If the name of a robo advisors comes to mind at first, you may not know what it really is.
But if instead of this complicated term we talk to you about an automated manager for financial investments, you will already have a more approximate idea about its real meaning. On considering that it is the same thing, robo advisors or automated manager. And whose application is developed so that you can invest your money in financial markets, but from a different perspective.
Not only in the purchase and sale of shares on the stock market, but in other investment models. As for example, in mutual funds, pension plans, warrants or even derivatives and that can allow you an optimization in the operations that you are going to carry out from now on.
Its strategy is based on providing financial advice and management in investment portfolios through algorithms and where human participation is practically non-existent. What does this really mean? Well, the mistakes that can be made in movements in the equity markets are significantly less and as a consequence of this action you will have more possibilities to make your personal savings profitable. To the extent that profit margins can be improved.
Another feature that distinguishes this very special automated manager is that it can generate a portfolio of more personalized investment and tailored to the real needs of retail investors. Not surprisingly, it can offer them the financial solution they need at any time and in any situation, but in a fully automated way since it is more sensitive to correct decisions to be made in the investment sector. For example, if it is better to invest money in defensive sectors or on the contrary, there is an opportunity to take positions in new technologies.
Robo advisors from fintech
It is a very recently created service that already has many followers among users around the world. Mainly due to the innovation of its proposals since the composition of its investment portfolios may vary depending on the state of the different financial markets. But the best of all its features is that it achieves this important objective with great accuracy and therefore can be improve results of operations than if they were carried out in a personal and individualized way. That is, without the contribution of this tool in financial management.
What operations is this financial service for investment used for? Well, fundamentally for the main movements in the equity markets, among which the buying and selling shares on the stock market or in other financial assets. As for example, raw materials, precise metals and in some cases very specific in virtual currencies or cryptocurrencies. From an investment approach that is much more agile than in the traditional formats with which we were used to operating until very few years ago.
Some of its benefits
It is clear that this is a product closely linked to investment and this is a hard factor of all doubt. But it has been modernized in recent months until the risks of its operations are limited. In the sense that the expectations of small and medium investors are not altered by fluctuations in the financial markets. On the other hand, it cannot be forgotten that one of the most defined characteristics of equities is that they generate a large difference between their maximum and minimum prices that can even reach 10% in the same trading session. Well, through this automated manager these percentages are significantly minimized.
On the other hand, this very special and innovative automated manager at the same time makes it possible to rebalance the financial assets chosen by users or clients. That is, it provides them with greater security when carrying out their operations, whatever they might be. It is not in itself a management to use, but on the contrary it is active and personalized to differentiate itself from other models in the management of private investment.
Origins of these managers
In any case, and for your better understanding, it is necessary to go to its background to better verify its evolution in the financial markets. It is true that it is not a new product since its appearance took place between 2007 and 2009, but it has been perfected over the years. From 2016 It has already become a new alternative for investors to make their savings profitable with greater guarantees of success and to be able to count on the service with greater offers from the companies in charge of marketing it.
At the moment it is not a very popular product, but there are already several financial intermediaries that offer this service to their clients. Some of the best known are Indexa Capital, Finizens, Inbestme and Finanbest ?. But the good news for retail investors is that more and more such companies are emerging. To invest your capital from another approach in more conventional active management.
The investment of the future
Robo advisors can now be seen as the investment of the future. This is an undeniable fact that is underpinned by some of its common denominators and already taken advantage of by some very low commission pension plans.
Among these common denominators are the following that we expose below:
- Lower costs: you can save a very important part of the expenses that the most classic services entail.
- It is a very accessible product: in the sense that we can hire it from quite modest amounts for investors. Generally from 3.000 to open an account and participate in its financial benefits.
- Diversify investment: allows the investment portfolio to be extended to more financial products and assets. With the double objective, on the one hand to preserve the capital, and on the other hand to improve the results in your income statement. With the added value that the entire process will be digitized from the beginning.