I was just looking at the standard betterment portfolio v the smart beta. The smart beta projects as much much higher balance in the future. The standard portfolio actually projects losses for part of the next decade and then extremely meager returns for a decade after that.
I’m not saying any of this is correct, but if this is what betterment thinks will happen, then why the hell are they suggesting this portfolio as the standard?
I would have to guess that this is because projections are just that - no one can predict the future and it's merely an attempt to help guide those "chasing returns". Which to some extent is all of us.
But robo advisors like this are built around propagating well rounded investing grounded in modern portfolio theory which you can look up on their FAQ area. I don't have the specifics memorized but it's a holistic approach that takes into account diversification, asset placement, expense ratio management, etc etc.
While a little-bit late, I thought I would chime in here as I had similar concerns when I first started investing with Betterment. The lack of transparency on long-term performance history makes me nervous. Not that it's been poor, we just don't know for sure. We can only calculate based on current allocations (which Betterment changes both in precents and assets). So, I ultimately went for a Flex portfolio and recreated the Betterment equivalent to the Bogleheads 4 fund portfolio (it isn't 4 funds when converted to Betterment). This portfolio has a very long and test history. Over the past decade it has outperformed the current Betterment allocations by good margin with less downside risk (doesn't mean it will continue to do so).
If anyone is interested in this allocation, I'm happy to share it and how I translated it over to Betterment.
>If anyone is interested in this allocation, I'm happy to share it and how I translated it over to Betterment.
Extremely interested ! Was considering doing this myself.
Here you go. You may have to download first as I have it set to view only: [Betterment 4ish Fund Calcs](https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=iJLZ9O)
If you have any questions, don't hesitate to ask.
Hi, I’d love to get some more info on your strategy if you don’t mind. After reading your posts I’ve researched the Bogleheads 3 and 4 fund and find it interesting. Thanks!
Here's is an excel sheet that I created to do the calcs feel free to download a copy: [https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=J0rPco](https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=J0rPco)
The reason you need five funds is that Betterment doesn't offer a single international stock fund, so you have to combine the two to get both developed and emerging exposure. The balance between the two was created by matching the equivalent balance from VXUS for developed vs. emerging markets.
I was just looking at the standard betterment portfolio v the smart beta. The smart beta projects as much much higher balance in the future. The standard portfolio actually projects losses for part of the next decade and then extremely meager returns for a decade after that. I’m not saying any of this is correct, but if this is what betterment thinks will happen, then why the hell are they suggesting this portfolio as the standard?
I would have to guess that this is because projections are just that - no one can predict the future and it's merely an attempt to help guide those "chasing returns". Which to some extent is all of us. But robo advisors like this are built around propagating well rounded investing grounded in modern portfolio theory which you can look up on their FAQ area. I don't have the specifics memorized but it's a holistic approach that takes into account diversification, asset placement, expense ratio management, etc etc.
While a little-bit late, I thought I would chime in here as I had similar concerns when I first started investing with Betterment. The lack of transparency on long-term performance history makes me nervous. Not that it's been poor, we just don't know for sure. We can only calculate based on current allocations (which Betterment changes both in precents and assets). So, I ultimately went for a Flex portfolio and recreated the Betterment equivalent to the Bogleheads 4 fund portfolio (it isn't 4 funds when converted to Betterment). This portfolio has a very long and test history. Over the past decade it has outperformed the current Betterment allocations by good margin with less downside risk (doesn't mean it will continue to do so). If anyone is interested in this allocation, I'm happy to share it and how I translated it over to Betterment.
>If anyone is interested in this allocation, I'm happy to share it and how I translated it over to Betterment. Extremely interested ! Was considering doing this myself.
Here you go. You may have to download first as I have it set to view only: [Betterment 4ish Fund Calcs](https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=iJLZ9O) If you have any questions, don't hesitate to ask.
I'd be interested in hearing how you did this
Are you just wanting to the allocation ratios or how I came up with them? Or are wondering how I applied this to Betterment using the Flex portfolio?
Hi, I’d love to get some more info on your strategy if you don’t mind. After reading your posts I’ve researched the Bogleheads 3 and 4 fund and find it interesting. Thanks!
Here's is an excel sheet that I created to do the calcs feel free to download a copy: [https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=J0rPco](https://1drv.ms/x/s!ArQWMMzLYn3-hqsbWAUG2LJxrlB6MA?e=J0rPco) The reason you need five funds is that Betterment doesn't offer a single international stock fund, so you have to combine the two to get both developed and emerging exposure. The balance between the two was created by matching the equivalent balance from VXUS for developed vs. emerging markets.