The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: tll1975 on January 19, 2017, 07:58:00 PM
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so i signed up for FutureAdvisor, and linked my Vanguard Roth to it, years ago and totally forgot about it and never did a thing with it. About 3 months ago, I randomly stumbled back onto it and logged in. I was surprised to find that it had been tracking my Vanguard Roth for like the last 6 years. Because of that, I was able to sort of backtest the performances of the two. What i found was that my Vanguard Roth (80/20 split) basically yielded 4% and with futureadvisor (taking fees into acct and a similar investment portfolio and strategy) would have yielded 7%! Yes it has been a bull mkt but still, that's pretty impressive for a set it and forget it strategy. And with the frequent auto-rebalancing these robo advisors do, even in a down mkt, I think it would have beat Vanguard. Not bashing Vanguard mind you. I put my mom's money there. I like em. I'm just saying...
just thought i'd share. happy saving
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Nice! Thanks for sharing. Glad there is an upside to these things on occasion.
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The last six years with an 80/20 split of vtsax to whatever the total bond fund is at vanguard should have yielded much much more that 7% annually. If we just assumed vtsax returns on 80% of the money it would have been around 10%.
So something is incorrect in how you're allocated.
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well some of my vanguard is the basic target retirement fund but, i have other riskier index funds in the IRA as well as some total bond mkt index. So i might not have been rebalancing as often as the robo but, I still think the robo beat Vanguard.
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Are you sure that you are comparing similar investing allocations? If you had it all in appropriate index funds such as VTSAX/VBTLX 80/20, this should have had an annual return of around 8% over the past 6 years.
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robo didnt beat a reasonable vtsax to vbtlx alocation as indicated above. you have poor data points.