I Tried 6 Online Investing Platforms, Here’s How I Did

Illustration by Richard Chance
We’ve been told there’s financial stuff we need to do to officially become adults — like setting up a 401(k), or saving for a down payment for a home — but many of us are happy just to do the basics, and it’s hard to think about how to take our money further. We’re silently struggling with things we hear about and want to be doing, but don’t quite know how. For me, that was the stock market.
I’m a CPA, my full-time job is analyzing data and improving processes to reduce expenses or increase revenue for a Fortune 10 company. These days, most of my investments are in real estate. A year ago, I decided to look into stocks. But I wasn't sure where to even begin.
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I started, as one does, on the internet. I tried to research individual companies and stocks, but to be honest, it became too complicated and time consuming. It explains why only 14% of U.S. household directly own stocks. Eventually, I do want to learn how to do this, as I realized this is why seasoned investors make the big bucks.
But there’s an easier option: robo advisors. Unlike your typical human financial advisor, robo advisors are automated platforms that create tailored investment portfolios based on your financial goals and comfort level. These guys make it really easy to invest online. They do the research for you, and if there’s a change in the market, the platforms automatically update to optimize portfolio performance.
Since I couldn’t make up my mind between the different robo advisors, I decided to do an experiment and try seven different platforms to see which performed best. I know this sounds extreme — and I’m lucky I have the money the try this — but I was honestly curious about whether one platform was really so different from the others.

I figured I might as well invest it instead of buying more Korean beauty products on Amazon

In August 2017, I invested $1,000 in each of the following robo advisors: Betterment, Ellevest, Wealthfront, and SoFi. I also invested in Fundrise because they focus on real estate investment, and it would be interesting to compare. As a control, I put $1,000 into the S&P 500 stock index (via Etrade) to compare these robo advisors’ market performance.
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Here’s what I like about investing through these companies: It was surprisingly easy. They ask you a bunch of questions like: What are you saving for? How comfortable are you with risk? How close are you to retirement? Then, boop boop be bop, it spits out an asset allocation that is tailored to you. I found that my portfolios were all Aggressive or Moderately Aggressive, meaning they are heavier on riskier investments (like U.S. stocks and foreign stocks), and lighter on less risky investments (like municipal bonds). This means that if the market is doing well, my portfolio will generally perform better than less risky investments. But if the market tanks, my portfolio loses more.
When I told my friends about my investing experiment, they were worried. What if the market tanks? To be honest, I’m a little worried too. The blaring headlines every time the Dow dips makes me nervous. Are we going to crash again?
It’s important to stay disciplined when reading these headlines when you’re investing, and I plan to update my portfolios to be more conservative as the market continues to rise. As it goes up, I get less and less comfortable with risk, and will want to revisit those original robo advisor questions a couple times a year. I also plan to update my portfolio if/when my personal circumstances change. For example, if I need money to buy a home, I will be more conservative. However, if the market crashes and hits all-time lows, I will put more money in the market so I can ride the wave when it goes up. It’s the buy low, sell high advice. This brings up another money cliche: It’s unfair that it takes money to make money. But if you have money sitting in the bank, it is important to do something with it.
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Here’s why: My savings account is only earning me a crappy 0.01%. That’s literally $1 interest for $10,000 of savings a year. Do the math: that sucks. (I don’t have a CD or a high yield savings account, but I'm looking into the latter.) Last year, inflation was at 2.1%, which means my money is losing value faster than what it is earning in interest.
There was another thing to consider, which is my personal relationship with money. When I have more money sitting in my bank account, I tend to spend more. I’m not sure why, but when my balance is over a threshold, it takes twice as long to save than when it is under it. I know this is a very nice problem to have, but it’s my problem. And I figured I might as well invest it instead of buying more Korean beauty products on Amazon (Do I really need a Leaders Face Mask every other day?). I have an emergency fund in a separate account, and I’m not in a hurry when it comes to my investments — I’m planning to use that money for retirement. So even if the market takes a big hit, I have 30 years for it to bounce back.
So, how’d I do?
For the most part, the trends for all the robo advisors were all similar. When the S&P500 takes a dip, so do the others. When it goes up, the others increase as well. The exception is Fundrise, because its investments are in real estate, not the stock market. The monthly ups and downs don’t impact them in the same way (although in the crash of 2008, housing and stocks both plummeted). As I said before, based on the questions of each financial investment company, I invested in portfolios that were Aggressive to Moderately Aggressive. Wealthfront, Betterment, and Ellevest have the most aggressive portfolios, thus had better performance. Fundrise, being that it is 0% in stocks, is less aggressive.
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If this investing experiment taught me anything, it’s only invest what you are comfortable losing.

There were a couple times when the market dipped, the first being in September 2017, and the second in February 2018. Interestingly, Ellevest was up when all the others were down on February 5, but it’s now back in line with the others. As of February 19, the S&P500 is outperforming the others in the year-to-date percentage category. Does that make me question the purpose of all these financial management companies? Nah. I still like that they are diversified and automatically update when needed, and the results change daily anyway.
My original investment from August 2017 was $5,990. As of February 19, 2017, it had increased to $6,487. I earned $497, or 8.31%, in 6 months. That’s a lot more than 30 cents, which is how much I would have if I had left my money in savings. As for which platform performed the best, it ranked S&P500 ($103), Wealthfront ($99), Betterment and Ellevest tied ($87), SoFi ($78), and Fundrise ($44). These amounts are not including upfront fees, as most are taken from your investment balance over time. Each robo advisor has the same fees of 0.25% a year, with the exception of Fundrise (they charge 1% for asset management and investment advisory) and Etrade ($6.95 upfront). At SoFi, the 0.25% fee only kicks in after you hit $10,000. As you can see, the S&P500 has the greatest returns, at over 10%. Fundrise, has the least, at over 4%, but is consistent.
As for what I learned, the first is that the more aggressive your portfolio, the higher the return. But that also means I lost more when the market dips. So when you sign up, answer the questions honestly to see what fits you best.
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Regardless of what you decide, the habit of investing will likely benefit you in the long run. The past year was a phenomenal year for the market, and I understand that my investments might not perform so well in the years to come. But if this investing experiment taught me anything, it’s only invest what you are comfortable losing. If you are trying to save for a down payment for the near future, don’t invest all of that money because any loss could really impact you in the short term.
I also learned that it's important to not react to the market. When the market falls, your instinct might say to sell and cut your losses. If you do this, you will never give it the chance for it to go back up and ride that wave. In addition, similar to setting up your credit card on auto-pay, set up automatic investing every month. Investing isn't a one and done kind of thing, and if it is automatic, you won’t even miss it. While I didn't set up auto payment for the experiment, I have 5 percent of my salary set up for my 401k.
And last but not least, if you want to retire, you have to invest. Whether it is through your 401(k), IRA, or your own personal investment portfolio, you need money to work for you, rather than only you working for it.
Amy Fujisaki is an analyst, a CPA and a frugal investor. She likes to invest because, to her, it is easier than working. She runs a financial blog for millennials called Yupster Finance.
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