How Many Mutual Funds Routinely Rout the Market? Zero

Re:How Many Mutual Funds Routinely Rout the Market? Zero by rb2k_ on Sunday March 15, 2015 @01:37PM (#9207272)

I personally use Charles Schwab (just because I have my bank account with them) and Wealthfront to invest in ETFs.

Schwab is comparable with Vanguard in terms of fees and ETF availability, so I never bothered with opening up an extra account at Vanguard.

I use Wealthfront to diversify my ETFs. They take care of distributing the money I put in the account among several areas of the market (U.S. Stocks, Foreign Stocks, Emerging Markets, Dividend Stocks, Natural Resources, Municipal Bonds and Cash).

They mostly use Vanguard funds. I could probably also do this myself, but I don't really want to manually balance my portfolio every time asset classes go up and down. So far I only put the amount of money in there that they manage for free. If you intend on signing up, one word of caution: I signed up on their homepage and had 10k under free management. If you sign up via a referral link, you get 15k. I'm still slightly annoyed that I didn't use one when opening an account. I know that it's against the usual HN policy to post them, but since it is detrimental to sign up without one, here we go: http://wlth.fr/196dDW2

(I'd check with my friends first to see if one of them is already on the platform)

p.s. this is US centric.

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by danielodio on Sunday March 15, 2015 @02:27PM (#9207452)

I've tried both Wealthfront and Betterment and found Betterment to be much more usable. It's out-performed Wealthfront in the past 9 months or so (but over the long-term my guess is that they'll both perform similarly) Have you tried both? http://danielodio.com/betterment-vs-wealthfront-which-one-wi...

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by rb2k_ on Sunday March 15, 2015 @05:41PM (#9208279)

I looked at both of them initially. As far as I recall, at least back then, the fee structure for people that initially only have a small amount of money invested (10k or so), Wealthfront was slightly better.

I also like Wealthfront's UI. Not that I'd do a whole lot besides click the "add more money" button and look at the graph. Turbotax import worked nicely too.

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by aet on Tuesday March 24, 2015 @11:07AM (#9257028)

Looking at fees I think you will be better off at Vanguard if you have at least 10K. You can also get Vanguard Target Retirement with 1k and expense ration of 0.18.

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by matwood on Sunday March 15, 2015 @03:12PM (#9207637)

There is an entertaining public fight going on between Wealthfronts and Schwabs CEOs about their robo-investor options. Once the big boys get involved I have a feeling Wealthfront, Betterment and others are going to feel the pinch. Schwab has their offering now with zero fees (except for those from the ETFs owned).

https://intelligent.schwab.com/

I have a test amount of money at Betterment now, but am researching about moving it to Schwab.

The best thing Vanguard ever did was drive down costs across the industry.

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by idyllicshine on Sunday March 15, 2015 @03:30PM (#9207718)

There are some downsides to Schwab's zero fee robo, from Wealthfront CEO's perspective: https://medium.com/@adamnash/broken-values-bottom-lines-3d55...

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by matwood on Sunday March 15, 2015 @04:17PM (#9207941)

If you're going to post the argument, probably post both sides :)

http://www.aboutschwab.com/press/statements/response-to-blog...

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by rb2k_ on Sunday March 15, 2015 @05:43PM (#9208289)

These are the two posts I still have on my "read later" list. I assume both of them are pretty good compared to other options (stock picking, mutual funds, ...) :)

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by gergles on Sunday March 15, 2015 @03:29PM (#9207713)

Schwab forces you to keep at least 6% of it in cash, which is an incredibly bad idea and does do significant damage to your long-term returns.

The rumor mill is that this is how Schwab makes profit instead of advisory fees.

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by matwood on Sunday March 15, 2015 @04:15PM (#9207933)

Do you have any backtest links that show a small cash position 'is an incredibly bad idea'?

A small cash position is another diversification strategy. As your portfolio increases in value, taking some profits to cash and then having it available on the dips may be perfectly valid. Buffet himself has called cash the never expiring call option.

EDIT

Schwabs CEO defends small cash position.

http://www.aboutschwab.com/press/statements/response-to-blog...

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by aet on Sunday March 15, 2015 @04:42PM (#9208023)

How does this compare to target retirement funds?

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by rb2k_ on Tuesday March 17, 2015 @02:27PM (#9220140)

As far as I understood, target retirement funds will switch the allocation from stocks to bonds once you get close to retirement. With the robo advisors, you'd have to manually move your risk tolerance downwards.

I personally would hate to have that happen in an automated way. I don't want the fund to automatically move over during an economic downturn. I'd rather have it happen while the S&P is at a new high :)

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Re:How Many Mutual Funds Routinely Rout the Market? Zero by kleer001 on Sunday March 15, 2015 @02:50PM (#9207550)

Yay Schwab!

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