M1 Finance is an automated investment platform where investors can invest in stocks, ETFs, and various portfolios. Individuals can adjust the percentages in their “Pie” portfolio. The system will then automatically allocate funds to different financial assets upon deposit.
The automated “Pie” portfolio makes it quick to invest in different financial assets. It helps save time and the need for manual calculations. An investor can also buy an individual stock rather than allocating their deposits across various assets.
In this article, I will go over the different features of M1 Finance, how fractional shares can increase your exposure, and how you can buy individual stocks on the platform. In the end, I will also discuss whether or not M1 Finance is the right platform for investors.
Let’s get into it!
Does M1 Finance have automatic investments?
M1 Finance is an automated trading platform, which means that it does have automatic investments. To take advantage of such a feature, individuals must set up automatic transfers from their bank account. Once done, your automated deposits will start to flow into your M1 Finance account. It is then allocated according to the “Pie”.
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Can you make changes to the “Pie” on your M1 Finance account?
M1 Finance refers to an individual’s investment portfolio as “Pie”. Individuals can allocate percentages from the portfolio to their preferred financial assets that are known as a slice. You can change the allocations of the Pie as per your investment strategy’s needs. Investors can even add or remove certain financial assets from their Pie too.
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How do you add a slice to your Pie on M1 Finance?
Using your M1 Finance mobile app, head to “Portfolio” under the “Invest” tab. Here you can add a slice by clicking the blue “+” button. Select the financial asset you wish to add to the Pie and click “done”. Please note that you won’t be able to save your portfolio until the total percentages of the slices equal 100%.
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Can you buy individual stocks on M1 Finance?
Besides fractional shares, M1 Finance allows investors to buy individual stocks on the platform. Users can do that from the app by following the instructions below:
- Deposit money into your account.
- Select the desired slice of the Pie.
- Click on “manage slice” and place a buy order.
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Is there any requirement for a buy order on individual stocks?
Placing a buy order requires your account to have available funds. Although your bank account might be linked with the M1 Finance account for automatic deposits, the brokerage will not withdraw directly from your bank to fulfill the buy order. If the investor’s available cash is below the required amount for the order, the platform will adjust the buy order accordingly.
Can you place a sell order for individual stocks?
Just like how you can buy individual stocks, investors can also place sell orders for them. Select the slice of the Pie you wish to sell and place a dollar amount for the sell order. Once you receive the money, it will either be used for a buy order, held in cash, or invested in your portfolio. It all depends on your cash balance control settings.
Why is your buy order pending after you have deposited the money?
After putting a buy order, the platform shifts the order to the “Pending orders” section. These pending orders get fulfilled in the next trade window. M1 Finance allows one trade window on the free account and two trade windows on the M1 Plus account. Upgrading to the M1 Plus account will cost you $125 in yearly subscriptions.
What are the timings for the trade window on M1 Finance?
There are two trade windows on the platform. The morning trade window is available for all users and opens at 9.30 AM EST on business days. While M1 Plus users also get access to afternoon trade windows that open at 3 PM EST. The trade windows close when all orders get fulfilled.
Can your order be fulfilled during non-trading days on M1 Finance?
Trading on M1 Finance follows the NYSE. Whenever the NYSE is open, M1 Finance completes all pending trade orders within the trade window. It means that your orders will not get fulfilled during non-trading days. Orders on non-trading days will get completed on the following NYSE trade day.
Can you place buy and sell orders at the same time?
M1 Finance does not allow individual day traders. Technically, it’s not possible due to that one trade window. Investors can not place buy and sell orders at the same time during a single trade window. To do that, you need to have an M1 Plus account with more than $25,000 in your account.
Is M1 Finance good for buying stocks?
M1 Finance is a good option for those looking to invest in stocks and ETFs. It has no trade and commission fees and the automated investing feature is fantastic for passive investors. However, those looking to day trade should look at alternative trading platforms since day trading is technically not possible with one trade window a day.
What happens if M1 Finance goes broke?
M1 Finance is a brokerage that holds a client’s financial assets in separate accounts maintained by their custodian. It ensures that the clients retain ownership of their assets at all times. If M1 Finance goes bust, it does not impact the clients since they can move their portfolio from M1 Finance to another brokerage.
Conclusion: Should you consider M1 Finance for individual stock purchases?
Individuals are drawn to the idea of fractional shares that M1 Finance offers. It means that those who can not afford to buy a single share of an expensive stock can buy a fraction of it. It is fantastic for beginners looking to get exposure to blue-chip stocks.
Besides fractional shares, investors can also buy individual stock on M1 Finance. But is this the right platform to do that?
I find that many brokerages have hidden fees and additional charges on transactions, which definitely eat into the profits. M1 Finance has zero trading fees or commissions, which can really add up to significant savings and be further re-invested into your portfolio.
If you have the money to purchase individual blue-chip stocks and save on trading fees, then why not do it on M1 Finance? Besides blue-chip stocks, you can purchase other individual stocks too.
Remember, M1 Finance is a great online trading platform for passive investors. You can not day trade here and if you’re looking for that, there are other better options for you to explore like Robinhood, Interactive Brokers, and more.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
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1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.