Whether you've been to an investment advisor recently or not, all the news articles and research studies about robo-advisors are probably making it clear to you just how much investment technology has evolved over the years. The first robo-advisor entered the scene in 2008, but if you went to a financial consultant within the eight years before that, you may have already had your first encounter with this type of technology without even knowing it.
Automated investment advisor software
Automated portfolio allocation technology has been in use by human advisors and stock pickers since the early 2000s. Robo-advisors' arrival on the scene in 2008 made the software they were using available to almost anyone with an Internet connection. This software uses algorithms to offer financial advice based on mathematical rules.
In the early days of the technology, human advisors entered the required information into the platform and used it to inform the financial advice they give. Today, this algorithmic trading software has become so advanced that the average investor is often able to enter their own information to receive the advice they need.
Now that it's been about a decade since the first automated investment advisor became available, regulators and investors are becoming savvier when it comes to the investing technology that is now available. Today there are more than 100 platforms that are offering automated financial advice in various forms, all based on algorithms and mathematics.
Evolutions in investment technology
The main benefit of being able to use this online trade analyzer software yourself is savings because automated advice is much less expensive than visiting a human advisor. Another perk is that automated financial advice can serve as a way to check your math when investing in stocks and eliminate the emotions you feel when investing your hard-earned cash.
Investors who use an automated platform are generally very knowledgeable when it comes to technology and the markets in general, so they often already have ideas about where certain investments will likely be in a certain period of time. The problem is that our emotions can get the best of us when we're attached to a particular stock because of the story behind it, but an automated investment advisor can give us the math that shows why we are probably right or, in the worst-case scenario, why we should reconsider a particular trade.