![]() This takes the onus of deciding where and how to invest off your shoulders. The robo-advisor decides how to invest your money and allocate your assets based on your self-identified risk tolerance, financial goals, and time horizon.The three big advantages of robo-advisors are: Robo-advisors use algorithms to automatically manage an investment portfolio, usually comprised of ETFs (see ‘Types of Stocks to Invest In’ below). But if you’re just learning the ins and outs of the market, it’s best to start investing with a robo-advisor rather than jumping headfirst into investing independently. You should be! The sooner you start investing the more you’ll earn over time. It’s a good sign that you’re anxious to invest. Step 2: Dip Your Toes in with a Robo-Advisor In general, younger people have a longer investment runway and can usually afford to take on more risk than those closer to retirement. People say, “I have a high tolerance for risk.” What they actually mean is, “I have a high tolerance for making a lot of money, fast.” They are not the same thing. ![]() Now ask yourself: Why am I investing in stocks? Is it to fund a child’s education? For a mortgage down payment? Saving for retirement? Just for fun? Identifying your personal financial goals lays the groundwork for investing, because it determines how much you’ll need to invest and how high or low your risk tolerance is. If you have funds for the first two buckets in place, the funds in the 3 rd bucket can then be directed toward investing in stocks.
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