I'm sure a number of us use Personal Capital for an overview of investments and their allocations. Has anyone else listened to the presentation the Personal Capital financial advisors give you?
The idea is that the S&P 500 is overweight is certain sectors (technology, financials etc.) whole underweight in others. PC states by equal weighting across all sectors, using a bunch of ETFs, we can minimize the risk during a sector's crisis (ie. 1999, 2008) and beat the S&P 500 by cutting losses.
They claim a gain of 1.2% over the S&P 500 over the last 25 years (of course past returns don't guarantee future results). They have a fancy looking graph where the PC gains start looking substantial.
However, they charge 0.89% AUM. When you include the expenses for the "custom ETFs", that might add another 0.2%. Why would anyone go out on a limb for a net 0.1% theoretical gain, with plenty of fixed costs?
I'm planning to politely decline their services, unless someone more knowledgeable can convince me otherwise.
The idea is that the S&P 500 is overweight is certain sectors (technology, financials etc.) whole underweight in others. PC states by equal weighting across all sectors, using a bunch of ETFs, we can minimize the risk during a sector's crisis (ie. 1999, 2008) and beat the S&P 500 by cutting losses.
They claim a gain of 1.2% over the S&P 500 over the last 25 years (of course past returns don't guarantee future results). They have a fancy looking graph where the PC gains start looking substantial.
However, they charge 0.89% AUM. When you include the expenses for the "custom ETFs", that might add another 0.2%. Why would anyone go out on a limb for a net 0.1% theoretical gain, with plenty of fixed costs?
I'm planning to politely decline their services, unless someone more knowledgeable can convince me otherwise.
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