Interesting Investment Advice Site

[MelodysMustache]

I stumbled over https://www.futureadvisor.com/ a couple of weeks ago.  It seems to give decent fund picks based on index investing and having a good mix of asset classes.  I recently rebalanced my portfolio based on the info provided because I felt that I was too heavy in large domestic stocks.  I would not use it to change funds automatically and I would not use it exclusively, but I think it is an interesting input to the investing process.

[thepokercab]

I've used it a bit too.   I only started investing a few months ago, so I don't have much to analyze, but it said I had close to 100% fee and tax efficiency, but that I too was too heavy on Domestic stock.  I make automatic investments into a couple of Vanguard mutual funds but it seemed like they really favored ETFs, which seem to take a bit more work.   

Curious- did you go with their ETF recommendations, or just use it to choose different funds? 

[MelodysMustache]

For the most part I went with the ETF recommendations.  However I plan on rebalancing only every six months because of the transaction fees on the ETF trades.

[Will]

I just checked it out.  WOW!  They want me to change pretty much EVERYTHING!  Interesting things to think about, but I doubt I will make the moves they recommend (although there are some in there that are intriguing!).

[Petunia 100]

I have used it but did not take their advice.  The site seems to favor a very large allocation to Reits.  Also, it does not like my small cap value tilt or my TIPs. I prefer my portfolio just the way it is.  :)

[amha]

I love FutureAdvisor! I keep meaning to write a post extolling their virtues, but you seem to have beaten me to it. They're awesome!

[Brandon Curtis]

Some of FutureAdvisor's recommendations are a little arbitrary, but their Awesome Portfolio Checklist does a great job of summing up what everyone should be doing.
ETFs are great for those who wanted to start investing immediately and can't make the $1000 Vanguard mutual fund minimums, but are willing to do the extra manual work that trading ETFs requires.  ETFs don't support automatic investment, which is unacceptable in my book—the added manual interaction is just begging you to make emotionally-based poor decisions.

If you're also getting hit with transaction fees to trade ETFs, absolutely look elsewhere.  At Vanguard, all customers can trade ETFs for free.

[aj_yooper]

Some of FutureAdvisor's recommendations are a little arbitrary, but their Awesome Portfolio Checklist does a great job of summing up what everyone should be doing.
ETFs are great for those who wanted to start investing immediately and can't make the $1000 Vanguard mutual fund minimums, but are willing to do the extra manual work that trading ETFs requires.  ETFs don't support automatic investment, which is unacceptable in my book—the added manual interaction is just begging you to make emotionally-based poor decisions.

If you're also getting hit with transaction fees to trade ETFs, absolutely look elsewhere.  At Vanguard, all customers can trade ETFs for free.

Thank you for the Checklist link, brandoncurtis.  Do you know how they dice and tilt with small cap and value?  The bond side seems a little thin on ideas, but maybe there is more. 

[Brandon Curtis]

The FutureAdvisor website says explicitly:

A note should be made that we prefer a “small cap and value lean” to a portfolio. Research has shown that small cap stocks and value stocks tend to significantly outperform the market as a whole over the long run, both in the U.S. and abroad.

This forum post lists some details of what FutureAdvisor recommended for one person:

High level portfolio
Domestic Equity: 40%
International equity: 35%
REITs: 15%
Fixed income: 10%

Tilt within the high level portfolio
Domestic equity: 40% broken into 16% large value, 16% total stock market and 8% small blend.

international equity (total 35%) - emerging 15%, developed large 15%, developed small 5%

There's your answer!