What is an investment robot?
Investment robots are basically a system that invests in an automated way, taking into account the investor’s profile and financial objectives.
A registration process is carried out in which the investor answers some crucial questions in order to determine their profile. The more knowledgeable the investor is about the financial market, the better educated the robot will be, and consequently the more results it will achieve.
This is a technology that has been growing a lot in recent years worldwide, used by both beginners and experienced investors.
Robots aren’t actually movie-like machines as we imagine, they are algorithms and software on an online platform that work according to a series of specific rules and configurations.
By analyzing the investor’s profile, a computer program is able to establish the best operations that can be carried out, without neglecting the objectives to be achieved.
This is a good solution especially for those who have little time to analyze the stock market but don’t want to stop investing. They buy and sell assets, with operations that bring greater balance to the portfolio.
How does it work?
The programs and software identify market trends, they have a function similar to that of advisors in indicating risks and the best investment options, but they “charge” much less for this.
First of all, the person who chooses to invest in an investment robot must fill in a questionnaire answering different questions.
These include the level of risk you are willing to take and your objectives (to assess whether short-, medium- or long-term investments are more worthwhile).
In addition, we must understand that there are two types of investment robots.
- Robot advisor: an automated investment alignment, balancing and planning service. It works as if it were an advisor, suggesting how to allocate your resources to get a certain return within a certain period;
- Robot trader: as the name suggests, it acts like a trader and is also known as algotrading (algorithmic trading). In other words, it trades financial assets in an automated way, buying and selling shares.
As much as it is a platform investing your money, for strategies to be successful and secure, they must respond to numerous parameters in their configuration.
The truth is that even if you want to invest using robots, it’s essential to have a basic knowledge of the investment world and how the stock market works.
Robots undoubtedly bring numerous advantages such as saving time, automating the process and various other benefits, but there are also possibilities for errors, they are not perfect and, because they depend on the algorithms working correctly, as well as a good database, sometimes there can be investments that are not so advantageous.
But is it worth it?
As we’ve already said, having a basic knowledge of how the stock market works is essential if you want to invest safely and get results.
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