Definition
An online investment service that uses algorithms to help manage your portfolio, making investing more accessible and affordable.
What to consider
- Assess how much market volatility you can handle.
- Align your investments with your personal comfort level.
- Revisit your risk tolerance as your financial situation changes.
Real world scenarios
- Claudia signs up with a robo-advisor, inputting her risk tolerance and target retirement date. The algorithm picks an asset mix and periodically rebalances it.
- Anthony sees lower fees with a robo-advisor than a traditional advisor, allowing more of his returns to remain invested.
- A robo-advisor steers Alexis away from panic selling during market dips, following a consistent strategy aligned with her long-term goals.
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