Two Days in August

The anticipated wide swings in the last two days presented me with the opportunity to compare the two robo advisor’s performance. Later this year, I am going to decide between Betterment and Schwab’s Intelligent Portfolios for some of my IRA funds. So I was quite interested in how they performed over the last two days, and since the first of August.

Unfortunately, I decided to wait until the end of the day to do the analysis. The large gains earlier in the day disappeared. Hopefully sometime tomorrow will give me an opportunity to look at an increasing market. None the less, the S&P 500 index dropped 1.35% today and is down 10.01% this month.

Betterment actually was up 0.23% today and is down 5.78% for the month. There are 11 funds in Betterment and 3 finished up today, enough to make the total positive. These were emerging market funds and the FTSE developed market ETF.

Schwab dropped 0.33% today and is down 7.34% in August. There are 17 funds in this account, 9 had gains today but were more than offset by losses on large cap U.S. funds, REITs, and gold.

It’s interesting that Betterment has outperformed Schwab recently because early on Schwab was the better performer.

I think I’m going to follow these daily for a while (I continue to monitor these weekly). If I update the blog again, I’ll post on Twitter at @billlanke.

Tough Week

We’ve just finished a tough week on the market, so I thought I’d take a look at the test accounts to see if there was protection in any of them. The S&P 500 Index dropped 5.8%, more than double any week since I started this in January. The Folio Investing account dropped 7.0%. This is not unexpected because this account picks individual stocks in RTGs with very high recent performance. High reward equals high risk.

Betterment and Schwab Intelligent Portfolios are designed to spread the risk at the cost of lower rewards. This has proven true in up and down weeks, less extreme swings. And the same was true this week, both dropped, 3.3% for Betterment and 3.7% for Schwab Intelligent Portfolios. These are obviously good choices to dampen the pendulum swings.

Of course, Lending Club has practically no swings. It just moves up every week. Last week’s gain was 0.15%. It moves up at a slow and steady pace. The account is up about 10% this year, even without being fully invested (only about 80%).

If I update the blog again, I’ll post on Twitter at @billlanke.

Accounts in early August

It’s been 6 weeks since I last posted an update on the test accounts. During that period of time the market has been relatively flat. The S&P 500 index has been up and down almost on a weekly basis and is only up 0.1%. Three of the 4 accounts I’ve been tracking are up more than the S&P 500.

Betterment has gained 0.36% during the 6 weeks. The Folio Investing account grew 0.33%.  Overall though the Folio Investing account has outperformed the Betterment account The Folio Investing account has 1.6% more cash than has been deposited while Betterment is up 1.1%.

Lending Club is up 0.30% in the last 5 weeks and has 1.4% more than deposited. Lending Club’s weekly percentage returns have been down, but that’s only because the amount invested was increased significantly. We had maxed out at 400 notes before we added cash to the account. We now have 1165 notes active, but still have over 200 currently being reviewed. We’re spacing out the acquisition of notes and won’t max out to a bit over 2000 for another month or two. This is keeping the weekly increases down.

The real news is in the Schwab Intelligent Portfolio account. It has dropped 1.9% in the last 6 weeks and currently has 1.1% less cash in the account than was invested. Very disappointing. Looking at the holdings, there are several major losers. The biggest is emerging market stocks and bonds. Precious metals has also fallen a fair amount. These funds have over 20% of the total allocations Betterment only allocates about 10% to these funds. So what does this mean long term? I don’t know.

I’ll keep following these accounts and will document the results occasionally. Follow me on Twitter @billlanke to know when this occurs.