Which Robo-Advisor is best?

I invested $6000 in Betterment, Ellevest, Fundrise, Wealthfront, SoFi and the S&P 500. Let’s see who the winner is this month.

In the summer of 2017, I was looking into investing using one of these Silicon Valley financial company startups. I was reading reviews based on offers, fees, investment minimum, etc., but I couldn’t find anything on how well they performed.

Therefore, I conducted my own $1000 investment experiment where I invest $1000 through each of the companies listed in the charts below. I made a few $1000 investments back on 5/30/2017. And then a couple more $1000 investments in August.

The purpose of this data is to purely informational. It is to show you, hey, it is not that hard to invest.

You can do it! It can just sit there, you don’t have to do anything, and there it goes. That is the beauty of Robo-advisors, we don’t have to know everything that is happening in the market. Sometimes it goes up and sometimes it goes down, but when it does there are automated algorithms that will re-allocate our investments for us to adjust to market.

Also, it is normal to feel like everybody else is a financial master except for you, but guess what?! Most of us don’t know what they are doing. Who has time to research companies and understand the market (ok maybe a lot of people). And if you know somebody that says they know what they are doing, well there is a good chance it’s just luck.

So there have been some updates

Some of the investments were made in May 17 and others were made in August 17. In order to compare Apples to Apples, this is calculating as if all funds were invested in August. This way, it won’t skew the standings by giving the investments made in May extra time to gain from the market. The below shows the last 13 months.

And here are the standings month over month and year over year. Guys, these change all the time.

January 2022 Investment Standings

This is very interesting because there is a big change from June 2021 update.

June 2021 Investment Standings

Houses are expensive

We all felt it. The housing prices have increased significantly during 2021 (along with a bunch of other stuff). Where the heck are we supposed to affordably live? Well you can see that Fundrise investments has done very well for itself since it is an eREIT, which is like a REIT (real estate investment trusts) that you can purchase through crowdfunding.

What is interesting is how well it did compared to the other. You can see back in June 2021 Year to Year Standing, Fundrise was in last place with an annual return of 17% (not bad). But compared to all the Robo advisors, it was doing quite poorly. Now with the rise in real estate prices, it is doing the best. Hmmm… I guess a lot can happen in half a year.

Do you want to do this with me? It can be intimidating, but the robo-advisors are tailored to your comfort level so you can be as risk adverse as you like. Here are some referral links if you are into stuff like that. Note that these promotions change all the time!

• SoFI- you get $15
• Ellevest- 3 months free
• Betterment- Free management up to $5000 for a year
• Wealthfront- Free management up to $5000
• Fundrise- No Advisory fees for first 90 days

Some Interesting Things to Point Out:

• Are you worried that you might lose money? Good, you should be. There is no guarantee that you will make money.
• The market has been very volatile recently. Make sure you answer the robo advisor questions honestly!
• If you are worried about the stock market and don’t like risk, then you should have a portfolio that is less aggressive than mine! So more bonds (less aggressive) and less stocks/ emerging markets (more aggressive).
• Fundrise supposedly has higher returns the longer you own it, and smaller returns in the beginning.
• When the stock market is doing well, investment allocations with more stocks (vs. Bonds), perform better. But when the stock market goes down, the opposite happens. Get it?
• It’s a good idea to build a habit of saving and investment, but do you know why? Well you can read Monthly vs. One Time Investments

Remember, sometimes the market goes up. Other times, the market goes down. But the trick is to put money in regularly (maybe automatically) and then forget about it. If you take it out when it the amount goes down, you never give it the time or chance to let it go back up. Can’t be so emotional here. So invest, and just keep doing what you are doing.

If you are interested in more content like this, check out my blog at yupsterfinance.com.

If you want to see recurring investments check out how I invest $500 per month!

I also will have Monthly Recurring Updates on the Performance of these Robo-Advisors. If you want to continue to see updated returns, join my email!