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A comment on How Many Mutual Funds Routinely Rout the Market? Zero. Parent comment

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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