logic of roboadvisor

[Zoot Allures]

My understanding is for a small price roboadvisors sell or buy stock everyday to ensure your portfolio remains balanced

IE you want to be conservative so you put 50% into the money market and 50% in stocks
then at the end of everyday they rebalance your equity

IE stocks rise which throws off your risk portfolio so they sell some stock and put it into your safe money
or when stocks drop they buy more stocks with your safe money

It seems to me this means everyday you either sell high or buy low which eliminates the decision of when to get out in a bull.

My thoughts are you stay in during a bear but might want to cash in during a bull so a roboadvisor automatically makes the hard decisions

Anyone disagree ?????

 

[Ponderling]

Your examples are not off.
But the RA can have its place for folks who have little desire or aptitude to try to stay on top of the issues you discuss.

And by say, keeping cash to a fixed level it can force you to stay invested with the share you commit to equities.
That can work for you, as you are less tempted to try to bet you can time the market moves correctly to shed excess cash and dive deeper into equities..