Is Betterment just a bit rubbish? Or is it because I'm losing everything in fees?
Where am I going wrong?
Yup. You're paying the a fee just for them to put you into funds you easily could have selected yourself at Vanguard, on top of whatever the expense ratios on the funds themselves charge. And like the others have mentioned, the market hasn't been doing well this year (lots of wobbly volatility seesawing). So it's really obvious right now that you're not earning jack, since the growth margin is so razor thin. Imagine if we were still having pretty great growth in the market... you'd not notice the fees at all for years and lose so much of your money (both to the immediate fee structure, and future growth since the money taken out in fees now isn't there growing and compounding for you).
If possible, just get out of Betterment, open an account over at Vanguard and invest in your 90/10 stock/bond allocation there, and stop worrying over it. Automatic tax loss harvesting is the only marginal advantage to having Betterment, and that goes away (or drops substantially) and is probably not even enough to cover the fees if you even get to do it (not totally clear on what levels they actually do tax loss harvesting at Bettement) if you have a low amount of money invested. If you can't stop looking at it daily/weekly/monthly without anxiety, then you need to read things like Jim Collins' stock series, and get a better understanding about the short term stuff (and not sweating it when it goes down or flat for months). The market trends upwards over the long term, but looking at it in terms of days/weeks/months means you're going to see lots of ups and downs - you can't let that get to you since you aren't investing for that short a time period. You should look at decades, not months...
http://jlcollinsnh.com/stock-series/^really, read this whole series. You'll feel better once you understand how it all works (and it's well written and entertaining)
http://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/^this is part of the series (good primer on not looking at the short term)
http://jlcollinsnh.com/2012/05/09/stocks-part-v-keeping-it-simple-considerations-and-tools/^keep it simple investing advice (or "no, you don't need Betterment")
I'm a bit saddened over MMM's promoting them for any reason - paying an advisory company to do something you can easily do yourself seems so wrong and against his original philosophy - seen here:
http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/ And read the comments (paying particular attention to poster Dodge in this topic on MMM's main blog:
http://www.mrmoneymustache.com/betterment-vs-vanguard/http://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/^ investment advisers suck, and Betterment is basically just a training wheels robo-adviser that is encouraged for those that have no clue about investing and don't ever want to have a clue, but you're reading and asking questions so you should just keep learning and do it yourself!
Trust me, if I can do it anyone can... I knew NOTHING just a few years ago, and now I am 100% confident in my investing choices and even manage my mother's accounts for her (with her blessing). Read Collins' series and keep asking questions until it makes perfect sense to you. You can do this! :)