Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year). I would like to hear other people's perspectives about how their wealthfront funds did as my colleagues did the same as me and left wealthfront as well.
> This was over a year's time so not short lived by any means.
1 year of investment data is useless. An investor will be invested for their lifetime, we barely have decent data for 1 investor's invested lifetime(about 50 years). A decade comparison is arguably the bare minimum, you really want 20 years, as investments tend to be cyclical by a decade or so.
I can't speak for Wealthfront, but managed "funds" are typically balanced across high and low risk securities. Thus they will obviously lag behind even index funds like SPY/QQQ. Where managed funds tend to show benefits is in times of high volatility or downturns. Ask yourself how many downturns you've seen in the age of Wealthfront. Because I count 0. And 10-15% yearly returns aren't exactly impressive in the last 12 years. SPY stomped those numbers: https://finance.yahoo.com/quote/SPY/performance/
Depending on strategy you can do ok, I'm up over 20%/year going back 15ish years. There's certainly a lot of luck involved but also tolerance for volatility.
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.
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.
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.
The (US) market has done 11% annualized in the last 15 years. 20% is not just "traking the market". It's the difference between going from $1m to less than $5m or more than $15m.
Now, if "15ish years" means "12 years and 9 months, from the exact bottom" then yes, the annualized return has been over 18%.
well it helps that stocks have mostly gone up in the past 7-8 years :) but I typically avg. about 10% a year, one year was a down year but most years its about that.
I ran a very similar experiment. I don't recall the exact dates, but something like 2016 - 2018, and left Wealthfront as a result. I was under the threshold that incurs management fees, but Wealthfront was outperformed by S&P, at least over my time frame.
I never held anything with them during a market downturn, so I do wonder what that might look like. Potentially the lower returns would be justified by the existence of a hedge or holdings in lower-risk assets.
> Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year).
exact same sequence. I was surprised how poorly it underperformed.
I believe I've gotten lucky, but I moved all my money from Fidelity (making, 7% I think?, in a money market? I couldn't understand their UI so I don't recall) to Wealthfront. It currently shows and it's made 15% - 35% over 2 years.
That's not the same. Money doesn't just appear all at once ready to dump on the market, we get and invest it every paycheck. So average cost basis over time gets higher as you make purchases
annualized return is annualized return, his strategy gave him < 9% annualized return and that is being generous, saying he's invested for 4 years not 5.
if you look at SPX returns over the last four years, 2018 was a negative year but each year after was between 16% and 28%. also 2017 was over 19%.
I mean that applies to anyone in this thread more than me specifically. I'm not saying Wealthfront is the best option, just that I've been fine with it as someone who knows nothing about investing and didn't want to keep throwing money into a savings account. And if we're being picky about time, I'm closer to 4 years in Wealthfront and was up 50% all time a few weeks ago. Still not the best, but better than savings.
