Work, family, and business commitments have the tendency of holding you back from trying a hand in investment. And even in the off-chance that you do, they still find a way of limiting your productivity. But what happens when you cannot have a great time fighting off productivity.
To help solve these unavailability and inconsistency issues, most investment service providers have started embracing automated investing. An additional feature that either helps you create a personalized investment portfolio, manage an existing one or both.
But how does automated investing work?
It starts with identifying an investment company that supports automatic investments. And it doesn’t have to be just robo investors, though they too are a great option, it can be virtually any investor drawn from such fields as real estate, shares and stock markets and innovative finance like peer-to-peer lending sites. The automated investments craze has swept throughout the different sectors of the investment world. To help you get started, we take a look at some of the ways in which you can earn decent passive incomes through automated investing.
You then have to select the auto investment option that either helps you create the portfolio or just takes over management after you decide on your preferred investment options
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Who can benefit from these auto investments?
- The working class looking to build a side income
When you are working two or three jobs every day or juggling between work and school, you have zero time to learn about different investment opportunities. But you still need to invest if you are to create a supplemental income stream. In such a case, you will need an automated investment opportunity that takes care of your investments right from portfolio creation to its management.
- Mums and Dads:
Achieving a level of financial freedom is just as important as running a happy family. It’s hard to always be available and still make time for your investments. But what if you didn’t have to choose between either? Automated investments make it possible to make time for your family while the systems make money on your behalf.
- Individuals seeking to master investments in a specific industry:
There are two ways of learning about a particular subject. You can either sit in class or behind online tutorials, or you can start learning by watching a trading tool in action. Most auto invest tools don’t just execute buy and sell orders blindly, they leave a trail of investment data that you can use to master learn from the system’s mistakes and improve on.
- Career investors:
If you are a career investor, such as a money market trader, diversification plays a key role in minimizing risks and expanding your take home. And since it is practically impossible to effectively monitor and manage handful portfolios effectively, you will need an auto-investment tool to help manage some.
What are the pros and cons of automated investments?
Criteria used to identify the most potent auto investment markets:
- Ease of use
- Acquisition costs (if any)
- Minimum investment and operating balances required
- The annual average rate of return
- Access to education and investment training
- Regulation and reputation
Best performing automated investment services in the country
What should you avoid when choosing different auto investment options?
- Get-rich-quick hype
The internet is rife with cons and scammers hoping to profit from your naivety in a particular niche. These individuals have therefore come up with bold and highly exaggerated assertions about the profitability of their ‘proprietary’ auto trading software. Before committing to any auto-investment tool, research extensively about its effectiveness by consulting reputable review sites like the Better Business Bureau (BBB). And if it sounds too good to be true, it probably is and the more reason to think it through.
- Unregulated products
Don’t pay to test out an automated system. You will be risking more than its acquisition costs when you trust it with your capital investment. This is especially true for relatively new auto trading systems that are neither approved nor regulated by the relevant agencies or have no history of effectiveness. You will be wise not to take the developers word for it. And if they have total confidence in the auto-investor they will be more than willing to offer free trial periods.
- Auto-invest tools of ill-repute
The better business bureau and Trust Pilot maintain large databases of verified customer reviews about different products, brands, individuals and services. Check out these reviews and customer trust scores before committing to the preferred auto investor tool.
- Pulling off the plug too quickly
When the financial crisis rocked the United States money markets in 2007/8, most stocks and shares shed more than 50% their value. Today, however, virtually every brand has recovered its original market share and stock value. We understand that staring at your investments shed value day after day is not easy. We discourage you from canceling every investment that cedes ground to negative news or commentaries from industry leaders without thorough research on its probability of rebound.
- Investments that you have little to no knowledge about
Robo advisors and numerous other auto trading tools will hold your hand right from the investment portfolio creation stage. This implies that you don’t necessarily need any prior experience in this market. But we believe that if you are to create a perfect investment portfolio, you need a basic understanding of your preferred industry.
Automated investment systems have played a key role in advancing the finance and investment industry. The fact that you can create a portfolio and manage it on your behalf, independently, in virtually any profitable investment field has pulled in every investment enthusiast. It has also drawn in scammers and cons who seek to profit from its misuse in equal measure. You, therefore, have to be extremely careful about the automated systems you commit to. Research extensively about an auto-invest tool’s effectiveness before purchasing or subscribing to its use or trusting it with your hard earned cash.
What are automated investments?
Automated investments refer to a hands-free approach to trading and investments where all your interactions with the market are handled by a specially designed software/algorithm. Most of these algorithms will take total control of the investment process right from the creation to the management of a portfolio.
What types of investment supports automatic investments?
Auto-invest tool shave been developed for virtually conceivable investment niche. Whether you are interested in forex, cryptocurrency, shares, stocks, and bonds, there will always be an automated system specially designed for the market.
How do I vet the effectiveness of an automated investment?
With the number of scam auto-investment tool peddlers on the rise, it becomes necessary to vet a tool extensively before trusting it to handle your cash. Start by checking the credulity of its developers and Distribution Company. More importantly, check its customer trust score from trusted reviews sites. If possible start by testing it in a demo or risk-controlled investment environment.
When do I need an auto investment system?
You will need an effective auto-investment system if you are too busy to handle the investments productively, don’t have much experience in the field and want to earn as you learn and also if you have a highly diversified portfolio that you can’t seem to manage effectively.
What is the minimum investment amount when using an automated investment tool?
If you were to start building a portfolio with Stash, the investment app, you would only need $5 while Plus500 requires a minimum $100. Some will even require that you start with a $1,000+ in initial deposit or minimum operating balance.
How can I set up an automatic investment online?
You first need to identify your area of interest. For instance, do you prefer crypto, forex or shares, and equities investments? You then have to find the most effective and auto-invest tool suited for the market. Most of these adopt a set and forget approach and therefore take no more than a few minutes to install and launch your investments.
How do auto-invest software providers make money?
When you embark on a search for auto trading software, you will realize you can either buy or embrace a monthly subscription. The investment algorithm providers, therefore, make money through the sale of these products or in the form of subscription income. Some will, however, advance it for free provided you maintain a specific a minimum operating balance or complete a fixed number of trades for a particular period.
How does an automated investment tool avoid exposing my capital to unnecessary risks?
Any effective automated investor software will be backed up by a series of risk management tools. These range from an extensive investment portfolio diversification to such practical risk management tools like the use of stop loss and take profit features. Others, like the robo advisors, will resort to asset rebalancing and tax loss harvesting. It is imperative that you first confirm this with your preferred auto-invest software provider before registering.