Betterment Analysis

I used the same techniques on my Betterment analysis. There were a couple of complicating factors. In the more aggressive scenario Betterment did not include an IRA option and they did include a municipal bond ETF in my allocation.  I dropped the tax free ETF and increased the other ETFs proportionally to cover for this missing ETF. Also Betterment changed some of the underlying ETFs a year or so ago. A couple of them were not in existence in 2008. These were also dropped in the initial 2008 allocations and only included beginning in mid 2013.

Following are the Betterment results with the preceding adjustments.

Reallocation Frequency	Betterment 55/45		Betterment 90/10
	From 2008	From 2011	From 2008	From 2011
No reallocations	$98,093	$99,845	$90,930	$90,930
Six months	$112,109	$127,007	$102,554	$133,427
Quarterly	$116,737	$131,277	$107,232	$138,141
Monthly	$113,352	$129,850	$99,288	$134,426
	Betterment 55/45		Betterment 90/10
Year	From 2008	From 2011	From 2008	From 2011
2008	-35.0%		-48.4%
2009	22.3%		32.0%
2010	11.8%		14.0%
2011	-2.1%	-2.1%	-7.1%	-7.1%
2012	13.3%	13.3%	17.5%	17.5%
2013	13.1%	13.1%	21.3%	21.3%
2014	6.4%	6.4%	7.6%	7.6%
Average Annual Return	4.3%		5.3%
Standard Deviation	18.85%		26.59%

Once again, reallocating quarterly led to the best results. It’s problematic to start in 2008, because there was a loss of a third to a half of the initial investment in the next fifteen months. Since then a pretty steady rebound has occurred. The average annual rate of return has been 4.3% and 5.3% (including the disaster in 2008). The standard deviations do show that the more conservative allocations tend to perform at a steadier rate, but produce lower returns.