Should I Use a Robo-Advisor? 

So I’m assuming switching from one robo advisor to another is also a no go?

Exactly! Robo-advisors are very bad for taxable accounts. Just keep it simple and invest into VT for total diversity or a combo of VTI & VXUS.

@@kathrynmercier4874 That depends. A lot of robo advisors tend to use a lot of the same etfs-vanguard, Schwab, ishares-so they might just hold onto them and change things a bit more slowly.

Have you heard about the FIRE movement ? Check them out. They dont sell anything. Grass root movement to help people to invent and retire early. They advise to invest only on whole market ETF.

Great that you took the plunge! Awesome decision... Check out the book 'Retire Before Mom and Dad'. You'll learn how easy it is to make a diversified portfolio that ends up being a little more efficient than a robo-advisor... But you also learn you can keep doing what you are doing - no real "wrong" answer!

Yes, this is a good explanation. This is the same reason i started using robo advisor.

The wealth you pass to the next generation can have a profound impact on your heirs, providing educational opportunities, the capital to start a business, or financial support to your grandchildren.

To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal. Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.

can you endorse any ?

TERESA JENSEN WHITE does a perfect job. look her up on the web

thanks for the info . Found her website and it really impressive

Thank you Kent Brockman !

@@marksaldanha2906 ;)

Only issue is they underperform, based on their allocation, and slightly overcharge. A simple 2-fund portfolio beats both.

@@akin242002 My point wasnt to support robot investors. My point was to remove emotion from financial decisions. Be like an insect that will cut off a trapped limb and move on. (Thats not to say we should remove ethics, scruples, or social responsibility. Im still against pump and dumps, and refuse to invest in bad things such as private prisons, and am all for helping people and the environment)

@@akin242002 but they make you feel like you’re doing something. I once met someone who responded to mutual funds as “boring” and only wanted to do “exciting” stocks.

Best financial service I’ve used!

I think most robo advisors invest in index funds. Their benefit is that they will balance between several different index like us, emergeing, developed, muni bonds, etc. Some will buy the individual stocks in the funds directly instead of ETFs if you have a high enough portfolio value to avoid fund fees.

@@username65585 could just buy target date funds in that case.

Yeah I know Acorns pretty much does this exact same thing. Any and all funds they invest on your behalf are all publicly available ones you can do themselves. You’re paying for the convenience and the extra perks like being able to shop and get % refund reinvested automatically into your account and stuff

My acorns fund has consistently beaten my government tsp despite them both being in index funds.

@@Erosis Target date funds are effectively a type of robo-advisor.

The 0.2% fee is for managing your portfolio, which index funds don't do. The 0.02% fee covers operating expenses for the index fund.

@@jaketyler7088 Yeah but my point was that if you're just following the market with robo advisors too, why pay them extra when you can get the same results with index funds at a tenth the cost?

@@feynstein1004 You're paying for the management of the funds, since sometimes just buying a cheap index fund won't automatically and immediately reinvest dividends, rebalance, or properly diversify when balances get out of whack. It's probably not a big deal for non-taxable long-term retirement accounts, but for general taxable investing accounts it's definitely saved me thousands.

@@ShadowRaptor8 Hmm that sounds interesting. Thank you for the reply 🙂

Correct. It's cheaper and more efficient in the long run to have a Bogleheads-style (3-6 fund) portfolio with all index funds. Like, the difference over 20 years could be $100k! However, to someone disinterested in basic personal finance education, it is still better to use a Robo advisor than to not use anything at all!

@@arildproctor4273 Nice overview, but who is the coach that guide you? And how do I get in touch with them? I'm in need of their expertise.

Hopefully you already have at least $4 million, otherwise I have some bad news for you...

Is this a joke?!

Exactly, I was looking like but I would

Me neither!!!

Ya, their fees can be high, but too bad most humans can be pesky and not do what they're supposed to. Financial advisors are part asset manager and therapist.

You don't want .4% APY?

Robo-advisors could be the new savings account for down payments and college savings

that robots attitude would be priceless thou xD

Depends on the robo advisor. I have an acorns account and it's pretty consistently made of the same 6 vanguard funds.

Yes. It's usually for individual taxable accounts or people that have IRA's (of any flavor). I ended up transferring out of Robo Advisors because even with the Tax Loss Harvesting, it was simply cheaper in the long run to make an Index-Fund heavy Bogleheads portfolio in M1 Finance. (I also offset my own capital gains with my "play money" individual stocks Robinhood account as every year there's a stinker or two that I end up selling at a loss)

@@Omar-et7sb Thanks for the insight! I'd like to adhere to boglehead principles myself so my idea of a portfolio, even in a taxable account, is probably much simpler than what would call for a robo adviser!

@@KaironQD Exactly, and most likely to perform better when fees accounted for. :) One change I do on my own TAXABLE Bogleheads portfolio is to use Vanguard's municipal bond ETF instead of total bond market etf. Although, it's possible the total bond market one (BND) outperforms the municipal one even when accounting for taxes... But it's how I soothe my own brain to be as tax efficient as possible :)

@@Omar-et7sb I am totally new at this, and I have just started reading and educating myself, but I want to start investing , which robo advisor you think is best?

@@imanomari2041 Oh, and that link has a 'Getting Started' link at the top. Less intimidating that you would think to get started!

Same here 😅

Yes. The robo advisors make the barrier of entry even lower for some thou... Like super low minimum balances, etc.

For the most part yeah. They tend to manage your allocations for you so it tends to be on autopilot.

I would recommend it at your age to start out with. If you're not in debt, and you're not struggling to survive put what little you can into investments. You don't need loads of money to start. I recommend building up a savings in a high-yield savings account too with 6-9 months of expenses. I got mine through Ally bank and I've been with them for 8 years now and that's also where I have my robo-portfolios. I just throw money into my robo-portfolios and they divy it up into different ETF's and Bonds and let the algorithm manage it. So, basically just set it and forget it. Unless you have specialized training and experience you should not be buying/selling stocks yourself. I say let the professionals and the algorithm handle it. I'm not too proud to admit I'm not smart enough to do it myself. You're still young too so, now's the time to take risks, make mistakes, and grind it out.👌

@@Priinsu thank you, this info helped a lot , i currently have a so fi account and want to look into so fi automated investing, so this advice is very much appreciated. how would you say Ally bank has benefited over those 8 years? any cons?

@@kevinseven748 having a high-yield saving account is much better than having a savings account with banks like chase where you get cents for interest every month. I get way more in interest every month. The cons are like any other investment it can increase/decrease in value based on your chosen level of risk when you first set up your portfolio and you don't necessarily trade the stocks yourself although you do have the option to if you want. I just opt have it done for me it so I don't have to think about it. I also get dividends and interest on my robo-portfolio accounts too every month.

Made him 20 years younger

But it requires capital in order to make the money, so if you don't have much cash personally to invest then you could make more by offering it as a service and charging for it.

@@grantbaugh2773 Not really. If such tool can make you 20% a month. Starting with a $1000 means you end up with a $66K in 2 years. $5.3M in 4 and almost $47M in 5.

@@Adelzu Right, but you could do that and then still sell the tool to people for even more money.

@@grantbaugh2773 once it starts being used on a larger scale, it will not work anymore. Think of it as follows If everyone uses the algorithm, it says buy, no one sells. Then everyone wants to sell because the price got too high but no one is buying. It basically breaks itself on a large scales. Entropy. It is way more profitable to keep such algorithm to yourself if it really works. And if it kinda works and makes 5% or less, sell it, and make your money.

Probably the worse one as it holds some in cash... meaning it's not 100% investing.

It doesn't matter if you are a current hodler or a newbie, you can capitalize on the fluctuation of bitcoin by trading with good strategy/signals....

Building a good investment portfolio is more complex so I would recommend you seek Johanna Walters support. This way you can get strategies designed to address your unique long/short-term goals and financial dreams.

This current dip is a huge opportunity to buy the dip and also higher volatility to yield more profit for day traders.

It's a privilege to have her social chat contact, whatapp!

+1

I have also been trading with her, The profits are secured and over a 100% return on investment directly sent to your wallet. I made up to $60,000 in 2months trading with her ...

Please how do I reach her ?

@Willard Andy I also needed her info too I’ll write her thanks

The crypto market is highly profitable trading under an expert like Mrs Angela Wong. I got her recommendation from my cousin ever since then out financial story has been a success

I’m a long term investor I just withdrew my profit over £140,000 her trading strategies is second to none.

So what is the solution to solve the problem of automation?

@@lilpenguin092 good code is rare, and hardware remains hard. Libre/free open source software (e.g. BSDs, Linux) and to a lesser degree hardware (e.g. RISC-V, Betrusted's Precursor) are some examples of automation frameworks based upon peer reviewed, scientifically repudiated research, note: they are free (as in freedom, but the code is also free as in no cost). If you start mixing money with such constructs, you're going backwards. Physics doesn't have financial constructs and explains a known universe awfully accurately to the point of keen observations about black holes and distant stars from billions of years ago. Money can't do that. Most money constructs are symbolic representation systems (aka "fiat currencies") with no intrinsic value. Meanwhile, computation is also, fundamentally: symbolic representation, but without the constraint of a financial construct, significantly more efficient and easier to optimize. Thus, you can have computers operating 24x7 based on entirely open source software and hardware, but banks will always have constrained hours and intrinsic delays. Even cryptocurrencies have excruciatingly poor performance and efficiency characteristics relative to most other pure computation because in large part, they are attempting to mimic aspects of banking constructs, which should be considered obsolete and deprecated. Think: 23rd century Star Trek and you'll get a better understanding of computation, exploring galaxies, sharing innovations, and dispensing with selfish self serving Ferengi fiscal concepts and you will be able to explore stars and galaxies and only monkey with primitive money constructs as necessary. Money is very human, there are millions (billions?) of other species on Earth alone which do without most human constructs and seem to live simpler lives more in balance and in harmony with their surroundings. Automation? Think back to the industrial "revolution" and ask yourself: is pollution while making the rich richer and poor poorer something we should be continuing on as scientists have reached consensus that we are entering Earth's six mass extinction event? Is more money or more Bitcoins going to help you or your children live in accordance with life on the planet, or is it immantizing the eschaton?

Lol...People who invested into VTSAX for 20 years straight have outperformed robo advisors. Overrated for most people outside a few. Lottery winners, star musicians, star actors, trust fund babies, and pro athletes are the ideal customers for robo advisors. Robo-advisors tend to be more conservative and focused on low volitility rather than growth. Thus richer clients who are very busy and ignorant about investing are the ideal customers.