After publishing my post, The Best Asset Allocation Of Stocks And Bonds By Age, I decided to do a comparison of what I recommend versus what digital wealth managers like Personal Capital recommend. Not only has Personal Capital developed a great free app for managing your net worth that most of you already use, it also manages over $2.5B in client assets according to its $75M Series E funding press release.
For those who don’t know, from 2013-2015 I consulted for them in their marketing department and still meet up once a quarter since they’re in San Francisco. Thus, I’m very familiar with Personal Capital’s people and product.
Its board of advisors include:
Harry Markowitz, recipient of the 1990 Nobel Memorial Prize in Economic Sciences. He pioneered work in portfolio construction and is known as the “Father of Modern Portfolio Theory.” Markowitz received his Ph.D. from the University of Chicago and is currently a professor of finance at the Rady School of Management, University of California, San Diego. His Modern Portfolio Theory is central to the design of Personal Capital’s portfolios.
Shlomo Benartzi, a renowned behavioral economist. He received his Ph.D. from Cornell University, and is currently a professor and co-chair of the Behavioral Decision-Making Group at UCLA’s Anderson School of Management.
Together they advise a team of portfolio management professionals and have created several long-term investment strategies. But first, let’s have a brief overview of Modern Portfolio Theory.