
What to do? Roboadvisor has underperformed the S&P500 by 12.5% - danielodio
http://danielodio.com/15-month-performance-asset-allocation-review-betterment-vs-wealthfront-vs-s-p500-vs-other-options
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GCA10
That's unfortunate! Looking at the chart, it seems as if Betterment's system
excels at giving you 100% participation in each market decline, offset by
about 70% participation in each advance.

Yikes! That's like playing cards at a casino poker table with a big house
rake. The pattern is so consistent that it looks as if it's a built-in feature
of their model, whether they know it or not.

It's hard for me to imagine any reason to keep more than lunch money in such
an account. I can understand the desire, out of sheer intellectual curiosity,
to see how the system works. But their product right now looks inferior to a
much simpler buy-and-hold approach, based on a relatively static asset
allocation that you determine yourself.

There's also fair amount of financial history of can't-miss algorithmic
investing that didn't work out, after all. Two examples that come to mind are
portfolio insurance (1987) and Long-Term Capital Management (1998.)

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danielodio
Yeah it's very true... nothing like being an early adopter with your
retirement nest egg! :-|

