VG robotic advisor

[perinova]

Vanguard has a robotic advisor. It can apparently rebalance for you automatically. Good idea. But it cost 0.2% of assets to be in the program.

I won't use the service because I don't think I should be paying VG 0.2% for something robotic. Should that be free?

 

[teej1985]

No, it shouldn't be free. You can use a Lifestrategy fund for free rebalancing.

 

[frayne]

Paying two tenths of a percent for doing a little simple math, no thanks!

 

[target2019]

Rebalancing is simple math.

How many accounts? How many funds?

Here is a google sheet to get you started. It can be downloaded as excel too.

https://www.mymoneyblog.com/simple-portfolio-rebalancing-spreadsheet-tool.html

 

[Closet_Gamer]

Paying two tenths of a percent for doing a little simple math, no thanks!

+1. It probably takes an hour each quarter (or every 6 months) to do this yourself.

0.2% of your portfolio/4 hours per year is a pretty great hourly rate.

 

[OldShooter]

... I won't use the service because I don't think I should be paying VG 0.2% for something robotic. Should that be free?

"Should" implies some kind of standard or rules. The world very rarely works that way. VG has developed a product and offering it to the market at a price. It's simple -- if you don’t like the price don't buy the product. "Should" does not pertain.

If VG finds that the product is not selling well, they may change the price, change the product, or simply withdraw it. That's how capitalism works.

 

[PokeNTexas]

It's not just simple math for some. Investing is math + behavior. Rebalancing introduces potential behavioral missteps. Automatic rebalancing removes that potential problem.

 

[Sunset]

It's not just simple math for some. Investing is math + behavior. Rebalancing introduces potential behavioral missteps. Automatic rebalancing removes that potential problem.

True, but it could introduce another problem.

During rising rates, bond funds decrease in value, so automatically sell stocks to buy more bond funds, which keep falling as rates keep increasing.

A person would look, know that rates are going to go up due to Fed declaring so, and could wait longer to re-balance , getting even more bond funds at a lower price. Yes it is DMT

 

[perinova]

"Should" implies some kind of standard or rules. The world very rarely works that way. VG has developed a product and offering it to the market at a price. It's simple -- if you don’t like the price don't buy the product. "Should" does not pertain.

If VG finds that the product is not selling well, they may change the price, change the product, or simply withdraw it. That's how capitalism works.

Fully agrees. Just saying I wouldn't pay 0.2pct of portfolio. It will probably be 'free' by market pressures some day. Knowing that VG is already handsomely paid for their services in other ways by managing portfolios.

Is it possible to plug into another service to do automatic rebalancing? Something like M1-finance?

 

[PokeNTexas]

True, but it could introduce another problem.

During rising rates, bond funds decrease in value, so automatically sell stocks to buy more bond funds, which keep falling as rates keep increasing.

A person would look, know that rates are going to go up due to Fed declaring so, and could wait longer to re-balance , getting even more bond funds at a lower price. Yes it is DMT

"You just blew my mind!" Kramer

Personally, we're all in VG Target Retirement Income. They rebalance. We don't look. Seems to work out.

 

[perinova]

No, it shouldn't be free. You can use a Lifestrategy fund for free rebalancing.

I am currently looking for the best portfolio. Lifestrategy is one of the best option, unfortunately bonds are taxable. There is also VTMFX to look into but, unfortunately it has no foreign exposure.

 

[Onda]

I never in my life rebalanced so for me it was 0% fee and 0% effort.