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Investment Seminar
©2014 Wealthfront Inc. 
• Rising Market 
• Declining Market 
• Indifferent 
2 
When would you prefer to invest? 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 
• Rising Market 
• Declining Market 
• Indifferent 
3 
When would you prefer to sell? 
Investment Seminar for Airbnb
Actual Behavior 
Investment Seminar for Airbnb 
©2014 Wealthfront Inc. 
4 
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 
50% 
40% 
30% 
20% 
10% 
0% 
-10% 
-20% 
-30% 
-40% 
-50% 
$400 
$300 
$200 
$100 
$0 
-$100 
-$200 
-$300 
-$400 
Equity funds net New Cash Flow ($B) 
12 month S&P 500 Index Return
Slow and Steady Wins the Race 
©2014 Wealthfront Inc. 5 
Investment Seminar for Airbnb
Which market behavior would you prefer? 
Investment Seminar for Airbnb 
©2014 Wealthfront Inc. 
6 
500 
100 
Today + 30 Years 
500 
100 
Today + 30 Years 
500 
100 
Today + 30 Years
Investment Seminar for Airbnb 7 
©2014 Wealthfront Inc. 
Don’t Worry About Market Performance
©2014 Wealthfront Inc. 
• The one that previously performed the best 
• The one that previously performed the worst 
• It doesn't matter 
8 
Which investment would you prefer? 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 9 Investment Seminar for Airbnb
Investment Seminar for Airbnb 10 
©2014 Wealthfront Inc. 
Don’t Chase Returns
Which investment would you prefer? 
Asset Class Expected Return 
Standard 
Deviation 
US Stocks 6% 17% 
Foreign Stocks 5% 18% 
Bonds 3% 6% 
Risk Adjusted 
Return 
0.35 
0.28 
0.50 
Optimal Mix 4% 7% 0.55 
©2014 Wealthfront Inc. 11 
Investment Seminar for Airbnb
Investment Seminar for Airbnb 12 
©2014 Wealthfront Inc. 
Diversification Matters
©2014 Wealthfront Inc. 
• Buy more of the winners 
• Buy more of the losers 
• Do nothing 
13 
How do you maintain your ideal risk/reward? 
Investment Seminar for Airbnb
Natural Progression of Risk 
100% 
75% 
50% 
25% 
Investment Seminar for Airbnb 
©2014 Wealthfront Inc. 
14 
20% 
15% 
10% 
5% 
0% 
0% 
% Equity Standard Deviation
Investment Seminar for Airbnb 15 
©2014 Wealthfront Inc. 
Need to rebalance
©2014 Wealthfront Inc. 
• Great mutual fund with 1% management fee 
• Index fund with 0.05% fee 
16 
Which investment would you prefer? 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 
• Research says both will generate market return 
• Therefore, index fund will likely outperform by 0.95% 
17 
Returns Net of Fees 
Investment Seminar for Airbnb
Investment Seminar for Airbnb 18 
©2014 Wealthfront Inc. 
Fees Matter
Which investment would you prefer? 
Asset Class Expected Return 
Standard 
Deviation 
Risk Adjusted 
Return 
US Stocks 6% 17% 0.35 
Real Estate 7% 18% 0.39 
©2014 Wealthfront Inc. 19 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 
• US Stocks: 
• Real Estate: 
20 
After Tax Returns 
Investment Seminar for Airbnb 
6%*75%*(1-.25) + 6%*25%*(1-.25) = 4.5% 
7%*50%*(1-.25) + 7%*50%*(1-.4) = 4.375%
Risk Adjusted Returns 
Asset Class 
Pre-Tax Risk 
Adjusted Return 
After Tax Risk 
Adjusted Return 
US Stocks 0.35 0.26 
Real Estate 0.39 0.24 
©2014 Wealthfront Inc. 21 
Investment Seminar for Airbnb
Investment Seminar for Airbnb 22 
©2014 Wealthfront Inc. 
Taxes Matter
©2014 Wealthfront Inc. 
• Different allocations for taxable & IRA accounts 
• Use index funds 
• Rebalance with dividends 
• Tax loss harvest 
23 
Ways to minimize taxes 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 
• Invest steadily 
• Ignore the market 
• Don't chase returns 
• Diversify 
• Rebalance 
• Minimize fees 
• Minimize taxes 
24 
Summary 
Investment Seminar for Airbnb
©2014 Wealthfront Inc. 25

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Invest Well Seminar

  • 2. ©2014 Wealthfront Inc. • Rising Market • Declining Market • Indifferent 2 When would you prefer to invest? Investment Seminar for Airbnb
  • 3. ©2014 Wealthfront Inc. • Rising Market • Declining Market • Indifferent 3 When would you prefer to sell? Investment Seminar for Airbnb
  • 4. Actual Behavior Investment Seminar for Airbnb ©2014 Wealthfront Inc. 4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% $400 $300 $200 $100 $0 -$100 -$200 -$300 -$400 Equity funds net New Cash Flow ($B) 12 month S&P 500 Index Return
  • 5. Slow and Steady Wins the Race ©2014 Wealthfront Inc. 5 Investment Seminar for Airbnb
  • 6. Which market behavior would you prefer? Investment Seminar for Airbnb ©2014 Wealthfront Inc. 6 500 100 Today + 30 Years 500 100 Today + 30 Years 500 100 Today + 30 Years
  • 7. Investment Seminar for Airbnb 7 ©2014 Wealthfront Inc. Don’t Worry About Market Performance
  • 8. ©2014 Wealthfront Inc. • The one that previously performed the best • The one that previously performed the worst • It doesn't matter 8 Which investment would you prefer? Investment Seminar for Airbnb
  • 9. ©2014 Wealthfront Inc. 9 Investment Seminar for Airbnb
  • 10. Investment Seminar for Airbnb 10 ©2014 Wealthfront Inc. Don’t Chase Returns
  • 11. Which investment would you prefer? Asset Class Expected Return Standard Deviation US Stocks 6% 17% Foreign Stocks 5% 18% Bonds 3% 6% Risk Adjusted Return 0.35 0.28 0.50 Optimal Mix 4% 7% 0.55 ©2014 Wealthfront Inc. 11 Investment Seminar for Airbnb
  • 12. Investment Seminar for Airbnb 12 ©2014 Wealthfront Inc. Diversification Matters
  • 13. ©2014 Wealthfront Inc. • Buy more of the winners • Buy more of the losers • Do nothing 13 How do you maintain your ideal risk/reward? Investment Seminar for Airbnb
  • 14. Natural Progression of Risk 100% 75% 50% 25% Investment Seminar for Airbnb ©2014 Wealthfront Inc. 14 20% 15% 10% 5% 0% 0% % Equity Standard Deviation
  • 15. Investment Seminar for Airbnb 15 ©2014 Wealthfront Inc. Need to rebalance
  • 16. ©2014 Wealthfront Inc. • Great mutual fund with 1% management fee • Index fund with 0.05% fee 16 Which investment would you prefer? Investment Seminar for Airbnb
  • 17. ©2014 Wealthfront Inc. • Research says both will generate market return • Therefore, index fund will likely outperform by 0.95% 17 Returns Net of Fees Investment Seminar for Airbnb
  • 18. Investment Seminar for Airbnb 18 ©2014 Wealthfront Inc. Fees Matter
  • 19. Which investment would you prefer? Asset Class Expected Return Standard Deviation Risk Adjusted Return US Stocks 6% 17% 0.35 Real Estate 7% 18% 0.39 ©2014 Wealthfront Inc. 19 Investment Seminar for Airbnb
  • 20. ©2014 Wealthfront Inc. • US Stocks: • Real Estate: 20 After Tax Returns Investment Seminar for Airbnb 6%*75%*(1-.25) + 6%*25%*(1-.25) = 4.5% 7%*50%*(1-.25) + 7%*50%*(1-.4) = 4.375%
  • 21. Risk Adjusted Returns Asset Class Pre-Tax Risk Adjusted Return After Tax Risk Adjusted Return US Stocks 0.35 0.26 Real Estate 0.39 0.24 ©2014 Wealthfront Inc. 21 Investment Seminar for Airbnb
  • 22. Investment Seminar for Airbnb 22 ©2014 Wealthfront Inc. Taxes Matter
  • 23. ©2014 Wealthfront Inc. • Different allocations for taxable & IRA accounts • Use index funds • Rebalance with dividends • Tax loss harvest 23 Ways to minimize taxes Investment Seminar for Airbnb
  • 24. ©2014 Wealthfront Inc. • Invest steadily • Ignore the market • Don't chase returns • Diversify • Rebalance • Minimize fees • Minimize taxes 24 Summary Investment Seminar for Airbnb