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How does a robo-advisor determine an individual's investment portfolio and goals?

Curious about robo-advisor

How does a robo-advisor determine an individual's investment portfolio and goals?

A roboadvisor uses algorithms and data analysis to determine an individual's investment portfolio and goals. When a person signs up for a roboadvisor service, they are typically asked to complete a questionnaire or survey about their investment goals, risk tolerance, and time horizon. The roboadvisor then uses this information to create a customized investment portfolio for the individual.

The algorithms used by roboadvisors typically take into account a variety of factors, including the individual's age, income, savings, and investment goals. They also consider the current market conditions and historical performance data for different asset classes. Based on this information, the roboadvisor will recommend a mix of different investments, such as stocks, bonds, and exchangetraded funds (ETFs), that are designed to help the individual achieve their investment goals while managing risk.

As the individual's circumstances change over time, such as if their investment goals change or if market conditions shift, the roboadvisor will adjust the portfolio accordingly to keep it aligned with their objectives.

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