Our Advice After Election Night

Last night’s election results came a shock to many people. If the past is any predictor of the future, I would expect a lot of our clients to feel incredibly unsettled as a result. The situation reminds me a lot of what happened immediately after the Brexit vote. Most people have forgotten that the FTSE 100 (an index of the 100 largest market cap stocks on the London Stock Exchange) declined 3.15% the first day after the vote, but finished the week up 1.99%.  Markets around the world dropped, recovered, dropped again and then rose to a level well in excess of where they were before the election. So what’s our advice for worried investors? Same as always: Do nothing. […]

Let Wealthfront Help You Save for College

We are pleased to announce that after weeks of internal testing we are ready to make the Wealthfront 529 College Savings Plan available to everyone. We are so excited about this new plan because we think 529s are the best type of account Congress has provided to parents who are saving to help pay for the college expenses of their loved ones. Why? Because they allow your investments to grow tax-free, so long as they are used for qualified higher education expenses, which include tuition, fees, books, computers and a variety of other expenses. Unfortunately, three out of every four Americans have never heard of a 529 and the plans are therefore being underutilized. A recent Sallie Mae study shows […]

Passing the Baton, Again

I never thought I would be a founder.  After 25 years in venture capital, my intention was to focus my time on sharing what I had learned with the next generation of entrepreneurs and business leaders at the Stanford Graduate School of Business. Fate, as it would seem, had a different idea. After countless frustrating experiences trying to explain to my students why they couldn’t access quality financial advice, I realized that I should do something about it. But it wasn’t until I met Dan Carroll that I knew that I would do something about it. Dan and I launched Wealthfront at the end of 2011, and a new way to invest began to form. Not long after we launched, […]

Not all software is created equal

I am constantly amazed at how often people ask me, “Why can’t any bank or broker with a large budget hire a bunch of engineers and easily replicate Wealthfront?” The answer is simple: not all software is created equal. If it were, you probably wouldn’t be doing all your searches on Google and buying most things from Amazon. We believe our software is simply better than our competitors’. Real World Example: Tax-Loss Harvesting A great example of our superior software is tax-loss harvesting, an important feature Wealthfront pioneered in October 2012. The goal of our daily tax-loss harvesting service is to minimize investment taxes for our clients. The service does this by selling securities that are trading at a loss […]

The 2017 Wealthfront Career-Launching Companies List

Today we are pleased to present our fifth annual list of US mid-sized information technology companies with momentum. We publish this list because it is our responsibility as a financial advisor to provide the advice that maximizes your net worth. As proud as we are of our investment service, we think we can add even more value by helping you start your career on the right foot. That’s because choosing the right job can add far more to your ultimate net worth than making good planning or investment decisions. We believe the companies we list each year are the ideal places for young people to start their careers because they are all highly likely to turn into large businesses, and […]

Financial Advice for Young Lawyers in Debt

What to Do First? Invest or Pay off Debt? Among the many decisions facing young professionals as they embark on their careers is how to begin a lifetime of financial planning. And young attorneys have an especially tough call. Most of them leave law school with significant student debt, but without the sort of starting salary necessary to quickly pay off their loans. At the same time, they are usually smart enough to appreciate that they need to start saving for major life events, including a home, college for their children, and their own retirement. So what to do? Pay off their loans, or start in on a nest egg? The answer for young lawyers, just like it is for […]

How to Forecast Future Inflation Rates

Estimating inflation accurately is enormously important to the development of a viable financial plan.  Misforecast inflation by 1% and the plan might not be able to cover living expenses upon retirement.  The challenge is finding a credible way to forecast inflation. As is the case with most financial statistics, the best estimate is usually found in the public markets. Those who put their money where their mouth is tend to be right more  often than pundit prognosticators (Brexit not withstanding, where those betting in the UK got it wrong). Bond Market Provides Clues on Inflation Bond market participants routinely price bond securities based upon their inflation projections.  The difference between the nominal 10 year Treasury rate and the inflation adjusted Treasury […]

The Miracle of Compound Interest

Your Most Powerful Investment Ally is Time If you’ve ever heard compound interest described as “the most powerful force in the universe,” it’s probably on account of a quote to that effect attributed to Albert Einstein. As it happens, the quote itself is probably an urban legend. But if Einstein didn’t make such a reference, (or, as an alternative version has it, call compound interest “the most important invention of all time,”) it was probably because he was too busy with E=MC2 to give the matter much thought. E=MC2 is the formula that describes converting mass into energy. Compound interest, by contrast, is the formula that describes converting time into money. Lots and lots of money. Compounding Turns Time Into […]

Welcoming Three New Hires to Our Executive Team

At Wealthfront, we believe that everyone deserves sophisticated financial advice. Delivering on a mission this large isn’t easy; it requires patience, funding and most importantly an extremely capable team. Today, I am incredibly excited to announce three new additions to our team of talented executives who will help make our mission a reality. Joe Ternasky, Vice President of Engineering. Yesterday we welcomed Joe as Wealthfront’s VP of Engineering. Joe has had an impressive career spanning Adobe, Apple, Microsoft and most recently, nearly a decade at Google, where among other responsibilities, he ran development for all of Google apps for enterprise. His experience developing compelling user experiences at scale and across multiple platforms will ensure we deliver on the vision laid […]

The Right Way and the Wrong Way to Benchmark a Diversified Portfolio

One of the biggest challenges for an investor is to determine how well her diversified portfolio is performing. The two most common benchmarks featured in published advice are: S&P 500 A 60/40 Stock/Bond portfolio Unfortunately, most published advice is incorrect. That’s because it usually encourages comparison to an irrelevant index or too generic of a model portfolio. In our opinion, the right way to benchmark a diversified portfolio is to take into account risk and taxes. Let’s Start with Indexes Most individual investors think they should benchmark their diversified portfolios against a stock index like the S&P 500®. That’s probably because such indexes are the only indexes with which they are familiar or the only indexes their financial advisors used in […]