Why can't I buy VTI and dividend reinvest? I compared that to Betterment since 2004 and it wins handily. What am I missing? Tax loss harvesting sounds fancy but what's the actual bottom line benefit after fees?
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What's The End Goal for Wealthfront and Betterment? (2016)
121–130 of 134 posts
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#122Earlier quoted context omitted.
Yeah. If you have $50,000 in gains but $53000 in losses, then that's called a bad year. You still aren't getting around the fact that you made a crappy investment somewhere to generate that loss.
Every portfolio has a mix of gains and losses if it's well diversified. I have gains that offset the losses elsewhere, but a reasonable chunk of those gains is offset by losses realized in parts of the portfolio that didn't do so well. If you have a diversified portfolio that is all gains, I think you're probably not actually diversified.
Vanguard total market.
Diversified, but generally speaking it gains every year.
And no. Your portfolio is not as diverse as the entire market. Period.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#123Earlier quoted context omitted.
why don't Silicon Valley firms partner with existing smaller banks looking to do more with their balance sheets? seems like if their ideas are truly disruptive it would be a win-win for both parties.
Banks are heavily regulated and the government forbids such investments. > The FDIC permits insured state banks and their subsidiaries to undertake only safe and sound activities and to make investments that do not present a significant risk to the deposit insurance funds https://www.fdic.gov/regulations/laws/bankdecisions/InvestAc...
They don't have to make risky investments in these companies. They could collect the deposits and provide them to betterment/wealthfront, while they split the fees. The robo-advisors could cut their acquisition team and focus on the algorithms and the small banks could cut their advisor staff. It's basic synergy.
It's a risk free method for partnering small banks with innovative companies.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#124Earlier quoted context omitted.
Wealthfront buys the individual shares that track an index. When shares lose value, they'll sell those and buy other shares that are equivalent. It worked pretty well for me in 2016. I was up ~11% total and about to deduct about 6% in losses.
However, that 6% is capped by the IRS at $3,000 per year.
It's nice that the rest of the loss can be carried over to future years.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#125While we're on the topic of robo-advisors, I'd love to see a robo-advisor that lets clients customize a portfolio allocation and just advises them on when and what to trade to keep their portfolio balanced on a regular schedule, for a fixed fee. That is, instead of these so-called robo-advisors that are actually robo- managers , in the sense that they manage your portfolio and trade on your behalf, and are compensate…
Another shameless plug: I made a service like this for myself and a few friends: https://zenve.st
It actually trades on your behalf, but only to keep your portfolio balanced and to allocate any cash you deposit into the account. It works on top of Vanguard, and you can customize it to invest in any Vanguard ETFs with whatever allocation you want.
Currently, you can only sign up for the waitlist, as I don't know if people would be interested in something like this.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#126Earlier quoted context omitted.
I use Wisebanyan as well and would recommend it
According to a link about performance from a comment above, Wise Banyan has done pretty well over the last three years. https://senzu.io/investing/robo-advisors
Market is up many 10s of percent. Everyone has done well over the past few years.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#127Earlier quoted context omitted.
Shameless plug, but I'm actually working on a product that does exactly that. It started as a personal tool that integrated with my brokerage account to take the hassle out of rebalancing and knowing which trades to make with my monthly contributions. It currently only works with Questrade, but I'm looking at adding support for more brokerages. https://rebalancr.com/
Do you have a screenshot of what it actually looks like when using it?
Yeah, I just updated the landing page with a screenshot. It's pretty basic and unpolished at the moment, but I'm working on some improvements.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#128While we're on the topic of robo-advisors, I'd love to see a robo-advisor that lets clients customize a portfolio allocation and just advises them on when and what to trade to keep their portfolio balanced on a regular schedule, for a fixed fee. That is, instead of these so-called robo-advisors that are actually robo- managers , in the sense that they manage your portfolio and trade on your behalf, and are compensate…
that's a good insight. i also tend to think advice and sales should be done by separate parties. otherwise the advice won't be independent or bias-free.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#129Earlier quoted context omitted.
Every portfolio has a mix of gains and losses if it's well diversified. I have gains that offset the losses elsewhere, but a reasonable chunk of those gains is offset by losses realized in parts of the portfolio that didn't do so well. If you have a diversified portfolio that is all gains, I think you're probably not actually diversified.
Vanguard total market. Diversified, but generally speaking it gains every year. And no. Your portfolio is not as diverse as the entire market. Period.
Of course it isn't. But which market?
Anyway, we are talking past each other.
Re: What's The End Goal for Wealthfront and Betterment? (2016)
#130This article didn't mention it specifically, but Betterment already put in a rate hike. You used to be able to get 10 basis points if you had over 100k and they just increased that to 25 in a really underhanded way. I had been using Betterment for about 2 years when they did this. I had been happy with Betterment but it's clear that they want to get as many people in under the low rates and slowly increase it on you,…
Yeah, that was really disappointing. I'd bought into the Betterment kool-aid, and shortly after funding my account, I saw their 'price increase buried in an unrelated product announcement' email. I think these companies (Betterment, WealthFront, etc) are struggling with really high customer acquisition costs that take quite a while to break even on. I'm sure that not many people noticed/cared enough to transfer out (…
Yep, I agree. I signed up based on the rates at the time, thinking they wouldn't change THAT often. But it sounds like this is going to become more common.
I'm in the process of moving everything to Vanguard.