It was a busy month.
While juggling between working from home with a full-time job, taking care of kids, and an ongoing renovation, I had little time to spare for my blog.
I even stopped reading the news and forgot to follow the market recently.
It was fortunate that I didn’t see my tech-heavy portfolio plunge in early September. Well, I was aware, but I was too busy to care.
As a long term buy-and-hold investor, I shouldn’t care about market volatility anyway. My aim is long term capital appreciation, so it doesn’t matter if the shares plunge as long as the companies survive and grow.
At times like these, it might be a good idea to stick with a roboadvisor, at least for the average retail investor.
The active investors will not waste a crisis like COVID – it is their moment to shine.
#1 Roboadvisors Offer “Advisors”
For those of us who don’t want to spend on a financial advisor, having a roboadvisor will be the next best thing.
Many of the robo platforms offer some form of advisor support, especially when the times get tough. Having someone to do behavioural coaching can help us stick to our financial goals.
| Roboadvisor | Financial Advice |
|---|---|
| MoneyOwl | MoneyOwl markets itself as human wisdom augmented by technology. It’s core focus is on advisors (one of the joint ventures is provident, a fee-only financial advisor company). They also provide other financial advisor related services, .e.g. financial planning, will writing, insurance etc. |
| Endowus | You can make an appointment with their financial advisor. Endowus produces a lot of educational youtube videos on finance. |
| Stashaway | They have real people to answer any of your StashAway or money management questions. |
| Syfe | Depending on your tier, you can have access to a dedicated wealth advisor for gold tiers and general access for black tiers. |
| Autowealth | You will have a dedicated wealth manager one whatsapp away. |
| Kristal.AI | Dedicated relationship manager for every private wealth client |
The average retail investor is only expected to return ~2%. But a financial advisor can boost the returns by an additional 3%.
#2 Roboadvisors Offer “Professionally Managed” portfolios
At least, they provided managed portfolios. As long as they keep you away from tinkering with your portfolio, the battle is already half won.
Most roboadvisors hire experience fund managers to construct your portfolio and employ cool-sounding strategies. Some even abandoned sticking to financial jargons and started using terms like ‘genetic algorithms’ or ‘artificial intelligence’ to sound fancy.
| Roboadvisor | Investment Strategy/Framework/Philosophy | Passive or Active |
|---|---|---|
| Stashaway | Economic Regime-based Asset Allocation (ERAA) | Passive-agressive (just kidding. I think it is a mix of passive and active investing) |
| Syfe | Factor based investing, REITs portfolio and Automated Risk-managed Investment (ARI) strategy | Passive and active |
| Endowus | Evidence based investing – tilting to value and small factors | Sort of passive |
| MoneyOwl | Evidence based investing – tilting to value and small factors | Sort of passive |
| Autowealth | Index investing | Passive |
| Kristal.AI | Genetic algorithms | Active and some passive options |
Note that all of the roboadvisors focus on asset allocation rather than picking individual stocks (with the exception of kristal.AI – it allows us to pick individual stocks and is highly customisable)
#3 Roboadvisors Offer Cold Robotic Systems
The other advantage of roboadvisors is that they are robotic, mechanical, boring. They don’t make your heart palpitate like the roller-coaster stock market. All you have to do is feed it data, set up a recurring system, contribute monthly and voila!
Let the system run automatically.
Set and forget.
The most important thing is to have discipline in investing regularly and I believe Roboadvisors make it easier to do so – the power of automation.
Conclusion
I was preoccupied with other important matters this month. But that does not mean my investments have to stop.
In fact, with Roboadvisors, every month, I will continue to set aside a small sum and invest faithfully – rain or shine.
That is where I find value in roboadvisors.
As we head into the US elections month, we can only expect more volatility ahead.
Fatty's Finance 