The Robo I Strategy



Charts comparing the performance of the Robo I Strategy against a typical 60/40 stock/bond portfolio allocation and the i3, an index that represents the average returns of the do-it-yourself investor.

About the Robo I Strategy

This strategy is a typical stock/bond portfolio on steroids. Like many robo-advisors, this strategy uses just two ETFs: VTI, an ETF representing the broad US equity market, and TLT, an ETF representing long-term treasuries. Unlike most robo-advisors, this strategy dynamically weights the component ETFs according to market conditions. The result is a strategy that massively outperforms a typical 60/40 stock/bond allocation, making it well worth the 5 minutes a month to rebalance the portfolio.

Strategy ETFs

Vanguard Total Stock Market (VTI)

The Vanguard Total Stock Market ETF is a passive ETF that seeks to replicate CRSP US Total Market Index. The index includes 4,000 constituents across mega, large, small and micro capitalizations, representing nearly 100% of the U.S. investable equity market, VTI can be traded easily in any size, and true holding costs are even lower than its microscopic fee. In short, it’s incredibly cheap to access and to own.

iShares 20+ Year Treasury Bond ETF (TLT)

The iShares 20+ Year Treasury Bond ETF tracks a market-weighted index of debt issued by the US Treasury with remaining maturities of 20 years or more. TLT is the most popular and liquid option in the segment. It also charges a reasonable fee and tracks its index well, making it a great choice for investors who want long-term Treasury exposure.