Tuesday, February 2, 2016

Checking In On The Robo Advisors


The market is off to a rough start this year, many investors have been concerned about the market for the last few years as it was making new highs every other month, you can only imagine how sour sentiment is now that the market is making multi-month lows.

Today we are checking in on the Robo Advisors, Betterment and Wealthfront.  Passive investing has been the talk of the town for the last few years, the amount of money moving out of tactical/active management into passive investing has been tremendous.  The biggest road block investors in the passive strategies will encounter is sticking to the game plan.  You see, in a bull-market all your investing sins are forgiven, the less you pay attention the better you are off, the less you know the more beneficial it is to your portfolio. The last thing you want to do in a bull market is micro manage a long-term portfolio.  However, in a bear market, you will be susceptible to the many behavioral flaws we all have.  If your plan with your nest egg is to "set it and forget it" and/or "sit tight and ride it out", your behavioral flaws might fail you exactly at the wrong time.



With the market trading below its important 200-day moving average, I'm of the opinion that this is not the time to turn a blind eye to your investments. Betterment's and Wealthfront's 70/30 portfolio mix is down to the tune of -5% so far this year.  A simple proven timing strategy in these portfolios would have you 80% in cash for the time being protection you from further downside.


Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.



     

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