Editorial Team

Robo-Investing or Self-Managed Trading? Why Not Both?

Retail investing has massively increased in recent years to now account for as much as 25% of all trading volume. This has been driven by reduced costs via commission-free trading, new investment opportunities like cryptocurrencies and ETFs, and ease of access via digital channels (especially mobile).

There has also been a remarkable cultural shift in investing being an obscure and specialized profession of a very few to an everyday hobby for many.

One of the ways consumers have benefited from these changes is the rise of Robo-investing. The venerable Investopedia defines Robo-investing as:

“...digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision.“

These services give consumers control over how much and when they invest, but the actual portfolio is designed and managed for them through the use of technology. This is a radically different model from individual retail investors making their own trades.

Because these two industries have evolved independently there is a tendency for them to be thought of as competitive. But it's not the case that you must choose just one — in fact, you can have both and they are potentially highly complementary to each other. This is the reason Unifimoney supports the Robo- and Self-Managed models, all in one app.

When to use a Robo platform:

  • When you want to auto-invest and avoid the risks of market timing — dollar-cost averaging spreads the risk over time, e.g. on a set day month
  • When you don’t have the time, energy or inclination to do your own market research

When to choose your own trades:

  • When you have strong conviction or when you have a particular interest or insight into an industry or company
  • When you want full control over your investments
  • When you want to invest in alternative assets

Again, this is not an either/or situation — drip-feeding funds into a diversified portfolio each month automatically is a powerful way to ensure that you have the potential to benefit from any long-term market growth. It creates a consistent strategy that avoids market-timing risk and allows you to enjoy the power of compounding interest. We don’t always have the time to spend managing our money and it’s easy to get distracted — automated investing ensures that you are consistently investing, even when you don’t have the time and energy to put in the effort.

Then, there are times when you want to take control and make some trades yourself — especially if it's in alternative assets like crypto or precious metals. Alternative assets, at least currently, are rarely available in Robo portfolios. This will likely change over time but it's where we are today. So, when you want to buy a stake in a specific stock or when you want to diversify via crypto or precious metals, self-managed trading is the way to go.

The two models have evolved separately with distinct players in each market segment. On the Robo-side, you have Wealthfront, Betterment and M1. On the self-managed side, Robinhood has become the giant of equity trading and, for crypto, the choice is often Coinbase. This forces consumers to choose between the models or to have multiple accounts across different providers. The siloing of investment strategies creates friction and extra work for the consumer; it's that work that tends to make us spend less time focusing on managing our money than we should.

With Unifimoney, you really can have your cake and eat it too. And you don’t need more than one app to do so. We believe that Robo- and Self-Managed Trading are complementary and that you should not be forced to have a seperate app for each asset class or product.

Drip feeding contributions into a low-cost diversified portfolio is about as interesting as watching grass grow. But it's a hugely powerful investing strategy over time, unleashing the power of compound growth. It’s not very exciting and a pain to do manually, so we have helped to automate it. Our goal is to make saving and investing as frictionless as spending; we want to erase the all-too-common mistakes of omission that keep people from attaining their wealth goals.

You need to have strong convictions to choose to self-manage your investments. Obviously, none of us have those insights all the time. However, when you do, we’ve made it seamless to act upon them within the Unifimoney app. Curious about alternative assets like Gold and Crypto? You can learn about and buy alternative assets without ever having to download yet another app. We’ve the ultimate investing app, so that you can invest across asset classes without friction. And with Self-Managed and Robo-Investing built into the same account, diversification of strategies and asset classes has never been simpler to achieve.

That's what Unifimoney has been built for. So, sign up for your account today!

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*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.