It wasn’t long ago that, for the layperson, investment automation seemed reserved for hedge funds and investment banks—monoliths of the investing world that play the numbers with analytics to gain an advantage penny upon penny. If you simply had a casual interest in stocks, the state of affairs wasn’t very encouraging. Big players stood to make a whole lot more than you from a wide variety and volume of investments, as well as lightning-fast, automated trades.
But now things are different. This summer’s news about robo-investing paints a picture of where we are now with big data and investing:
Betterment, the original robo-advisor, has some 300,000 users and is valued at over $800 million
Robo-analysts are able to pore over reams of data in financial statements, saving a great deal of time for funds managers and other decision-makers, who can then use the analyses to make stock-buying decisions
Anyone can use robo-advisors from fintech companies or banks to manage their portfolio
Fintech robo-advisors are competing with banks, but banks’ robo-advisors may face conflicts of interest in their recommendations, because their algorithms are skewed to prefer companies that pay the banks for marketing
Robo-investing is blowing the door open on a whole new level of trade. Because …