Should you use a Robo Advisor for your Investments?

If you know a little bit about investing, you’ve probably heard of the term “robo advisor” before. No it’s not an actual robot that advises your investing. It’s an automated investing platform that uses cleverly built algorithms to help you manage your investments.

You might ask why you would use a robo advisor and why you might choose it over picking your own stocks to trade. Well there are several reasons why. Here we will explain what a robo advisor is and whether you should use one.

What is a Robo Advisor?

The first robo advisors began appearing around the 2008 financial crisis in the U.S. This algorithmic investment technology was already being used by financial institutions and managers, but now they were being made available to the public.

Although there are now many robo advisors in the U.S, there still are not a lot of options in Hong Kong. SoFi was the first to launch a robo advisor in Asia which we call Auto Invest. We will refer to it as Auto Invest for the rest of this blog. 

To put it simply, Auto Invest uses a clever algorithm to intelligently invest your money in a diversified portfolio. With just a tap, your money will be invested in over 30 countries, 40 industrial sectors and 2,000 stocks. Auto Invest will use exchange traded funds from leading asset managers such as BlackRock and Vanguard to build your portfolio.

And the best part about this? You don’t have to worry about keeping an eye on all these investments yourself. Auto Invest intelligently monitors your portfolio around the clock. It will rebalance it based on market conditions.

Should I use Auto Invest?

Auto Invest is a really great option to use if you are a busy person who does not have a lot of time to manage your investments. In fact you can even set up Auto Invest to make recurring monthly payments from your bank account so your investing is effortless. It really is a great way to grow your money for the future.

Auto Invest is also great if you’re someone who doesn’t know much about investing. All you have to do is give Auto Invest your financial goals, time horizon and comfort level with risk. Auto Invest will customize a globally diversified portfolio that suits you. Then you can sit back and let it do the rest for you!

It’s important to bear in mind that Auto Invest won’t make you rich quickly. But what it will do is ensure your investments are intelligently managed. It should be part of a long term investment strategy.

If you also want to pick your own stocks to trade you can easily switch back to the direct invest interface in the SoFi app where you can trade over 10,000 stocks commission-free.

Automation is here to stay

The idea of an algorithm managing your investments for you might sound a bit scary. But in fact there is nothing to fear. Algorithms are now incredibly complex and intelligent and can manage investments better than a lot of people.

There are no emotions or rash decisions made by algorithms if they see the stock markets suddenly dip. Only intelligent decisions based on data.

And automation is increasingly becoming a part of our everyday lives! Just look at the development of self-driving cars.

So what are you waiting for?

At SoFi we want to make investing easy and accessible to you and we think Auto Invest is a great option for that.

So if you don’t know much about investing, you’re not sure where to invest your money or you just don’t have time, then automate it with SoFi!