Wealthfront found that 65% of investors are paying too much for high-fee investment products, expensive advisors, and/or unnecessary transaction costs. High fees could leave a $100,000 portfolio with $25,000 less in 25 years.How much could high fees cost your portfolio?
Tax-loss harvesting takes advantage of market volatility to reduce your taxes while continuing to track market returns by selling investments that have declined in value and replacing them with highly correlated assets.Could Daily Tax-Loss Harvesting reduce your tax bill?
35% of investors hold 10% or more of their portfolio in cash. While it's always a good idea to build an appropriate emergency fund, holding cash beyond that can often be a losing proposition.Could excess cash be costing your portfolio?
Poor diversification could diminish your portfolio's risk-adjusted return. Large positions in individual stocks affected by company-specific, negative news (for example, BP or Volkswagen) can subject a portfolio to significant losses. While US stocks have performed extremely well in recent years, diversifying across international markets could offer higher risk-adjusted returns over the long term.Is your portfolio at risk?
33% of investors hold the majority of their portfolio in just one or a few individual stocks.
55% of investors have more than 95% of their portfolio in US stocks and bonds, missing out on optimal risk-adjusted returns.
Wealthfront Portfolio Review is a free, objective evaluation of your portfolio across key dimensions that impact future performance. Our methodology is based on Nobel Prize-winning academic research and investment best practices. Read our white paper to learn more.
Wealthfront conducted an analysis of external accounts provided by clients through December 30, 2015 on five dimensions: advisory fees, transaction fees, product fees, cash drag and diversification. Each of these dimensions was analyzed using the methodology described in our Porftolio Review White Paper. Wealthfront defines high-fee investment products as those with more than 0.25% in fees per year, expensive advisors are those that charge more than 0.25% per year, and unnecessary transaction costs as more than 0.10% of an account's value per year. Wealthfront defines an account as invested the "right way" if it has low fees, consistent with the preceding sentence, and effective diversification consistent with Modern Portfolio Theory, as described in both our Porftolio Review White Paper and Investment Methodology Whitepaper. Future values are projected using an annual expected net-of-fee return of 4.9%, consistent with Wealthfront's typical client's 7.0 risk score for a $100,000 taxable portfolio.
Data is shown for educational purposes only. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Past performance is no guarantee of future results. All securities involve risk and may result in loss. Wealthfront does not provide tax advice, please contact a qualified tax professional for tax advice. For full disclosure and details of our evaluation methodology please see our Porftolio Review White Paper.