INVESTING FOR THE 21ST CENTURY

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  • Fiscal Frontiers

ROBO ADVISER REVIEW: 2019

February Update

(Disclaimer at end of post)

OUR ROBOTS


To get a sense of how the markets unravelled in late 2018, check out our 2018 Year In Review. In contrast to last year, 2019 has seen a surge in the markets and our robots have reaped the rewards. By the end of February 2019, our robo-advisers were up a total of 8.65%, from a combined $2,000.00 to $2,172.99, as follows:

  1. WealthSimple: $1,078.43

  2. Questwealth: $1,094.56

(Note that for 2019 we’ve equalized the two accounts to both be worth $1,000 as of January 1st, so that we can better compare them). The growth in these two accounts can be charted like this:

The Questwealth account has pulled slightly ahead of the WealthSimple account. However, speaking more generally, these two accounts performed almost identically, at least in terms of trends (i.e., if one went up, they both went up). This isn’t too surprising. When opening these accounts, we did our best to make our settings as aggressive as possible, answering all the questions in a way that made sure it was known that we were long-term investors aiming for growth and that we were not afraid of incurring short-term losses for the chance at long-term gains.

If you are interested in investing with Questwealth, use our referral code (baxg1ibj) to get your first month of management free!

Before we compare our WealthSimple and Questwealth accounts directly to the ETFs we have chosen for comparison, we should discuss those ETFs individually.

OUR ETFS

We have outlined Our Control Group for this blog, being three Vanguard ETFs. As a quick recap, we are keeping track of:

  • The Vanguard S&P 500 ETF (VOO): which is designed to track the S&P 500, the most commonly cited benchmark for stock market investors.

  • The Vanguard Total World Stock ETF (VT): which is designed to track the global stock markets as a whole, with holdings in 8,109 different stocks and 42.1% of the market value being derived from outside North America.

  • The Vanguard Short-Term Government Bond ETF (VGSH): which is our “risk free” rate of return, obtained by having the fund track the Bloomberg Barclays US Treasury 1–3 Year Bond Index, which includes fixed income securities issued by the US Treasury with maturities between 1 to 3 years.

As above, we’ve done the math such that each ETF is tracked as if we’d made a $1,000 investment on January 1, 2019. Any dividends will be reinvested. On February 28, 2019, the value of an investment in each of these ETFs looked like this:

Unsurprisingly, with world markets lifting following the 2018 plummet, the ETFs actually mirrored one another closer than our two robo accounts, moving in almost perfect lockstep throughout 2019. Our VGSH investment did exactly as it was meant to do; it had held steady during the 2018 falling market and it did the same during the bump of early 2019.

ROBOTS VS. ETFS

The next table compares our robo accounts to our ETF control group. Note that, if you just want to look at it and get the gist of what happened, then the robo-investments have remained with solid lines and the ETFs are shown again with dashed lines:

And the results show that, at least for the first two months of 2019, when the markets were largely rising, our robots tracked the general market tracking ETFs, though they have fallen a little behind, largely, it looks like, due to an early January dip that the ETFs didn’t experience. Each investment started at $1,000 on January 1, 2019, and the value of each of these on February 28, 2019, ranked best to worst, was as follows





CONCLUSION

We hope to add more robo-investors over the coming months and years. If you have a particular robot you think we should be looking at, then let us know in the comments, on Twitter @fiscalfrontiers or via email at fiscalfrontiers@gmail.com. Alternatively, if you have an ETF that you think would be a good one to track, then let us know via any of those channels, too.

Next week, look for our review of our past few months dabbling in crypto-vesting!


We at Fiscal Frontiers are not investment advisers and our only goal is to report to you on the performance of investments we have made so that you can consider our experience along with all the other information available to make an informed decision on what is best for you. Investing in the stock market is inherently risky and all of a particular investment could be lost.

 
 

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