Millennials do not be fooled. 21st century investing requires benchmarks and tools to make an informed choice to achieve the best returns for retirement.

Ok, last week was indeed volatile.  That is what dark pools love, lots of volatility to trade ETF’s, with lots of volumes provided by millennials’ retirement assets shoved into ETF’s, conned into the concept of a “passive revolution” where cheap means better. The more the new passive robo-advisors trade, the more they get paid for their volume by dark pools, on your nickel.

Portfolio turnover and brokerage trading costs matter.  Is your robo-advisor giving you returns after all fees, including portfolio turnover statistics and all brokerage trading costs?  It is time to look at the hard data, the analytics, to determine what money manager is in your best interest, active or passive.  Accepting that passive is better, without the raw data, is like buying a Tesla without a test drive or jumping into an Uber without looking at the Uber driver’s ratings data.

How Did Your Portfolio Perform Based on Computerized Modern Portfolio Theory(MPT), last Month?

Whoops!  The concept of modern portfolio theory(MPT) is to be in various asset classes because they will not all go down at once (of course as the 2008 the financial crisis demonstrated and many economists have long found this theory, efficient market hypothesis and modern portfolio theory are clearly flawed).

Here is a chart over the last month of the computer driven algorithm selections of one of the largest online “robo-advisors”.  Compare the MPT computer generated returns to to Not On My Nickel’s core retirement benchmark funds.  72% of the robo advisor’s portfolio was in the asset classes, taken from their  recommended chart, shown below, for a 31 year old’s retirement portfolio, demonstrated in the chart below vs Not On My Nickel core retirement benchmark funds.

Modern Portfolio Theory Selections at Robo Advisor

Note that the blue and purple lines, in the chart below, represent Not On My Nickel benchmark funds that can be accessed directly, without brokerage fees, or mandatory arbitration restrictions, such as the robo-advisors charge and mandate.  This is in a down market, over the last month, but the data holds up for over fifteen years, where the low-fee active managers have outperformed the low-fee, modern-portfolio theory based passive strategies.  These are Not On My Nickel’s platform benchmarks– Why?

They outperform the relevant index, they are diversified, the managers are fiduciaries, act in your best interest, they do not trade with dark pools, have over five year track records exceeding their index and you do not have to agree to mandatory arbitration, or be subject to conflicted intermediaries–what more would you ever want or need to grow your retirement assets–low fees and top performance.

Not On My Nickel has nothing against passive strategies, if the selections of ETF’s outperform the active managers, after all costs for a minimum of five years, they will make it to our platform.  However, they just do not make the cut as these charts show.  It is clear none of the current computerized passive strategies do out-perform the top active managers.  It is Wall Street hype, as the data clearly indicates.  Yes, the average active manager underperforms, but why wouldn’t you invest with the few that do outperform?  Yes, Wall Street never says all active managers underperform, some do and Not On My Nickel can show who has outperformed the passive modern portfolio theory passive strategies.

Data does not lie, yet, words can misrepresent or deceive, as you can clearly see from the chart below.  Hard to believe that you have been duped? Take a look.  You have.  The “passive revolution” is but hype created by Wall Street to benefit Wall Street.


Asset Allocation and the Robo Algos



As this chart indicates, the greatest percentage of holdings all did go down at once, miserably under performing top-performing low-fee, actively managed balanced funds, not only for the month, but for over 10 years running.

Yes, but isn’t this robo-adivsor option cheaper than traditionally actively managed funds?

Actually, no.  Once one adds the management fee of .25% and the cost of the ETFs, rebalancing fees, and portfolio trading costs, the costs are comparable to the “online robo-advisor” option are more expensive, after all costs and the performance of the passive computerized ETF’s underperform, miserably, the low fee active managers.

How Do Modern Portfolio Theory selections compare to traditional balanced funds and a simple aggressive growth fund, with an overweight on an American technology superstar?

Take a look at this chart.  You be the judge.  You might want to reevaluate the concept that cheap doesn’t necessarily mean better. Yes, performance matters after all fees. Investment selection by trained experienced money managers make a significant difference.  The green, blue and purple lines represent active management, after all fees.  The purple active fund (PRWCX) underperformed the ETF, VTI, since it held bonds, not just stocks.  The ETF’s on the charts below are before advisor fees and trading costs!


Compare active to passive

The data speaks for itself.  Passive management based on modern portfolio theory is harming your retirement nest egg.  Media and Wall Street are all a buzz about the “passive revolution”.  Why?  It benefits them.  Time to look at the data.  Come join us at Not On My Nickel.  We believe in informed choice— our charts and tools empower you with the data to take charge based on data analytics, not based on Wall Street spin.

Contact us and we will add you to the list to receive our tools and platform first.  Do not let your portfolio be dragged down by the pink, red and yellow lines in the chart above.  It is not 21st century investing.

Informed Choice is 21st Century Retirement Investing

An informed choice, with NOMN’s inter-active cloud-based tools and platform, that empower you to take charge of your retirement assets to access the best active or passive SEC performance filling money manager, without Wall Street hype, is the 21st Century retirement investing revolution.