Well the financial e-zines did it again. The Daily Wire featured SigFig saying its algorithms: “Will spotlight advisor “mistakes,” including the use of funds costing as little as 50 basis points”.
So I went to SigFig and answered the questions truthfully from my personal standpoint. First, they didn’t pose sufficient questions for someone in my retired position. IMHO, after experiencing two of these robos, I would prefer to label them bozos because they all continue, IMHO to prove that one size doesn’t fit one.
I answered I had no income but there was no question about my expense and cash flow needs. So I got 6 Vanguard ETF’s. 6% was allocated to a REIT ETF. I personally and professionally consider investing in REITS at this time in this market to be almost as dumb as buying an annuity.
17% was allocated to short-term treasuries. At the current yield they’re – dumber than an annuity.
19% allocated to US bonds, even dumber than the prior two. Now is not the time IMHO to be in US bonds, intermediate, long or short. Period!
16% was allocated to emerging markets. I got out of emerging markets a little while ago after profiting from being in them. I certainly don’t want to be in a broad-based ETF positioned across the board in the BRICS or most other emerging markets.
16% was allocated to international equities. I don’t agree that I want to be in most European markets. France, NO. Greece, NO. Spain, maybe. Germany YES. UK, probably not right now. Italy, NO. Etc., etc., etc.
IMHO this is another example of preying on a totally unsuspecting public that is cost oriented. It is clear, IMHO, that the algorithm in use to create this Mean Variance Optimized portfolio is no more or less defective for most individuals than all the others. Select your view of the expected returns and standard deviations of the various asset classes and reap your result no matter how defective. This application, like the others I have personally seen, represents, IMHO, quicksand for people in retirement. It does not deal with real cash flow needs and parameters at all. In fact I believe this application is painfully defective. I re-entered the site and changed my expected holding period from 10+ years to 5-10 years with NO resultant change in the portfolio mix. Checking the staff I see the Chief Investment Officer doesn’t even relate a CFA or CIMA designation just a BS in accounting and an MBA from the Wharton School. The rest of the executive corps, IMHO, look like a bunch of techie nerds and high tech marketing types.
As the article states: “The San Francisco-based registered investment advisor got its start as data publisher WikiInvest”
In my opinion, this whole operation is a joke. However, with the media focusing on cost of investing and not the competency of investment advice what would one expect? IMHO, another case of buyer beware – be VERY aware.