Should I Use a Robo-Advisor?

Robo advisors, introduced in 2008, have become popular for managing investments with algorithms. They offer low fees and automate tasks like rebalancing and tax loss harvesting. While they provide a cost-effective entry into investing, they lack the personal touch and control of human advisors. Robo advisors are best for basic investment needs, but those with complex financial situations may require human advisors. As technology evolves, it's important to stay informed about new services and advancements in AI.

What is the primary function of a robo advisor?

• To provide legal advice

• To write prescriptions

• To cut your hair

• To manage an investment portfolio

What is one of the main advantages of using a robo advisor over a human advisor?

• Higher fees

• More complex financial planning

• Personalized advice

• Lower barrier of entry

What is rebalancing in the context of robo advisors?

• Buying and selling assets to maintain a desired allocation

• Harvesting crops for profit

• Balancing a checkbook

• Rearranging furniture

What is a potential downside of using a robo advisor?

• Inability to automate tasks

• High fees compared to human advisors

• Lack of control over individual stock choices

• Complete control over stock selection

Which investment strategy is primarily used by robo advisors?

• Real estate flipping

• Day trading

• Cryptocurrency investment

• Modern Portfolio Theory

Why might someone choose not to use a robo advisor?

• They want to avoid human interaction

• They dislike technology

• They prefer automated services

• They have complex financial needs

What is a benefit of combining a robo advisor with a human advisor?

• Increased fees

• Reduced investment options

• Access to complex financial planning

• Less personalized service