Archive by Author

Trust and Mission: A Talk With Charley Ellis

Charley Ellis, the newest member of Wealthfront’s investment advisory board, has been a clarion voice over a long, distinguished career for high-quality, low-cost investing and for the rights of individual investors. His expertise has placed him at the highest level of the investing world. A consultant to the biggest investment management firms, he is a former board member of the Vanguard group and chairman of the investment committee at Yale University, where he oversaw the most successful university endowment in history. As the founder of Greenwich Associates, his research-based consulting firm, Charley is also an entrepreneur, whose experience led him to write his 16th book, What It Takes, about the seven keys to success shared by the top professional firms […]

Q&A with William Sharpe: Investing In a Turbulent Market

Nobel Prize-winning economist William Sharpe recently published an article showing retirees how much more money they could have in retirement by avoiding actively managed funds in favor of index-oriented funds. In the article, “The Arithmetic of Investment Expenses” in the Financial Analysts Journal, Sharpe showed that a person saving for retirement who chooses low-cost investments instead of higher-cost investments could have a standard of living throughout retirement that is more than 20% higher. Professor Sharpe[1] recently spoke to Bill Snyder of the Stanford GSB about retirement strategies and lessons learned (or not learned) from the financial meltdown of 2007. This Q&A was adapted from that interview and used with Professor Sharpe’s permission. What did we learn from the crash and […]

Burt Malkiel’s Rule for Young Investors: Save Regularly

Wealthfront CIO and Princeton emeritus economics professor Burt Malkiel sat down with us a few weeks ago to talk about two of his favorite topics: perseverance and patience. In other words, invest regularly, and stay invested. Burt cites a famous essay by Warren Buffett. Buffett uses it in part to explain his practice of placing big bets in good companies when the market is headed down, and then waiting for the stock prices to turn around. That’s beyond the scope of non-professionals. But there is a way young investors can benefit from the same idea. If you persevere by investing regularly, even in markets that don’t look promising, you are more likely to reap a large reward over time than […]

9 Signals You Should Hire A Tax Accountant

Many of our clients use TurboTax until they hit certain triggers in the complexity of their financial lives. If you spent more than a few hours on your taxes this year, it’s time to ask yourself whether it makes sense to outsource this portion of your financial life to an accountant. One of my rules in life – a rule that helps keep me balanced – is to outsource what I don’t enjoy or what someone else can do better than I. If you don’t enjoy something and you can hire someone to do it better than you can and it doesn’t cost too much, then doing so is a no-brainer. For many of our clients who are rising fast […]

Five Ways ETFs Surpass Index Funds

We often get the question from clients: What is the difference between an index fund and an ETF? Even people who understand ETFs don’t understand the difference between these two kinds of investment products. We believe ETFs are index funds, evolved. To understand why ETFs represent such an advance over index funds, you have to look a little deeper than the most basic explanation of the difference between them. Financial advisors will tell you that an ETF is different from an index fund because it trades like a stock, throughout the day. Index funds, which are a kind of mutual fund, can only be purchased or sold at the end of the day after market close. Most ETFs, like most […]

Financial Resolutions For Silicon Valley

At this time of year, you commonly see articles that offer long checklists of typical financial advice. If you’re looking for that, look elsewhere. We didn’t want to write one of those typical posts. It’s not that the advice is bad, it’s that those changes don’t matter much. You should maximize your IRA contribution, roll over your old 401(k), set goals and a budget for 2013, and donate to your favorite charitable organizations. These suggestions are worthwhile. Put them on your to-do list. Whether you do them now or in a few months […]

Adam Nash Joins Wealthfront As COO

Adam Nash, Wealthfront COO

Wealthfront is pleased to announce Adam Nash as our Chief Operating Officer. Adam played a critical role in driving growth and product innovation at LinkedIn and eBay, two of the most successful consumer Internet companies in Silicon Valley. Most recently, he has been Executive in Residence at Greylock Partners. At Wealthfront, he will direct the product, engineering and marketing teams, focusing immediately on adding about 30% to the company’s staff. He will oversee the majority of Wealthfront’s employees. “Adam brings an incredible set of skills to help make our client experience the most delightful in finance. His experience in mobile platforms and social networks and his deep understanding of design will help us better serve our clients,” said Andy Rachleff, […]

Burton Malkiel Joins Wealthfront As CIO

We’re honored to announce that famed economist Burton Malkiel, who helped launch the low-cost investing revolution with A Random Walk Down Wall Street, has joined Wealthfront as our Chief Investment Officer. Dr. Malkiel is one of the most important public voices in investment management and a leading light in the index investing movement. He’s an emeritus Princeton University economics professor, a former board member of Vanguard Group, and a former member of the President’s Council of Economic Advisors. As Chief Investment Officer, Burt will help Wealthfront continue to improve our investment services, including the choice of asset classes, the way we allocate among different classes, the choice of securities and the methods by which we evaluate risk and apply those […]

Advice On Angel Investing … and Other Advice, Too

Everywhere I go in Silicon Valley I hear people discussing their angel investments. The conversations remind me of fish stories. People love recounting the one time they caught a big fish, not the many futile hours they spent waiting for a bite. That’s how Andy Rachleff, Wealthfront’s president & CEO, began a recent post on TechCrunch about whether or not becoming an angel investor is a good idea. Andy, a co-founder of Benchmark Capital and a faculty member at Stanford University Graduate School of Business, used his knowledge of the venture capital business and seed investing to make the case that it’s terrifically difficult for an angel investor to make money because seed investments are so risky. His advice: My […]

Managing A Silicon Valley Windfall

Sudden money – such as comes with an IPO or an acquisition – is a good thing, right? Yes, but it’s often accompanied by stress. People who have been working within a constrained budget, steadily paying off college loans and sizable Silicon Valley mortgages, suddenly find themselves with a seemingly limitless number of options for spending their money. In this recent Quora post, Wealthfront Director of Research Jeff Rosenberger answered the question: “What advice would you give to someone who has the opportunity to cash in some of his private company stock in the low seven digits?” Jeff offered a three-step plan. Divest your stock “Unless you have an informational advantage that tells you your company stock is meaningfully under-valued […]