Finally, something to help any investor.
Robo-Advisors. from moneysense.ca - Generally, robos provide a set number of soundly constructed portfolios composed of ETFs that are automatically matched to each investor’s needs, based on an online questionnaire which determines the investor’s risk tolerance and objectives. Each portfolio is subsequently rebalanced automatically as needed whenever actual balances diverge significantly from their target allocations.
It is difficult for many people to find ways to save and invest their funds. There are some innovative ways to save now because of computers programs. Computer programs can buy ETFs at very low costs by buying an ETF once and spreading the costs out over all of the clients. The costs of running the programs and paying some managers are then very low.
Robos provide a set number of soundly constructed portfolios composed of ETFs that are automatically matched to each investor’s needs, based on an online questionnaire which determines the investor’s risk tolerance and objectives. Each portfolio is subsequently rebalanced automatically as needed whenever actual balances diverge significantly from their target allocations
These robo-advisor accounts can have very small amounts to very large amounts and they will have lower annual management fees. All the client has to do is sign up and fill in a questionnaire indicating what kind of preset investment plan want and their risk levels. The computer will then put hte clients funds into one of their preset portfolios based on a variety of ETFs. By being invested into ETFs your funds are automatically well diversified. The robo-advisor will also automatically rebalance the portfolios periodically as needed to keep the ETFs investment strategy on target. Robo-advisors are great in that they don't have any emotion. Emotion is actually one of the problems with investing. Emotion can't tell which way a stock is going and when to buy and sell. With robo-advisors the fund manager will tweek the computer setup a bit now and then, then let the ETF work within the market place. As usual, it will go up and down and over the long run it will likely go up as the market goes up.
For people with very little money there is a company that will take your credit card charges and round them up to the next dollar and take the difference between the charge and the next dollar up (charge= $7.23 rounded up to $8.00 leaves $.77 to invest) and invest the funds for you. If you use the credit card enough and have for example, 20 charges and you might come up with an average of 50 cents rounded up would equall $10, which would be invested in an ETF for you. The company simply asks what kind of investment is wanted from a choice of ETFs and they automatically put your funds in with everyone else and buy some of the ETF. It is most likely a small amount but it could add up after awhile, especially if the ETF appreciates at a decent rate.
There are other companies coming on line with other ideas for accumulating then buying some ETFs which in turn creates a good long term savings account. They may buy one you pick or usually one that fits your investment type (as indicated in the aforementioned questionnaire. It is one way to put funds aside and let them grow over time via the market place. The biggest problem is trying to figure out which one has the best pricing and the best results.
These types of companies are very new though and it is impossible to guage their overall success at this point. The system does seem simple enough though and the results should be very reasonable.
Robo-Advisors. from moneysense.ca written by: unknown date: unknown