Wealthfront’s Guide to Investing

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Your guide to investing with Wealthfront

Interested in investing with us? This guide breaks down our simple strategy for our Automated Investing Account, how we make investing effortless, and our real performance.

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Wealthfront account overview

Our strategy

Focus on the things you
can control

Our software invests your money in an automated portfolio of low-cost index funds spread across global asset classes. Since no one can predict how the market will perform, we focus on factors we can influence: tax, cost, and risk.

  • Lower taxes.

    Every day, our software works to lower your tax bill through various strategies, including Tax-Loss Harvesting.

  • Reduce costs.

    We only charge one small 0.25% annual fee and choose low-cost index funds, so you keep more of your return.

  • Manage risk.

    We invest your money across the right mix of asset classes for your risk tolerance. To maintain this diversification, we automatically rebalance your portfolio.

Timing the market just doesn’t work

Wall Street "gurus" and TV personalities like Jim Cramer may tempt you into believing that outperforming the market is possible. But historical data and academic research has proven otherwise.

Over a one-year period, about 85% of funds that tried to time the market failed to perform as well as the S&P 500 (an index that tracks the performance of the 500 largest public companies in the US). This underperformance is consistent even over longer time periods.

Let’s make your savings work harder

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How it works

You pick the right
account for your goals

All our Automated Investing Accounts follow the same time-tested principles to manage your risk, lower your costs, and minimize your taxes. Whether you're saving for college, retirement, or just want to grow your money for the future, we'll help you choose the right account to use.

We build a diversified portfolio
tailored to you

Global diversification — investing in different asset classes around the world — makes investing less risky and uncertain, namely because no one can accurately predict how markets will perform.

Once your diversified portfolio is hard at work, we track and periodically rebalance it to make sure you’re striking the right balance between risk and reward.

What’s inside your Automated Investing Accounts? ETFs.

Exchange-traded funds (ETFs) are collections of investments that track the performance of indexes. They hold collections of stocks, bonds, real estate, and commodities.

When choosing these funds, we look for:

  • Liquidity, so it's easy to sell your investments when you want to cash out
  • Low expense ratios, so more money goes to you and not to the managers of the ETF
  • Minimal tracking error, so you know the ETF is properly reflecting the index’s performance

We tailor your portfolio to you

When you sign up, we ask you a few questions to determine the right mixture of ETFs that will work to deliver the highest return for your comfort zone.

Your comfort zone is expressed as a risk score. This score is based on three factors: your age, your financial situation, and your attitude toward risk.

We manage every
aspect of investing

We automatically rebalance your investments, selling ones that rise above your target allocation and buying more of the ones that fall below it. The cherry on top: we aim to do this when the benefits are bigger than the likely tax costs.

8 ways we lower your taxes

A high tax bill can destroy your return. We work relentlessly to make sure this doesn’t happen to you.

Get started with a few clicks, then never lift a finger

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Performance and fees

We’ve grown portfolios by 8.13%

This is how well portfolios with our most common risk score, 8, have done since our launch in 2011.1 This rate is after fees, pre-tax, and annualized.

Let’s say you opened an investment account with us in 2011, deposited your savings, then never added another cent. Today, with an annual return of 8.13%, your savings would have nearly doubled. That beats any earnings you could have made with a savings account during the same period.

Of course, your return will depend on your risk score and what the market is up to. See how these factors have historically affected performance below.

Explore how our portfolios are currently growing

These rates are after-fees, pre-tax, and annualized.

Our fee is simple

When you invest elsewhere, you can typically expect a bunch of fees: commissions, transfer fees, maintenance fees, inventory markups, PFOFs… the list goes on.

But with us, there are only two costs:

  • Advisory fee (0.25%)

    This is our annual fee for managing your account. Most managers charge you 4x more, around 1%.2

  • Expense ratio (0.06-0.13%)

    This is the fee you pay to the funds in your portfolio. All funds have this fee, so we make sure to only pick low-cost funds.

Your bite-size bill:

Earn higher returns. Do less work.

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Our support team has your back.

We strive to make everything easy, so you never have to call us. But if you ever need help, our experienced support team is here for you.

Reach us