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Anonymous

20 Feb 2021

Robo-Advisors

Do I need to top up my robo-advisor if I start losing money?

Hi, i am interested to start investing in one of the robo-advisors. If I were to invest $1k, and somehow I start losing money. Do I have to do any top up to match whatever that was invested? Or will it end up as $0 and no additional top up is needed if I give up?

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thefrugalstudent

thefrugalstudent

20 Feb 2021

Founder at thefrugalstudent.com

Hi Anon,

It is the latter - your initial investment amount does not need to be maintained throughout the course of your investment. Realistically, your investment shouldn't reach 0 unless everything you invest in goes bust. However, you could incur a huge loss.

So it's important to make sure that you're only investing money that you can afford to lose in the short run so that you don't put yourself in a bad financial position. This way, you can wait out the market correction for your investments to pick up again before withdrawing them.

Hope this helps and all the best!

Regards,
thefrugalstudent

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