We trust technology to find the best route to the airport and remind us about important events, so it’s no surprise that more and more investors are turning to robo-advisors for a hands-off, low-cost, and efficient way to manage their portfolios.
Using an online questionnaire to access your goals, a robo-advisor employs advanced algorithms to recommend a diversified portfolio, typically consisting of a combination of low-cost exchange-traded funds based on your time horizon and risk profile.
Once your portfolio is created, a robo advisor can monitor your investments and rebalance as needed to keep your allocation consistent with your goals as markets fluctuate. With a minimum investment amount, some robo-advisors even offer automated portfolio-management features like tax-loss harvesting, which can help to potentially reduce current tax liabilities and leave you more money to reinvest and potentially grow over time.
- You want a low-cost investment solution: With low or no fees and commissions, a robo-advisor can help keep costs to a minimum—because every dollar you save in fees is one you can invest for future potential growth.
- You’re saving for one or multiple goals: Whether it’s college, retirement, or a new or second home, each goal requires its own strategy. Robo-advisors can create multiple tailored portfolios aimed at helping you achieve each of your objectives.
- You don’t have the time or inclination to be hands-on: Robo-advisors can automatically create, monitor, and rebalance your investments to keep you diversified and on track.
- You want a healthy mix of assets: Robo-advisors automatically construct a diverse portfolio in line with your goals, risk tolerance, and time horizon.
If you’re looking for a low-cost and hands-off investing strategy that helps you establish an investment portfolio for one or multiple goals, a robo-advisor could be the right fit for you.
What You Can Do Next
Learn more about Schwab’s robo-advisor offering: Schwab Intelligent Portfolios®