- Overview and Algorithm Introduction
- Nobel-Prize Winning, Long-Term Strategy
- Index Investing
- Dynamic Fund Selection
- Investing Globally
- Tax-Loss Harvesting
- Smart Rebalancing
- The “Efficient Frontier”
Most people don’t have the time or training to analyze and pick every stock they invest in. FutureAdvisor clients are busy professionals who know that stock-picking successfully is a full-time job. (Even full-time, professional stock pickers don’t beat the market.) John Bogle discovered that low-fee index funds, which mirror the whole market, actually perform better in the long run than funds full of carefully selected stocks.1 Most professional stock pickers get it wrong, and charge you more money to perform worse. FutureAdvisor protects your wealth by investing in low-fee index funds, which we rebalance according to your age, tax bracket, risk appetite and expected retirement date.
The best indicator of a fund’s performance is how much it costs. The more you pay, the less you get, broadly speaking. The price of putting your money into a fund is called its expense ratio. Many mutual funds have expense ratios of more than 1%. That’s a fraction of your returns that goes straight to the fund managers, and never comes back to your nest egg. The lowest-fee index funds have expense ratios of 0.04%. That’s two orders of magnitude less. Morningstar research has shown that higher-fee funds consistently underperform. FutureAdvisor’s sophisticated algorithm weighs expense ratios, trading commissions, and bid/ask spreads to determine the lowest-possible cost ETFs for each portfolio, account and transaction. Which means you keep more of your own money.