Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

Portfolio Strategy

Aaaaand…the Returns Are In

So far this year, a Betterment portfolio with 70% stock (our average allocation) has returned over 11%. It’s time to celebrate the rewards you’ve earned.

Articles by Dan Egan

By Dan Egan
Managing Director of Behavioral Finance & Investing, Betterment  |  Published: October 17, 2013

You can't control the news or how the markets move in a crisis. But you CAN control your investment choices.

Buying into a low-cost, diversified portfolio that automates saving and rebalancing is a strategy that delivers in the short- and long-term.

Feeling great about your investments right now? You should be (and not because we’ve all gotten a reprieve from the political drama of recent weeks).

So far this year, a Betterment portfolio with 70% stock (our average allocation) has returned over 11%.¹ It’s time to celebrate the rewards you’ve earned.

Automated investing, steady gains

When you’re willing to commit to a low-cost, diversified portfolio and bear the short-term risk (translation: hang tight when a crisis hits the fan), you’ll endure some bumps—but then you’re in for the upswing.

For example, if we look further back, since Betterment was launched in mid-2010, our portfolio has returned 41%. Not too shabby compared to your average savings account return of 1% or less.

“Be fearful when others are greedy, and greedy when others are fearful,” was the slogan Warren Buffett made famous, especially after the 2008 crash. Even more relevant today, Buffett also once suggested that the laws of physics should be applied to investing:

“For investors as a whole, returns decrease as motion increases,” he noted in a shareholder newsletter.

Or as we might say, returns increase as investor agitation decreases: Automated investing pays off. Since the darkest days of 2009—when fear was at its peak—our portfolio has returned a fist-pumping 101%.² You read that right—the Betterment portfolio has doubled in value over the past four years. That’s an average yearly return of 19%.

So if a friend or relative starts saying, “It’s times like these that prove investing is just too risky,” remind them to take a step back, and think about the returns they could have gotten from a simple, consistent investing plan. Not bad for doing nothing.

¹In order to provide the most widely useful metric, these calculations all assume a single deposit on the first day of the period and no further activity. Deposits, withdrawals and allocation changes throughout the period would all affect a customer’s actual returns. For more information on how we compute model returns, see here. We’ve updated our pricing structure since this article was published. Learn more at betterment.com/pricing.

²For information on how we compute model returns going back prior to Betterment’s launch, see here.

Recommended Content

View All Resources
How to Do a Direct IRA Transfer

How to Do a Direct IRA Transfer

A transfer of your IRA to Betterment is easy and can be done online in four simple steps.

How Will the Election Affect Your Investments?

How Will the Election Affect Your Investments?

Elections and political events aren’t likely to impact your long-term returns. Instead, focus on lowering your fees where possible, and maximizing your tax efficiency across your portfolio.

ETF Selection for Portfolio Construction: A Methodology

ETF Selection for Portfolio Construction: A Methodology

Betterment seeks to maximize investor take-home returns, which drives our investment selection criteria and process.

Start your investment plan

I am

years old and

  • Not Retired
  • Retired

.

My annual income is

.

Experience the new way of investing. Sign up today.

Start investing smarter

Get started

Refer a friend or family member and get up to 1 year managed free

Refer a friend

How would you like to get started?

Your first step toward a smarter investing future starts here.

Create a Betterment account

Go ahead and join the smart, modern way to invest.

See what we can do for you

Tell us a bit about yourself, and we'll show you the benefits of investing with us.

Get a free investing checkup

Help us get a sense of your investing approach and see how you could improve.

Transfer a 401(k) or an IRA

Move an existing retirement account into a Betterment IRA.

Download the mobile app

Enjoy the Betterment experience anywhere on the go.

Search our site

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.