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The stock market is down again today, and that sinking feeling is all too familiar for many investors. After weeks of volatility, major indexes are sliding again on concerns over economic growth and interest rate policy.
While some seasoned investors may see dips as a buying opportunity, not everyone is comfortable making investment decisions during a market slump. That’s where robo-advisors can step in.
What Is a Robo-Advisor?
Robo-advisors are online platforms that help you invest by automatically building and managing a portfolio for you based on your goals and risk level. They ask a few questions about your financial situation and your comfort with risk, then suggest a tailored portfolio. Essentially, they act like a financial advisor who never sleeps—all online and without the often hefty fees.
For anyone unsure of how to react when the market wobbles, they offer a low-pressure way to check if your portfolio matches your risk tolerance.
Assessing Your Risk
Robo-advisors typically start with a risk assessment, asking investors about their age, income, goals and tolerance for market volatility. Based on the responses, the platforms recommend a portfolio mix.
Conservative investors are usually steered toward bond-heavy allocations, while aggressive investors may see portfolios weighted more heavily in equities. If you want some help in your investing game, here are some of the top robo-advisor platforms that will make investing easier.
- Fidelity Go: Fidelity Go is a simple, low-cost way to start investing. It generates a diversified portfolio based on your goals and comfort with risk, and you can get started with as little as $10. Accounts under $25,000 don’t have advisory fees, while higher balances carry a 0.35% annual fee.
- E*TRADE Core Portfolios: E*TRADE Core Portfolios is all about automated investing with more flexibility. With a $500 minimum and a 0.30% annual advisory fee, it’s ideal for investors who want the convenience of automation but still want some control and tax-smart features baked in.
- Merrill Guided Investing: This option takes a hybrid approach, combining automated portfolio management with access to human advisors. Merrill professionals handle your portfolio, integrating seamlessly with Bank of America accounts.
Staying Calm During Market Dips
Using a robo-advisor during a market dip isn’t about avoiding losses—it’s about understanding your risk and staying aligned with your goals. Emotional reactions often drive bad investment decisions: selling at the bottom, buying impulsively at the top, or constantly tinkering with a portfolio.
A robo-advisor helps you stick to your plan and adjust your portfolio without overthinking it. It’s excellent for beginners or anyone wanting a reality check on risk. It handles the day-to-day work, making market swings less stressful and confusing.
Bottom Line
In short, you don’t have to panic if you’re staring at red numbers today. A robo-advisor can help you determine if your portfolio matches your appetite for risk and guide you toward staying invested in a way that makes sense.