Can Automated Investing Take the Stress Out of Investing?

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There is no question that investing is stressful for many people. For one thing, it takes a fair degree of research and expertise to invest knowledgeably and to make educated decisions. Plus, to ensure the right investment allocations, you have to keep an eye on your portfolio through the years and through life changes such as marriage and having children. Add high management fees and high minimums into the mix, and, yeah, investing can be extremely stressful.

Fortunately, companies such as Ally Invest, formerly TradeKing Advisors,  make investing easier and less nerve wracking. However, the services and requirements of robo-advisors, also called automated investors, vary, so always check what is offered and for how much.

As Little Involvement As You Want

One way in which automated investing is less stressful: you can be a hands-off investor. True, you can be hands-off anyway as long as you have an investment manager. These folks tend to charge high fees and have hefty minimums, though. If you are a hands-on type or want to be later, some robo-advisors let you take more control of your investments.

Lower Fees

Speaking of fees, you should expect to pay fewer fees with automated investing. Management fees typically fall under 1 percent, and some services manage your investments for free when they fall under a certain amount. Conversely, some services charge less as you increase your investment amounts. In any case, lower fees save more money upfront, and if you apply that saved money to your investments, then you may reap even more rewards.

Less Chance of Bias

Robo-advisors do not have personal issues to worry about. They look at the numbers, do some crunching and come up with logical decisions. On the other hand, human investment managers have a vested interest in making more money, and some are more ethical than others. And if you manage your own investments? You worry about timing, when to buy, when to trade, when to rebalance and so on. Robo advisors can keep you from making bad mistakes. They certainly take a lot of stress and complication out of the equation.

Lower Minimums, More Choices

Some robo-adviser services do not even require minimum balances to get started. Those that do require minimums typically ask for no more than several thousand dollars. Compare this with human managers, for whom minimums in the six figures are common. Lower minimums make investing more fun and accessible, and they offer more choices to everyone.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Versus Reviews. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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