Beginning yourinvestingjourney can be daunting.
How do you invest in stocks?
Do you need a lot of money to start?
There’s one beginner-friendly option that’ll do the heavy lifting for you: a robo-advisor.
These automated financial advisors are driven by AI and programmed to put your money to work.
What is a robo-advisor?
A robo-advisor is an automated financial advisor and investment platform.
The system uses a software algorithm to build and manage your portfolio so you don’t have to.
While some robo-advisors have minimum account requirements to start, it’s usually a low barrier to meet.
For instance, you might only need $500 to get started.
A brokerage account is a place for you to manage your investments yourself.
Robo-advisors let a computer manage it for you based on your style and preferences.
Most robo-advisors usually charge a low, flat fee, around 0.25% a year on your total investments.
Online brokerages tend to charge more or higher fees.
Robo-advisors are great for hands-off investing.
Some robo-advisors also perform tax-loss harvesting.
Read more:5 Investment Accounts Everyone Should Have
What do robo-advisors invest in?
Robo-advisors tend to invest in index funds and exchange-traded funds (ETFs) to keep costs low.
Essentially, it’s a form of passive investing since your funds follow a preset formula for investing.
ETFs are vastly the most common investment vehicle for robo-advisors.
Read more:What Does It Even Mean to Build Wealth in 2022?
But they’re not always the best choice for everyone.
There aresome leading robo-advisorsin the game, but not all of them have the same requirements and offers.
Here are a few.
Regardless of which robo-advisor you choose, it should be easy to get started and maintain an investment portfolio.
