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.   […]

Welcoming Mike Schroepfer to Wealthfront’s Board of Directors

At Wealthfront, we have a once-in-a-generation opportunity to build a new type of financial service, an automated service, for a new generation of investors. But to pursue an exceptional opportunity this large requires a truly exceptional team. Thus far we’ve been fortunate to attract investment luminaries like Burt Malkiel and Charley Ellis and a management team that includes six professionals who helped build billion dollar companies that forever changed their industries. Today, we’re thrilled to announce that Mike Schroepfer, Chief Technology Officer at Facebook, has joined our Board of Directors. A History of Technical Vision and Scale Schrep (as he is known to his friends and colleagues) first began to tackle scale engineering challenges when he was appointed CTO of Sun Microsystems’ Data Center Automation Division […]

Five irrational fears that keep people from firing their advisor

Everything about investing is irrational. As we have often written on this blog, what feels like the right thing to do usually isn’t. The most classic example is a falling market. We all know we should invest when markets decline and sell when they rise, but that’s counter to what our emotions tell us. Lots of investors have an emotional connection with their advisor as well, and one of the most harmful irrational behaviors we see is an unwillingness to change advisor relationships. As best as I can tell, there are five common irrational reasons why clients are reluctant to leave their current advisor: They fear they will lose the opportunity to borrow at a preferred mortgage rate They fear […]

A Deep Dive into Direct Indexing

The most unique aspect of Wealthfront’s automated investment service is our Direct Indexing service. Direct Indexing is a classic example of Wealthfront’s strategy of using software to make investment services broadly available that were previously only available to the ultra wealthy. Depending on account size, Direct Indexing can add 0.20% – 0.50% to your annual after tax return above and beyond what’s achievable with our core service, which includes daily ETF-level tax-loss harvesting. With this post we hope to explain why Direct Indexing is so unique and how it’s possible to offer such compelling value. What is Direct Indexing? Direct Indexing is, in our opinion, the next-generation of investing. Direct Indexing allows Wealthfront investors to hold the individual securities that […]