Robo advisors

irish_investr

I'm never certain if its "roboadvisors" or "roboadvisers"

A number of Apps on google play, lots of talk on financial media. Would you use one?

I'm inclined to want to try, at least for a portion of a diversified portfolio.

Pro's
-emotionless, cheap...more?

Cons
-not independent(?), unproven...more?

tomfoolery60

irish_investr wrote: »

I'm never certain if its "roboadvisors" or "roboadvisers"

A number of Apps on google play, lots of talk on financial media. Would you use one?

I'm inclined to want to try, at least for a portion of a diversified portfolio.

Pro's
-emotionless, cheap...more?

Cons
-not independent(?), unproven...more?

Cons: Not available to Irish investors

Would be a good idea but the tax treatment of investment funds and EtFs outside of a pension is a nightmare here so the model elsewhere wouldn't work.

newacc2015

They have very limited use in places like the US and UK. They are a good idea. It is a customised portfolio for lower income individuals, who are traditionally not served by wealth managers. Even in the US, most private banks are not interested in clients who have less than $10m in assets, when they were happy with clients with say $1m a few years ago

I personally see limited benefits considering ETFs such as Vanguard have such low management fees. One of the biggest benefits of robo advisor is that they are tax efficient. They constantly buy and sell your assets to limit tax liabilities. There will unlikely be such an offering like this in Ireland.

irish_investr

hmm, fair enough, the tax harvesting as applied in the states is not really applicable here.

But what about the other aspects then: collecting personal data, designing a somewhat personalized portfolio, implementing and maintaining/adapting it over time depending on market and personal developments? Personally I WOULD trust (maybe even prefer?) a machine to do this, but I do have some reservations. I think this "Could" be truly great, but at the end of the day I also think it depends on who is running the show. I'd want to be sure that the machine was independant and not just pushing me into the most expensive funds, but I think evolution and competition should take care of that "over time".

One way I'd definitely go for it right now would be if there was a robot dealing with a very specific category of investment. Just as example, if there was one dealing just with precious metals (GLD, SLV, PPLT, PALL, GDX, GDXJ, SIL, COPX, REMX - physical gold, silver, palladium, platinum, and a couple of miners) and allocating efficiently (by trend/fundamentals/whatever) I'd be very inclined. In fact, I think I'll start working on that one right away

You'd nearly need to see the source code

Rob87

I'm living in the US right now and have been using both Acorns.com and Wealthfront.com - both seem to be a pretty straightforward way to get started with investing without needing to spending a large amount of time learning about the exact mechanics (at least at first). I'm happy to achieve a return in line with the market and take a lower risk vs trying to beat the market and potentially suffering large losses.
I've still got a lump sum in savings accounts in Irish banks and I'm looking for a method to replicate a diversified portfolio of index funds, similar in nature to what the roboadvisors provide - just managed manually. What's the best way to achieve this? Seems like this would be useful for the OP also.

irish_investr

Rob87 wrote: »

I'm living in the US right now and have been using both Acorns.com and Wealthfront.com - both seem to be a pretty straightforward way to get started with investing without needing to spending a large amount of time learning about the exact mechanics (at least at first). I'm happy to achieve a return in line with the market and take a lower risk vs trying to beat the market and potentially suffering large losses.
I've still got a lump sum in savings accounts in Irish banks and I'm looking for a method to replicate a diversified portfolio of index funds, similar in nature to what the roboadvisors provide - just managed manually. What's the best way to achieve this? Seems like this would be useful for the OP also.

Can't do it without rolling up your sleeves and starting to follow markets. Personally I have a ton of semi-robots, coded in java and running off free data scraped from the web. Most prominent components are
-"100-age in stocks"
-CNN's Fear&Greed index
-allocation copied from an approx. allocation of several large global pension funds eg nbim-dot-no , the worlds biggest SWF
-Domestic equity allocation based on idem
-a very simple alpha strategy based on 5star funds + an index bear
-a "Dogs" portfolio (worked out very well for Irish stocks 2016)..looking at Toshiba at the mo..
Some of them are real, some are paper-traded (ie I've no real money in them). But most of them are somewhat successful, which has taught me that its possible to beat the markets over time on a risk-adjusted-return basis with a bit of effort and planning.

I think this is the best way to get started "gently": have a look at a "target return" fund - eg Fidelity. Find the fund that corresponds to your age, examine the portfolio, and copy the general allocation. Then, tweak. Any takers?

Rob87

Thanks, some good advice. I've got some target portfolios recommended by the robo advisors I've been using so could copy them in Ireland.

1/ what's the most popular / highest rated investment platform at the moment? Assuming that I'm investing primarily in index funds for the long term

2/ any ideas in whether investing through a Ltd company has advantages over doing so personally? Assuming the lump sum is owned by me personally and all taxes are paid