With the rise of robo-advisors and index funds, more investors are turning to automated investing strategies, also known as investing on autopilot. This approach has definite advantages – it’s low cost, requires little effort, and can produce solid long-term returns. However, it also has downsides – you give up control, it lacks customization, and works best for passive investors. In this article we’ll explore the pros and cons of autopilot investing in depth.
Autopilot investing provides simplicity and low costs
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You lose flexibility and control with index funds
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Automated rebalancing keeps your asset allocation on track
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Tax-loss harvesting can boost returns for index investors
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In summary, autopilot investing strategies like robo-advisors and index funds offer simplicity, low costs, and solid long-term returns for passive investors. However, they lack flexibility and active trading options. Overall, investing on autopilot works well for hands-off investors comfortable with just matching the broader market.