Due to inflation, your hard-earned savings may not be as valuable as they once were when you first deposited them. This necessitates the need to invest in assets, stocks, or bonds whose value increases with inflation changes. Knowing the best options to invest in is a big challenge affecting many people, especially the middle class, who do not have access to extensive investment firms that do wealth management. This has led to the development of digital interfaces like Roboinvest that use software to determine the best investment opportunities to invest in them. At the same time, diversify your portfolio with time, depending on the economic circumstances.
What is a Robo-Advisor?
Robo-advisors are digital interfaces that offer algorithm-driven, automated financial planning services that require minimum to no human supervision. The client provides information on their future goals and financial information; thereby, the robo-advisor uses the data to give advice and automatically invest client assets. Services offered include:
· Easy account setup
· Account services
· Goal planning
· Security features
· Portfolio management
· Low fees
· Comprehensive education
· Attentive customer service
Robo-advisors were launched and began working during the height of the Great Recession with the purpose of rebalancing assets within target-date funds so that investors can manage passive, buy-and-hold investments via a simple online platform. This was not a new technology, as wealth managers used automated portfolio allocation software for a few years. These days, Roboinvest advisors can perform much more sophisticated retirement planning, tax-loss harvesting, and investment selection.
Portfolio Rebalancing
Modern portfolio theories or variants are used to build passive, indexed portfolios for their users. Once initiated, robo-advisors continue to monitor these portfolios, ensuring optimal asset class weightings are maintained even aftermarkets move through the use of rebalancing bands. Band rebalancing is ordinarily time-consuming and generates transaction fees, but robo-advisors do this automatically and at virtually no cost.
Tax-loss harvesting entails selling securities at a loss to counter capital gains tax liability in similar protection, making robo-advisors cost-effective. This strategy is usually done to limit the recognition of short-term gains.
Benefits of using Robo-Advisors
· Low-cost alternatives
They reduce expenses by providing the same services at a fraction of the cost. This is especially beneficial to the middle-class, who do not have significant sources of income.
· Accessibility
The only thing required for 24/7 accessibility is a stable internet connection.
· Low start-up capital required
The minimum funds required to register for an account are usually hundreds to thousands of dollars. A few robo-advisors have no account minimum for all its standard offerings.
· Efficiency
Traditionally, for a client to execute a trade, they would need to call or meet their financial advisor and explain themselves, fill out paperwork and wait now; only a click of a few buttons is required.
Robo-advisors provide excellent services and better alternatives for good and calculated savings investment. Opening an account only requires an evaluation of your financial situation, a short risk-profiling questionnaire, time horizon, and personal investment goals. You can visit Roboinvest to open an account and begin your journey towards financial freedom and security.