Sunday, March 04, 2018

Trying a Robo Investment Account

A new investment option I am trying is a Robo Investment account at one of our brokerages.  This account will invest only in ETFs and charge no account fees.  The only fees we will pay are the fees built into the EFTs that are used.   The investment strategy we will be using has a .28% expense ratio for the ETFs.

At this time, I have opened but not yet funded the account.   My plan is to wait for a further decline in the market before funding the account.

My plan is to hold three different types of investment accounts to determine our long term strategy:

  • Actively managed accounts.   We pay a 0.9 to 1.25% wrap fee for actively managed accounts.  The strategies are: Growth, Deep Value, Income with Growth, and Dividend Growth.  The Robo account falls into this category at a much lower expense ratio.
  • Passive Index.   I have several accounts that each have the benchmark indices of the actively managed accounts.  Over time, I will decide whether to keep the managed accounts or the index accounts for the long term.
  • Personal investment strategies.  These are REIT, dividend, and trading/speculation strategies.  I will likely keep doing these on a small scale even after choosing between actively managed accounts and passive indices for the majority of our investments.  Unless, of course, I consistently perform better than these options :-) 
I will likely hold all three types of investment accounts through at least one economic cycle to understand overall performance and volatility.   After that, I plan to start moving funds to the preferred types of investment accounts.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial  or investment advice. Please consult a professional advisor.

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