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What Client Data Teaches Us About Chasing the Market

When it comes to investing for the long term, Wealthfront is an advocate of staying the course and making regular deposits, even when your account is down. In a previous post, we compared the returns of two hypothetical investors, one who invested consistently and one who only invested when her total investment returns since inception were positive. Using simulated returns for Wealthfront portfolios, we found that the investor who disregarded market performance and consistently invested outperformed in the long run. What Does Actual Client Behavior Show? Wealthfront has the advantage of having access to actual client behavior and subsequent account performance. In the below analysis, we group clients based on their deposit-timing behavior and compare investment performance of each group. […]