The past two weeks have been a rollercoaster for financial markets, driven largely by a flurry of announcements related to tariffs. However, many Wealthfront clients have taken the volatility in stride and treated this market environment as an opportunity.
Here are three takeaways showing how Wealthfront clients are responding to the market’s recent ups and downs:
1. Many Wealthfront clients benefitted greatly from Tax-Loss Harvesting.
While periods of market turbulence can be unnerving, that’s also when Wealthfront’s automated Tax-Loss Harvesting (which is included in all our taxable Automated Investing Accounts at no additional cost) can generate the most value.
In the week following the April 2 tariff announcement, from April 3 through April 10, Wealthfront traded over $8 billion on behalf of clients. Our software also captured more than $100 million in harvested losses in three days alone (April 3, 4, and 7) to help lower clients’ tax bills. These numbers are unusually high given the higher-than-normal market volatility (for comparison, we harvested a total of $145 million losses in all of 2024), but demonstrate how Tax-Loss Harvesting can be a “silver lining” when markets are down.
2. Wealthfront clients weren’t necessarily surprised by this volatility.
At Wealthfront, we run regular surveys on investor sentiment. In both February and March, only 19% and 16% of clients respectively thought the market would rise over the next six months. And over 75% thought a market “crash” was either very or somewhat probable in the next six months. As we’ve written many times, it is impossible to predict exactly what financial markets will do in the future. But our surveys suggest that clients were attuned to the shifting environment and weren’t caught off guard by the ensuing volatility.
3. Many Wealthfront clients saw recent market volatility as an investment opportunity.
Despite the pessimistic sentiment about the market, many clients kept investing—a strategy that’s likely to help them in the long run.
On Thursday, April 3 (the day after the initial tariff announcement) we saw a sharp increase in investment deposits, suggesting many clients saw an opportunity to buy when investment prices were relatively low. Deposits into Automated Investing Accounts increased by 330% compared to the previous day, and stayed elevated on Friday, April 4. Then on April 9, when the 90-day tariff pause was announced, we observed that the majority of deposits occurred early in the morning before the news broke, suggesting clients were still eager to buy when the market was down.
We’ve also seen increased demand for fixed income investing. On Tuesday, April 8, deposits into Automated Bond Ladders hit their highest level so far this year—an indication that many clients are seeking to take advantage of rising Treasury yields and diversify their holdings.
Wealthfront clients are staying the course
During periods of market volatility, we think it’s smart to focus on what’s within your control and to keep investing. As we wrote in a recent blog post, history suggests that markets tend to rise over time and staying the course is likely to work out in your favor. We’re glad to see so many Wealthfront clients are doing just that.
Disclosure
The information contained in this blog is provided for general informational purposes only, and should not be construed as investment or tax advice. Nothing in this communication should be construed as a solicitation or offer, or recommendation, to buy or sell any security.
The effectiveness of the tax-loss harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including purchases and dispositions in a client’s (or client’s spouse’s) accounts outside of Wealthfront Advisers and type of investments (e.g., taxable or nontaxable) or holding period (e.g., short-term or long-term).
Tax-loss harvesting may generate a higher number of trades due to attempts to capture losses. There is a chance that trading attributed to tax-loss harvesting may create capital gains and wash sales and could be subject to higher transaction costs and market impacts. In addition, tax loss harvesting strategies may produce losses, which may not be offset by sufficient gains in the account and may be limited to a $3,000 deduction against income. The utilization of losses harvested through the strategy will depend upon the recognition of capital gains in the same or a future tax period, and in addition may be subject to limitations under applicable tax laws, e.g., if there are insufficient realized gains in the tax period, the use of harvested losses may be limited to a $3,000 deduction against income and distributions. Losses harvested through the strategy that are not utilized in the tax period when recognized (e.g., because of insufficient capital gains and/or significant capital loss carryforwards), generally may be carried forward to offset future capital gains, if any.
Diversification, asset allocation, and automated investing do not guarantee profit or ensure against loss. Investor experiences can vary widely based on strategies and time horizons. Index funds and ETFs generally offer broad diversification, but may still expose investors to specific market, sector, or asset class risks. Wealthfront provides investment management services but may not achieve returns comparable to those of the general market or specific benchmarks.
Investment management and advisory services are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC-registered investment adviser, and brokerage related products, including the Cash Account, are provided by Wealthfront Brokerage LLC (“Wealthfront Brokerage”), a Member of FINRA/SIPC. Wealthfront Advisers and Wealthfront Brokerage are wholly-owned subsidiaries of Wealthfront Corporation.
All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Please see our Full Disclosure for further information.
Copyright 2025 Wealthfront Corporation. All rights reserved.
About the author(s)
David Fortunato is Wealthfront’s Chief Executive Officer. He joined Wealthfront in 2009 as the company’s inaugural CTO and was instrumental in launching the company to its first clients in 2011. Previously to his role as CEO, David was the President of Wealthfront. David holds a BS in computer science and economics from Amherst College. View all posts by David Fortunato
