It’d also be good if people would write to Wealthfront/Betterment/etc. asking for the ability to donate stock! I e-mailed both companies about it a year or so ago, and both responded that they may add it in the future but had no definite plans. There can be benefits to donating that way, which are explained in this essay by Brian Tomasik. And instructions on how to donate stock to GiveWell are here.
Also, I’ve been using both Wealthfront and Betterment for a year with similar risk profiles, and Betterment has done slightly better. I know a year’s comparison means next-to-nothing for deciding which will be better, but I’m curious to see if others agree with you that we should prefer Wealthfront.
I actually hadn’t considered that, but that’s really important. If you have most of your money in a robo-advisor and want to donate some of it, I believe the best solution would be to transfer your holdings to a different brokerage account that lets you donate stock, and then donate from there.
It doesn’t look like Wealthfront or Betterment offer donor-advised funds either, which would be a nice feature.
About why I think Wealthfront will perform (slightly) better than Betterment: I may write about this in more depth in the future, but the main reason is that Betterment puts a lot of its holdings into Vanguard value ETFs and less in emerging markets. I do believe that value stocks outperform the market in the long run, but the methodology for Vanguard’s value ETF (which is based on the CRSP US Value Index) is really weird and I couldn’t find any evidence that it captures the value premium.
It’d also be good if people would write to Wealthfront/Betterment/etc. asking for the ability to donate stock! I e-mailed both companies about it a year or so ago, and both responded that they may add it in the future but had no definite plans. There can be benefits to donating that way, which are explained in this essay by Brian Tomasik. And instructions on how to donate stock to GiveWell are here.
Also, I’ve been using both Wealthfront and Betterment for a year with similar risk profiles, and Betterment has done slightly better. I know a year’s comparison means next-to-nothing for deciding which will be better, but I’m curious to see if others agree with you that we should prefer Wealthfront.
I actually hadn’t considered that, but that’s really important. If you have most of your money in a robo-advisor and want to donate some of it, I believe the best solution would be to transfer your holdings to a different brokerage account that lets you donate stock, and then donate from there.
It doesn’t look like Wealthfront or Betterment offer donor-advised funds either, which would be a nice feature.
About why I think Wealthfront will perform (slightly) better than Betterment: I may write about this in more depth in the future, but the main reason is that Betterment puts a lot of its holdings into Vanguard value ETFs and less in emerging markets. I do believe that value stocks outperform the market in the long run, but the methodology for Vanguard’s value ETF (which is based on the CRSP US Value Index) is really weird and I couldn’t find any evidence that it captures the value premium.