How do I know my financial advisor is doing the right thing?

How do I know my financial advisor is doing the right thing? The recent significant drop in world financial markets has created a lot of anxiety – especially among people new to investing. In times like these, investors who outsource the management of their investments can’t help but wonder if they chose the right person or firm to manage their money. The challenge is it’s really hard to tell who is doing a good job when markets decline. The financial press is saturated with two false promises: the promise that there are people who can reliably beat the market, and the promise that there are people who can reliably protect you from a downturn. Despite overwhelming research to the contrary, […]

Important Lessons for New Investors

Wealthfront has grown rapidly by bringing the benefits of sophisticated investment management to a huge new generation of investors. For many of our clients, investing with Wealthfront is their first direct exposure to the stock and bond markets, and unlike savings accounts, stock and bond markets can rise and fall. For new investors, reviewing your account to find less money than you put in can be a rude shock. Where did the money go? Rationally, we all know that markets go up and down, but it feels different when you see the impact in your own account. It can even lead new investors to wonder why they made their investments in the first place – or whether services like Wealthfront […]

America’s $13.2 Trillion Problem

Every year, millions of investors open their brokerage statements and feel a wave of anxiety as they attempt to figure out how much they are really paying in fees. The challenge is it’s almost impossible to tell. One thing we can be sure of is investors are paying way too much in fees. State Street and Boston Consulting Group data estimates that US investors paid over $277 Billion in fees to manage their investments in 2014, and that doesn’t include advisory or maintenance fees. If this continues, investors could lose an estimated $13.2 trillion to fees alone over the next 30 years. That’s $13.2 trillion that could be used to buy new homes, pay for college educations or fund retirements. […]

The Biology of Good Investing

Investment pundits – ourselves included – write a lot about how checking your portfolio too frequently is hazardous to both your financial and mental health. The evidence is overwhelming that those who check their portfolios on a daily basis tend to underperform those who check their portfolios less frequently. The reason is simple: On any given day, there’s almost a 50-50 chance the market will be up or down. Because people dislike losses more than than they enjoy gains – a behavioral finding known as loss aversion – people who check their portfolios daily find the process painful. And just like your gut reaction to pain is to draw away from the source of that pain, your gut reaction to seeing […]

Happy Holidays from Wealthfront!

At Wealthfront our clients are our one true north, so it’s appropriate at this time of year to take a moment to just say, thank you. 2015 has been a momentous year for us, and our success stems directly from the trust and support you have placed in us. Wealthfront was created with the belief that everyone deserves sophisticated financial advice. To achieve our mission we need to deliver innovative products and change the way the rest of the industry treats its clients. We spent much of 2015 focused on both of those dimensions. Delivering Unparalleled Investment Value We pride ourselves on leading our industry with constant innovation, because every addition to our service is designed to deliver more value […]

These Are the Droids You Are Looking For

Star Wars is everywhere, but while C3PO and R2D2 might have been the first droids we fell in love with, we thought we would close out the year with a bit of holiday cheer for the other droids in our life. We are excited to announce that we’ve released Wealthfront for Android on Google Play, just in time for that shiny new droid in your stocking. Download Wealthfront for Android Wealthfront for Android has been a labor of love, designed and built from the ground up for the Android platform as a way to intuitively check and manage your investments in the most streamlined way possible. Everything in One Place Wealthfront for Android gives you a clear view of all […]

Your 401(k) May Not Be the Best Way to Save for Retirement

The Wealthfront blog has always made a commitment to focusing on data-driven, actionable advice. Sometimes the data challenges conventional financial advice. In this post, we look at the gospel that 401(k) accounts are the best way to save for retirement. As we will explain below, a significant number of investors could even be better off saving money in a taxable, automated investment account with direct indexing and tax-loss harvesting than they would in a 401(k). For many of you, particularly those who have long advocated for the benefits of 401(k) accounts, this might be hard to accept. However, the data clearly shows that the potential drag from high fees in 401(k) accounts and the powerful tax-deferral benefits of newly available […]

Are You Invested the Right Way for 2016?

As we draw to the close of another year, it’s common for investors to ask themselves, “am I invested the right way for the long term?” Unfortunately, too often we lack access to the data that could help answer that question. Fortunately, Wealthfront is in a unique position. We have seen what thousands of people’s portfolios looked like before they were transferred to us and reinvested in tax-efficient, low-cost, globally-diversified portfolios. Being a data-driven company, we’ve created metrics to analyze the fees, composition and diversification of the transferred portfolios. What we see is troubling. Fewer than one in ten of the transferred portfolios were properly built. 92% of the portfolios reviewed were challenged by some combination of high fees, cash drag […]

The Personal Economics That Drive Services Like eBay & Airbnb

As a Product Manager at eBay in 2004, I had the opportunity to fly to New Orleans for my first eBay Live in June of that year. Over 10,000 eBay fans, mostly part-time sellers, gathered together to discuss, debate and learn about new features that the eBay platform offered them. I’ll never forget that experience, for while my official role was to teach eBay sellers about new features available on the platform, the truth is I learned more from them about their lives and reasons for selling on eBay. The biggest lesson I learned from speaking to hundreds of people who sold either part-time or full-time on eBay was a simple one. The relatively small amounts of additional income and […]

How to Secure Your Wealthfront Accounts with Two-Step Authentication

At Wealthfront, the security of the assets and data you have entrusted with us is of paramount importance. Wealthfront continually monitors your accounts for unauthorized access and works constantly to expand and improve the security features we offer. Today, we’re pleased to announce the availability of a security feature that provides an extra layer of protection for your Wealthfront account, two-step authentication. Enabling two-step authentication is easy: just go to your Account Settings from the top menu, click the link for Two-Step Authentication, then click the Enable button. Follow the prompts either to have your verification code delivered by text message or to set up your preferred authenticator app. For detailed setup instructions, please see our Frequently Asked Questions.   […]