Archive - March 28, 2015

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Schwab Intelligent Portfolios: Incomplete Rebalancing Algorithm

Schwab Intelligent Portfolios: Incomplete Rebalancing Algorithm

Schwab recently released Schwab Intelligent Portfolios (SIPs), “an automated investment advisory service.” It claims to “make professional advisory services available to anyone with $5,000 to invest.”

In reality, SIPs only offers one service: to “build, monitor and rebalance your portfolio,” and it doesn’t do that well.

We previously explained how SIPs builds a portfolio based on your risk tolerance, a useless measure. Now we review the two pros and nine cons of how Schwab monitors and rebalances portfolios.

Pro: Drift-Based Rebalancing

SIPs provides “daily check-ins” where “excess ETF shares are sold, and the proceeds are used to …

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