to the market possible.

We primarily offer exchange-traded funds (ETFs), which are baskets of securities that trade on an exchange, and either follow an index or some other specific set of investing guidelines. Our objective is to offer ETFs that are straightforward and follow a transparent process for security selection, based on concrete rules.

By holding these types of funds, we think investors can reduce risks that the performance of their holdings will deviate significantly from the indexes that the ETFs track, or the investment approaches that the funds have chosen.

In short, you as investors will have an idea how your investment can perform over time, based on market conditions.

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Investing in what matters to you

That goes equally for a fund that may follow an index of companies that have social goals to promote worker equality, or one that might follow the stock picking strategy of large hedge funds.

Stash also chooses ETFs from the leading fund providers. Blackrock’s iShares, Charles Schwab, PIMCO, State Street Global Advisors, and Vanguard, are a few of our fund companies, and they are among the most recognized names in the investment world. These companies have long track records creating some of the most successful funds in the industry.

Additionally, our ETFs represent important economic sectors, which will can give  you the broadest possible exposure to markets. These include equity funds that focus on consumer staples, energy, financial services, healthcare and technology, to name a few. The funds also allow you to invest in both corporate and government bonds.

We want the mission of each fund to be clear, so our investors know what they’re buying.

All of our funds must also follow easily recognizable themes. For example, our funds might follow companies innovating in sustainable energy, or pushing the envelope on robotics, or companies actively seeking to conserve and supply water globally.

Finally, while accounting for all the considerations above, we try to minimize the costs associated with owning and trading an ETF, to help you maximize your returns.

You can buy fractional amounts of those funds, starting with just $5, making it simple to invest in a lot of things that interest you without spending a lot of money.

Explore all the funds we offer on Stash here.

How we choose single stocks

But Stash also lets you purchase single stocks of several dozen prominent U.S. companies. (More specifically, we let you buy fractional amounts of those stocks, as the individual price per share of some stocks might be quite high.)

And many of the same principles we apply to picking our ETFs, we also apply to the stocks we offer for sale. We choose primarily “blue chip” stocks, from some of the largest and most easily recognizable companies in the world. These companies typically have a long record of trading, with strong revenue, and profits.

The individual stocks we offer must also be from companies that have a market cap of at least $10 billion, and they must be liquid stocks.

That means there’s typically a high market demand for the shares, and they can be easily bought and sold by investors. The individual stocks we choose also can’t be thinly traded, which means the volume of shares traded on a daily basis must exceed $50 million.

Most important, we try to offer stocks that you’ll be interested in. These include a broad range of selections, from innovative technology companies to classic U.S. consumer products companies.

What you won’t find Stash selling are lesser-known stocks that are traded on unknown exchanges, or stocks from foreign companies that haven’t established a significant U.S. presence.

Explore all the individual stocks we offer on Stash here.

We’re always working for you

Here’s something else to keep in mind: Every quarter we carefully monitor the individual stocks we offer. If they fall below our criteria, we remove them from our list.

At Stash, our goal is to help you build a diversified and successful portfolio that will allow you meet all of your financial goals, whether that’s purchasing a home, saving for retirement, or some other objective with your money. We want to be here for you now, and in the long-term.

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By Mychal Campos
Mychal is the Director of Investments at Stash

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Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.