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UBS Acquires Wealthfront for $1.4B

reuters.com

281–290 of 330 posts

Re: UBS Acquires Wealthfront for $1.4B

#281
post #212

Earlier quoted context omitted.

I started with and was a Wealthfront customer for many years. I'm appreciative and credit them with starting my education and understanding on investing. What caused me to leave? - They aren't global portfolio aware. Bonds belong in tax advantaged accounts, then taxable. If you've maxed out your 401k/IRAs in Bonds that $ as an absolute percentage should be accounted for in your taxable portfolio construction. - They…

Why do bonds being in tax advantages accounts? My gut would suspect the opposite, since on average stocks will have higher return so you'll want them getting the tax break.

Bonds have defined maturities and bond indexes are made up of a mix of short, medium and long term bonds. So over the course of time, old bonds mature and pay out (taxes due).

Equity indexes have no maturity date and can limit any taxable income to dividend only which get preferential treatment in terms of taxes.

Re: UBS Acquires Wealthfront for $1.4B

#282

Earlier quoted context omitted.

If you have planned to contribute $500K then presumably your plan involves making the money liquid with the necessary few days anticipation. Also, my Wealthfront account is offering me approximately 25% "Available to borrow". I haven't tried it yet but I assume I could grab that immediately and then sell stock to pay back the loan. I'm not challenging your claim that having a human financial advisor can be useful. I'…

Their margin loan feature isn't much faster in my experience. ~2 days to open the initial request, 2 days to transfer via ACH, couple more to clear. I don't remember if there was a wire transfer option or not. Overall I still appreciate how easy it was to use

The Wealthfront happy paths seem to be ACATS transfers of brokerage holdings, or $250k (per day) ACH to/from a bank. They don’t have wire transfers. They can mail checks drawn on a Green Dot cash account but only up to $25k, which probably means they don’t have cashier’s checks.

https://support.wealthfront.com/hc/en-us/articles/3600392637...

Re: UBS Acquires Wealthfront for $1.4B

#283

Earlier quoted context omitted.

Neither are robos. Rebalancing according to some rules isn't active management. Vanguard has more active management products, actually. Besides their Windsor fund, S&P 500 is an actively managed index.

Robos are actively managed, just not by human, and their fees reflect this. If they’re not actively managed then they make even less sense since they’re more expensive than indices that have better historical returns…

You can't invest in an index so the returns are fictional.

An index ETF sure, but it might be worth paying for tax optimization over that.

Re: UBS Acquires Wealthfront for $1.4B

#284

I'm honestly shocked at how primitive the big firms' offerings are. For example, JPMChase's bank account is smart enough to see a payroll deposit and give you a comment modal suggesting that you invest the money with JPM's investment platform (YouInvest/whatever) Log into the investment platform and you're back in 1993. They literally have no drip-investment style offering. They want to charge you 100bps to "manage"…

> Why the heck isnt JPMChase buying one of these platforms?!? ]] Broadly speaking, the retail market can be segmented on two axes: net worth and involvement. Low net worth, high involvement are day traders: they are profitable through fees, PFOF, et cetera . High net worth, high involvement doesn’t tend to exist long enough to specialise in; they’re, professionals, have better things to do or lose their money. Low ne…

What constitutes a high net worth for these purposes?

Re: UBS Acquires Wealthfront for $1.4B

#285
post #270

Earlier quoted context omitted.

It's not a flex, I'm just saying that it's not super rare for people to get those returns. If you're really doing 45% that's above and beyond though and would be curious what your strategy is.

If you're getting 20% returns you've quit your day job and are doing this exclusively, right?

Not GP, but there's no secret sauce here. VTSAX is up 25% each of the last three years, and it's hardly unique. The market has been doing well. Things that track the market will also do well.

Re: UBS Acquires Wealthfront for $1.4B

#286

Earlier quoted context omitted.

do people even use Cash though? all my buddies just use interac

They *just* launched, and they've been pushing a lot in University towns. I don't know how successful it'll be, but every single one of my friends has WS Cash, and if I ever had to send them cash I'd first ask if they'd use Cash since it's so much simpler than Interac. Unfortunately, most people say no right now since the WS Cash Card is really weak (so no point in using it) and it takes a couple of days for you to w…

There is no way this catches up to e-transfer in popularity. Everyone in Canada knows about venmo and cashapp and the various other scam versions of e-transfers that people are forced to use in America and they laugh at them for it.

E-transfers are literally the best part about Canadian banking.

Re: UBS Acquires Wealthfront for $1.4B

#287
post #131

I've been researching robo-advisors quite a bit recently. They are really interesting and innovative. I'll preface by saying that I have been talking to a lot of financial planners (at top-tier institutions). They basically set you up with a good set of ETFs, hedge funds, etc. and rebalance occasionally. Sometimes they do tax-loss harvesting. They also provide a few other nice little services. But at the end of the d…

>> Yes, a financial planner can do all of this (although most don't). But when they do, they just use automated software to do it. It would be impossible to implement these strategies manually. So why even go with a financial planner when Wealthfront does the same thing, but better/cheaper? Thats the 100$B question right? Because fear. Because unfamiliarity. Also because 1% seems small, but its really more like 14% (…

The difference between 7% & 6% (1% fees) is in fact a LOT higher if one takes compounding into effect.

By Year 40:

* >$500K &

* ALMOST a quarter of the portfolio

When I was starting out, someone in my company's 401k forum mentioned this # (at that time the # was almost 40%, fees have gone down a lot since the early 2000's). And I am glad I paid attention.

I try and pass on this wisdom everytime I can. Now, you can too.

Here is a NerdWallet article on this topic: https://www.nerdwallet.com/blog/investing/millennial-retirem...

AND

My attempt at recreating their math (TL;DR: It matches, almost): https://docs.google.com/spreadsheets/d/1QTa4XBIUgnLCt_lo6x0n...

edit: for formatting

Re: UBS Acquires Wealthfront for $1.4B

#288
post #191

Earlier quoted context omitted.

* Edward Jones will do it for you for ~ 2%/yr, which is ridiculously high. * Any of the big banks or brokerages will do it for less than Edward Jones. * Almost any financial advisor will do it for about 1%/yr in fees(not ridiculously high, but not remotely cheap) or fee-based for a few hundred an hour with a 1st time setup of $4-10k, more than $10k is unreasonable. * The robo advisors(of which their are dozens with b…

> At least one firm will do it for $200 first year and $100/yr after that Can you share that one? PM me if preferred. I'm on a similar quest and so far I've found pretty much everything else you've found. My wife is a high income earner too and she's happy with the 1%/yr people that she likes, but I think we can get similar results for noticeably less. Even 0.5% would be reasonable. As you know, from $1m to $2m that…

[deleted]

Re: UBS Acquires Wealthfront for $1.4B

#289
post #279
post #270

Earlier quoted context omitted.

If you're getting 20% returns you've quit your day job and are doing this exclusively, right?

And has he got a coin to sell you! He's either not really getting 20% or is cheating on his taxes. Source: I have a personal relationship with my auditor, and I'm pretty sure he hates me because I don't willfully cheat on my taxes.

Nothing to sell here unless you want to invest in my next company. I do pay all the taxes I owe. The curse of good luck is I don't have much reason to believe my future returns will continue to be so good.

Re: UBS Acquires Wealthfront for $1.4B

#290

Interesting, the figure does seem quite low to me. Boglehead passive investing has worked really well for the past dozen years. I expect the next 10-15 to be much more challenging given the extremely high starting valuations and end of the low interest rate and QE tailwind. I've been building algotrading models to help tackle the challenge of when to hedge at https://grizzlybulls.com

A couple questions about your service/models:

1. It seems likely your models work internally with probabilities vs binary buy/sell decisions. Why do you not have the option to expose this probability, vs just simple buy sell signal? I would think this would pair very nicely with asset allocation. Have you investigated performance when using a sliding asset adjustment (even if just sp500 future & cash) that corresponds to model confidence, vs the binary win/lose bet system? Does slippage from frequent adjustment dominate the gains, no matter the adjustment threshold?

2. At a lazy glance, it seems trivial to boost performance with leverage on buy + shorting on sell, assuming the model really retains its backtest-heavy predictive power. Is this ignored just to remove black swan risk, or is there something more fundamental?

Obviously a 0 leverage buy sell signal is very marketable and low friction, fitting for a SAAS product, but it seems you could do even better with skills you obviously would possess if actually capable of making such a "god" level market predictor. Your posts are full of other seemingly more complicated strategies with somewhat contradictory capital levels throughout the years so it further adds to the main crux of confidence here: That you discovered a top 1% hedge fund caliber model individually as a mid tier SWE early retiree and suddenly offer it to all for an attractive price, without already being sure you can fuck off to a private island with the power of 50%+ CAGR, ignoring the rest of the world. You are also very sparse on details regarding your "proprietary anti-overfitting" methodology, when overfitting is of course the well-memed downfall of 99% of algo trading techniques that claim to meaningfully beat the market. To say nothing of the backtesting window conveniently starting after 2008, lack of VIX hourly data or not.

Disclaimer: I've spent the last 8 hours or so digging through your entire SA, reddit, and HN post history. Initially I dismissed your site as 80% likely scam, 19% naïve backfitted and overfitted waiting-to-be-raped-by-bear-market drivel, etc. But now I'd say I'm operating on a more optimistic 5-10% chance there is something legit here. You might actually just have researched sufficiently in all the right places, implemented a legitimate edge through extensive pareto culling via the yet virgin power of code, and had the perfect balance of libertarian desires to motivate you and yet progressive ideals to democratize it. As well of course as this being a genuine passion project that you are excited to share with others.

I currently work overemployed at FAANG, capital accumulation focused, but I've always held attempting to pareto market timing with a ~99-1 EMH assumption as my main FIRE project in the back of my mind for the past couple of years. I came to the weak conclusion with my pareto^pareto research of the idea that attempting to limit drawdown via algorithmic tactical allocation on SP futures (for liquidity) via macro + TA indicators seemed the best method. So, I am very intrigued to see someone who essentially appears to be me born 5 years earlier doing that exact thing.

Rereading this, I don't mean to come as aggressive/hateful; regardless of how the future treats your models this is a very thought provoking and exciting project!

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