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+--- Thread: 'Robo-advisor' growth hits Wall Street money managers (/thread-660.html)
'Robo-advisor' growth hits Wall Street money managers - C C - Mar 23, 2015
http://phys.org/news/2015-03-robo-advisor-growth-wall-street-money.html
EXCERPT: When it comes to investment advice, would you trust a financial professional or a robot? A growing number of people are choosing the latter, on the belief that algorithms can provide rational and dispassionate advice at a cost well below that of traditional advisors....
RE: 'Robo-advisor' growth hits Wall Street money managers - cluelusshusbund - Mar 23, 2015
I thank the best is to perty much buy an hold index funds in a devserfied portfolio... but as far as the other choices... my gut tells me to go wit the robot.!!!
RE: 'Robo-advisor' growth hits Wall Street money managers - stryder - Mar 23, 2015
The problem with any forms of automated trading is the potential for the robot to "Panic" if the right conditions are met. If you understand it's parameters then it's possible to manipulate it in a way to create an outcome that's beneficial to yourself. This of course has a large impact when you are talking about automation in the global finance sector.
The simplest way to appraise just how devastating autonoma can be is to look at large MMOs (Massively Multiplayer Online) and see what types of exploitation occur by people that are attempting to manipulate the game worlds economy or make a quick buck off that economy in the real world.
Where one game making company might build an auction system that fits with how one would exist in the real world, there is exploitation in regards to over inflated pricing, the amount of any good or stock is potentially monopolised (An example of this was in EVE-online where it's possible to buy low and sell high in the same resource, as long as you are the first to buy you make a profit and buy out anything under your base price out of both principle and to force a greater profit margin.)
It doesn't matter how eloquent the mathematical formula a trader might use, they should consider that formula to be like an encryption algorithm to a cracker. To a cracker it's just finding that weakness, the exploitation, that point that would cause panic to financial automoma.
RE: 'Robo-advisor' growth hits Wall Street money managers - Yazata - Mar 24, 2015
I'm almost entirely in funds these days. I haven't traded a stock or talked to a human stock-broker in years. I have an automated account that automatically rebalances itself periodically to maintain my desired asset allocation.
It performs as well as my account did in the go-go 90's when a broker was churning it for commissions. It didn't get hurt all that bad in the great-recession of 2008, and it has fully recovered since.