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Comment by subsubzero | Hacker News Reader

Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year). I would like to hear other people's perspectives about how their wealthfront funds did as my colleagues did the same as me and left wealthfront as well.

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> This was over a year's time so not short lived by any means.

1 year of investment data is useless. An investor will be invested for their lifetime, we barely have decent data for 1 investor's invested lifetime(about 50 years). A decade comparison is arguably the bare minimum, you really want 20 years, as investments tend to be cyclical by a decade or so.

I can't speak for Wealthfront, but managed "funds" are typically balanced across high and low risk securities. Thus they will obviously lag behind even index funds like SPY/QQQ. Where managed funds tend to show benefits is in times of high volatility or downturns. Ask yourself how many downturns you've seen in the age of Wealthfront. Because I count 0. And 10-15% yearly returns aren't exactly impressive in the last 12 years. SPY stomped those numbers: https://finance.yahoo.com/quote/SPY/performance/

>> I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year)

You must be one of:

1. lucky 2. a genius 3. a crook 4. haven't invested on a long enough timeframe.

Given the stock market returns over the last five years, it's definitely #4.

Everybody invested in broad market index funds has been making those returns the last few years.

Depending on strategy you can do ok, I'm up over 20%/year going back 15ish years. There's certainly a lot of luck involved but also tolerance for volatility.

Funny, I'm up 45%/year going back 30ish years, since we're on the Internet just saying things.

It's not a flex, I'm just saying that it's not super rare for people to get those returns. If you're really doing 45% that's above and beyond though and would be curious what your strategy is.

If you're getting 20% returns you've quit your day job and are doing this exclusively, right?

And has he got a coin to sell you!

He's either not really getting 20% or is cheating on his taxes.

Source: I have a personal relationship with my auditor, and I'm pretty sure he hates me because I don't willfully cheat on my taxes.

Nothing to sell here unless you want to invest in my next company. I do pay all the taxes I owe. The curse of good luck is I don't have much reason to believe my future returns will continue to be so good.

Not GP, but there's no secret sauce here. VTSAX is up 25% each of the last three years, and it's hardly unique. The market has been doing well. Things that track the market will also do well.

"going back 15ish years"

The (US) market has done 11% annualized in the last 15 years. 20% is not just "traking the market". It's the difference between going from $1m to less than $5m or more than $15m.

Now, if "15ish years" means "12 years and 9 months, from the exact bottom" then yes, the annualized return has been over 18%.

well it helps that stocks have mostly gone up in the past 7-8 years :) but I typically avg. about 10% a year, one year was a down year but most years its about that.

I ran a very similar experiment. I don't recall the exact dates, but something like 2016 - 2018, and left Wealthfront as a result. I was under the threshold that incurs management fees, but Wealthfront was outperformed by S&P, at least over my time frame.

I never held anything with them during a market downturn, so I do wonder what that might look like. Potentially the lower returns would be justified by the existence of a hedge or holdings in lower-risk assets.

I started in 2016, other than 2018 (down 8%) I've been up ~10-25% each year. It's worked well and I've been happy with it.

> Back in 2015 I put some of my money into wealthfront, despite the market doing well at the time, my wealthfont fund which was heavily stock balanced did somewhat poorly. This was over a year's time so not short lived by any means. I pulled my money out and invested into stocks I chose and never looked back(typically get 10-15% returns a year).

exact same sequence. I was surprised how poorly it underperformed.

I believe I've gotten lucky, but I moved all my money from Fidelity (making, 7% I think?, in a money market? I couldn't understand their UI so I don't recall) to Wealthfront. It currently shows and it's made 15% - 35% over 2 years.

So has everyone else. The market did well over the last couple years.

I left after I realized the tax loss harvesting was capped at 3k a year

Interesting, I started in 2017 and am up 40.58% all time today.

If you had put money in VTSAX on 1/26/2017 and reinvested dividends, you would be up 101.91% with an annualized return of 15%

That's not the same. Money doesn't just appear all at once ready to dump on the market, we get and invest it every paycheck. So average cost basis over time gets higher as you make purchases

annualized return is annualized return, his strategy gave him < 9% annualized return and that is being generous, saying he's invested for 4 years not 5.

if you look at SPX returns over the last four years, 2018 was a negative year but each year after was between 16% and 28%. also 2017 was over 19%.

I mean that applies to anyone in this thread more than me specifically. I'm not saying Wealthfront is the best option, just that I've been fine with it as someone who knows nothing about investing and didn't want to keep throwing money into a savings account. And if we're being picky about time, I'm closer to 4 years in Wealthfront and was up 50% all time a few weeks ago. Still not the best, but better than savings.

Just going to move it all to $DOGE now anyways.

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