A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

by Burton G. Malkiel

Everything is done online. Wealthfront features a selection of broadly diversified exchange-traded index funds selected to be extremely low cost. The overall investment fee is only ¼ of 1 percent per year, and all brokerage fees are included. Wealthfront automatically rebalances the portfolio and even offers a tax loss harvesting program. If one of the ETFs in the diversified set of investments in your portfolio has declined, Wealthfront will sell it at a loss and replace it with a similar, but not identical, investment vehicle. Thus, rather than costing you a potentially significant tax bill at the end of the year (as many actively managed funds do), Wealthfront actually can provide you with some capital losses that can be used to offset capital gains or capital gain distributions and up to a limited amount can be deducted from your tax bill.