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If you have been reading my blog, there is one thing you will notice. I am a big fan of passive investing using low cost market index tracking ETFs. Today, I am going to talk about Wealthfront, an automated investment advisory firm with nearly $3 billion in client assets under management.
Wealthfront uses algorithms based on Modern Portfolio Theory (MPT) to customize the portfolio for each client and invests across asset classes listed below.
- U.S. stocks
- Foreign Developed Stocks
- Emerging Market Stocks
- Dividend Growth Stocks
- U.S. Government Bonds
- Corporate Bonds
- Emerging Market Bonds
- Municipal Bonds
- Treasury Inflation Protected Securities (TIPS)
- Real Estate
- Natural Resources
These asset classes are represented in your portfolio by using a low cost passive ETFs. Asset allocation is made based on the input from client on risk tolerance.
Who runs their investment management team?
How to get started?
#1 You start your sign up process with Wealthfront
#2 You provide your input for risk tolerance
#3 Based on your risk tolerance input, Wealthfront creates a unique investment plan across the asset classes
#4 Complete the sign up process and fund your account.
In a few simple steps you are completely set up and ready to go.
How much does it cost? What are the fees?
Wealthfront manages the first $10,000 of your investment 100% free. There is no cost to you.
The management fees is 0.25% for all investments above $10,000.
Is there an investment minimum?
You need to invest a minimum of $500 to get started.
There is no provision to hold individual stocks or choosing individual ETFs in your portfolio. However, you can personalize and tweak your asset allocation percentage across the different asset classes.
Stretch A Dime Opinion:
If are just beginning to start investing, Wealthfront is a great place to start at.
Your money gets invested across U.S. domestic, foreign developed stocks & bonds, emerging markets, real estate, and natural resources – all of these via passively managed low cost ETFs.
Your first $10,000 in investment is managed 100% free. You get all this diversification at zero management cost.
Honestly, why would you want to miss that?