How we build your custom investment portfolio

When you sign up with Dvdendo, we’ll build and monitor a custom investment portfolio based on your goals and needs.

What does it mean to have a custom investment portfolio? Here’s a breakdown of the steps we’ll take to create a portfolio that’s the right fit for you.

#1. Ask a few questions to determine your risk personality.

Before opening your account, we’ll ask you a few simple questions. Don’t worry—you shouldn’t need to call your accountant to answer any of these. And you can always change your answers at any time to create a new mix.

In addition to simple stuff like your age and your income, we’ll ask you more personal questions like:

  • What are your investment goals?
  • How long do you plan to stay invested?
  • What’s your risk tolerance?

Your answers will help us determine the invest strategy for you. The general rule of thumb is that the longer you plan to stay invested, the more likely you are to withstand occasional bumps in the markets.

Based on your unique answers, we’ll recommend a portfolio classification (anywhere from “conservative” up to “aggressive”) that will help you achieve your financial goals. You can manually adjust your exposure, or risk tolerance, whenever you like.

#2. Select your assets.

At this point, we know your basic goals and have a better sense of your financial picture. We then apply an automated process to select the optimal mix of investments. This process leverages real-world market experience and proven quantitative methodologies with the cost savings power and efficiency provided by modern technology.

Your portfolio will include a broad diversification of asset classes with different risk and return characteristics. We have carefully selected a set of exchange-traded funds (ETFs) from some of the largest, most well known providers such as Vanguard and Blackrock. Our financial professionals take into account important factors like expenses, daily trading volumes, total market capitalization, and tracking error.

Although your portfolio mix is custom, we use only ETFs in all of our portfolios because of the liquidity, diversification, and low management fees they provide. (Learn more about ETFs in our blog post.)

#3. Construct your portfolio.

We’ve done an exhaustive study of multiple asset classes, their returns, historical volatility, and correlations. Utilizing the Nobel Prize-winning framework of Modern Portfolio Theory, we’ll select a mix of ETFs representing different asset classes that aims to maximize your portfolio’s returns while respecting your individual tolerance for risk.

Each of our portfolios is composed of eight securities from an eligible list of nine Dvdendo ETFs. A few examples of these ETFs include US Stocks, Corporate Bonds, Inflation-protected Bonds, and Emerging Marketing Stocks.

Dvdendo also reinvests your dividends automatically. This is called continuous rebalancing. Rebalancing your portfolio periodically and making sure to reinvest your dividends is important but not easy to do on your own. Tracking drift in each asset class and trading your portfolio on your own can be both time consuming and expensive. Dvdendo, however, does all of this for you as a fundamental feature of our service.

Learn more about Dvdendo’s investment strategy