Since February I've had a little money with each of Betterment, WealthFront, and Schwab Intelligent Portfolios. I'm comparing how the robo-advisors do to my own DIY Index ETF portfolio of 32% SCHX, 8% SCHA, 25% SCHF, 30% SCHZ, and 5% Cash. The Robo-advisors are set to whatever "risk" level is closest to 65% equities.
Original Post and 1st Update.
I get one or two PMs each month asking for an update, and the old thread finally hit 6 months so I figured I'd start a new one. Mods, if you find this annoying, let me know and I'll just update via PM or edit old threads or whatever. But about half the PMs are people stumbling on the post via a search, apparently, so maybe it's good to have newer stuff in the search results.
One significant addition going forward. I mentioned in the original post that I'm interested in Robo-advisors because I could literally spend no time at all thinking about money, and if that were the case I might be more comfortable with more than 65% equities. So, I added another WealthFront account at risk level 9, which is 92.5% equities. I'm not sure I'd go that far with my whole portfolio, but I might. Hopefully we get a correction/crash soon so I can see how much worse the High Equity Horse does and whether I think I could stomach that. I just barely added the HEH during October, so no results on that yet, but expect it to start showing up in monthly updates in the comments.
Anyway, here is the February-October data.
Cumulative Returns as a Percentage:
| Date | Comment | DIY | Betterment | SIP | WealthFront | DIY2 | WFHEH |
|---|---|---|---|---|---|---|---|
| 2/7 | Initial Transfer | -1.32% | -1.32% | -1.46% | -0.27% | -0.27% | N/A |
| 2/15 | Everything Invested (Clock starts now) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | N/A |
| 2/28 | 0.16% | 0.12% | -0.21% | 0.03% | 0.42% | N/A | |
| 3/31 | 0.96% | 0.75% | 0.54% | 0.94% | 0.92% | N/A | |
| 4/30 | 2.16% | 2.15% | 1.55% | 1.95% | 2.08% | N/A | |
| 5/31 | 3.57% | 3.68% | 2.43% | 3.57% | 3.35% | N/A | |
| 6/30 | 4.20% | 4.07% | 2.92% | 3.93% | 3.80% | N/A | |
| 7/31 | 5.88% | 6.12% | 5.11% | 6.16% | 5.28% | N/A | |
| 8/31 | 6.13% | 6.54% | 5.58% | 6.44% | 5.69% | N/A | |
| 9/30 | 7.83% | 7.88% | 7.17% | 8.26% | 7.07% | N/A | |
| 10/31 | Opened WFHEH on 10/16 | 9.24% | 9.41% | 8.00% | 9.88% | 8.42% | 0.00% |
I should mention that WF harvested 2.1% of tax losses, so in the 10% marginal bracket they would be at 10.12% instead of 9.88%.
I should also reiterate that this is not investment advice, I have no relationship with any of the roboadvisors, I've been a Schwab fanboy for many years and I'm disappointed that SIP isn't performing as well as the others. I think it's too early to draw any firm conclusions, but that cuts both ways. You shouldn't race over to WF and stick all your money there because of this dinky post, but on the other hand if someone says they're going to stick everything at WF you shouldn't berate them for paying a 0.25% fee instead of doing it themselves.
Personally, aside from opening the HEH account, I'm keeping everything on the same plan as before, DIY indexing. If there is a market correction of 10%-ish and B or WF continue to match/outperform DIY, then I'll probably start adding new money to a robo-advisor and maybe even shifting old money over when the capital gains wouldn't hurt.
Submitted November 01, 2017 at 09:12AM by plexluthor http://ift.tt/2A5MqCz
