| Robo-advisers vs managed accounts? |
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phyllis
New Member
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Location: Washington, DC
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| Robo-advisers vs managed accounts? |
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Hi, I've been trying really hard to figure out the best place to put my IRA accounts. I am a buy-and-hold kind of investor because I don't know enough to pick stocks, etc. myself. Currently my IRAs are held by a brokerage and are invested in mutual funds. I know the expense ratios on those are much higher than ETF index funds. I was thinking of switching to a robo-adviser (like Betterment or Wealthfront) and just investing everything in a portfolio of indexed ETF funds. Is this a good idea? I feel like paying fees on a managed account won't necessarily make more money in the long run than just indexing to the market. I like that these robo-adviser sites are very diversified and super low cost. I don't know anyone actually using them though. Anybody have thoughts on this? I think my mutual funds charge around 1.00% in fees. Some of these robo-adviser sites charge only 0.15% plus the cost for the ETFs (.09% to .15% depending on the fund). Wondering if I wouldn't come out ahead.
Thanks, Phyllis
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Mon Jun 27, 2016 6:49 pm |
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oldguy
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You would probably come out ahead - but trading in/out by a robo-provider is unlikely to be better than buying the index directly.
Go to a no-load fund company (Fidelity, Vanguard, TR Price, etc) and buy the SP500 Index. That gives you a broad diversification across all segments of the market, and it is unmanaged, usually about 0.1% fee.
The return over nearly any 30-yerar block that you look at is 11%/year.
http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html#.V3Gd4DWyDSZ
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Mon Jun 27, 2016 9:44 pm |
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phyllis
New Member
Cash: $ 0.65
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Joined: 27 Jun 2016
Location: Washington, DC
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Thanks!!! I will take a look at this. I had been mainly thinking robo-advisers because I had no idea which funds to buy. I've got at least 20 more years until I retire (probably longer) and want to increase my retirement as much as I can. Thanks!
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Tue Jun 28, 2016 3:06 am |
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littleroc02us
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I also have about 20 years of investing and a good portion of our retirement is with the VTSAX Index fund through Vanguard, which tracks over 3,000 companies. It has been very prosperous for us and pretty much a no brainer. The expense ratio is so .005% and it's returned around 10% over the last 10 years. There is no trading and all we do is deposit money and forget.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Tue Jun 28, 2016 1:42 pm |
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phyllis
New Member
Cash: $ 0.65
Posts: 3
Joined: 27 Jun 2016
Location: Washington, DC
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Thanks! This is really helpful.
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Tue Jun 28, 2016 6:50 pm |
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