facebookWhat does it mean when you invest more in robo advisors during this economic downfall? Does it also mean that you are buying cheaper stocks and more units of stocks? - Seedly

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Anonymous

13 Mar 2020

Robo-Advisors

What does it mean when you invest more in robo advisors during this economic downfall? Does it also mean that you are buying cheaper stocks and more units of stocks?

What would pouring more money into my Robo-Advisors portfolio during this downturn entail?

Discussion (1)

What are your thoughts?

Pang Zhe Liang

Pang Zhe Liang

13 Mar 2020

Level 14·Senior Financial Services Consultant at AIA Singapore Private Limited

This is likely based on the concept of dollar cost averaging.

In essence, you keep your capital the same. When the price of an asset drop, you are able to purchase more units.

More Details:

Dollar Cost Averaging

However, take note that in order for dollar cost averaging to work, it is assumed that the asset value will rise eventually (Example 3). Otherwise, you will end up losing more money over time (Example 1).

I share content on estate planning and financial planning here.

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