We hope you’re wearing your lucky shirt (Robo Investing)

The educational portion of this newsletter focuses on robo investing

What Friday the 13th probably looks like in Italy

Did you know the number 13 is considered lucky in Italy? Maybe that’s what we should all be doing next time Friday the 13th comes around. Or, and this is a hot take, maybe all villains just need a hug.  

As we traverse closer to Thanksgiving, we would like to give our thanks to all of you for being a subscriber to Investing Reimagined!

If you ever want to ask us anything, provide feedback, submit a request or tell us what you usually do to ward off bad luck on Friday the 13th, please feel free to email or DM us on IG or Twitter.

This Week’s Biggest Headlines

  • Pfizer is the likely winner of the world-wide vaccine race. In fact, it’s over 90% effective. It will likely receive emergency authorization from the FDA to begin distributing immediately. This is big news and the stock market has responded with a massive rally, particularly with stocks that have been adversely affected by coronavirus – aka not large-cap tech. We call this a “rotation.” Read more.
  • Markets can’t make up its mind this week. Indices jumped on Monday following the announcement that Joe Biden was our president-elect – coupled with vaccine optimism. However, with President Trump’s refusal to concede, COVID cases hitting record highs and less-than-good jobless claims, the uncertainty has led to markets sliding. Going into Friday, the Dow is up 3%, the Nasdaq is down -0.33% and the S&P 500 is up 1.38% for the week. Read more.
  • Ulta + Target are the latest duo to announce a collab. Both high-performing stocks this year, Target is going to start featuring an Ulta Beauty in-store. The store will have a 1,000 sq ft space dedicated to Ulta products and will be run by Target employees trained by Ulta. Read more.
  • McD’s is McThrilled to announce its newest endeavor, the McPlant.Coming to your nearest McDonald’s in 2021, the McPlant will be its first plant-based burger. There was some confusion regarding who the vendor is – which led to some volatility with Beyond Meat’s stock – because McDonald’s has yet to name its supplier. All signs point to Beyond. Read more.
  • In this week’s episode of Another Antitrust Suit for Amazon… The European Union alleges Amazon has misused customer data gathered from other sellers on the platform to identify popular products to replicate in-house, often selling at lower prices. This is more of the same – even a billion dollar fine feels like a slap on the wrist, so this won’t be the last time we see the E.U. challenging another tech giant. Read more.
  • Is the U.S. ghosting TikTok? ByteDance has had 2 months to figure out who will purchase its U.S. operations, and it has. But the deal was never finalized and Thursday was the deadline. Now, it’s looking like the next administration will handle the final details of the deal. Where does that leave TikTok for now? A strange regulatory purgatory. Read more.
  • Facebook Ad ban continues for another month after the election.Despite making over $3 billion in ad revenue in the last 2 and a half years, Google and Facebook both agreed to ban political ads as a way to control the spread of misinformation regarding election results. It’s unclear when Google will lift the ban, but Facebook has shared that it will continue its ban through December. This is crucial to the two Georgia Senate run-offs in January. Read more.

How “Robos” Work (plot twist, it works for you)


Robos are automated investing software that help investors put their money to work without the aid (and expense) of a human financial advisor. These low-cost, minimal-effort alternatives assess your financial situation and build a portfolio with the ideal asset allocation for your situation. Whether you want to save for retirement, set up a college fund, or just pad your emergency account, their risk-averse approach can generate returns at a relatively low cost.

Robo advisers – also known as robos, automated investing services, or online advisors – are a relatively new invention in the world of investments. These software products have only been around since 2008 – but in just over a decade, they’ve taken the market by storm.

What is a Robo Advisor?

Robo advisors are proprietary algorithms that help individuals invest in the stock market and other financial investments. Dozens of firms offer these products to investors.

Robo advisors may be offered via web platforms or apps (often both). A few offer investment plans that include access to a live financial professional via phone, email, or digital face-to-face communication. 

Robo Advisor Pros

  • Low cost
  • No prior investment knowledge needed
  • Available 24/7 with an internet connection
  • Straightforward strategies
  • Automatic, no-cost portfolio rebalancing
  • Low to no account minimums
  • Indexing strategies typically generate solid returns over time

Robo Advisor Cons

  • Little to no human interaction
  • Fewer investment options
  • Investors may have to open multiple accounts to access all available options
  • You can’t add specific funds or securities to your account
  • Limited financial services to accompany investments

How Do Robo Advisors Work?

  1. Sign up with a robo advisor
  2. Just like a human advisor, you start by answering a series of questions that cover all aspects of your financial life, from your current resources to your future goals
  3. The robo advisor then calculates the best asset allocation for your situation and assigns a target weight and tolerance range to every type of security
  4. Once you start investing, the software will keep your portfolio balanced according to your target allocation (i.e. 60% stocks, 40% bonds)

Many robo advisors recommend that you make small contributions regularly – such as weekly or monthly – to help keep your portfolio balanced. It may also offer other services to keep you and your account in good standing, including financial planning tools and access to a human representative.

Investment Options

Robo advisors typically gravitate toward ETFs and mutual funds when building investors’ portfolios. These passive investments follow modern portfolio theory, which emphasizes the benefits of a diverse portfolio to minimize risk.

Some robo advisors also let you specify investments by other criteria, such as:

  • Market cap
  • Industry
  • Socially responsible investments
  • Religious views
  • Personal preference

Tax Considerations
You’ll receive a 1099 form to fill out every year. Here, you’ll report all eligible interest, dividends, and capital gains on which you’ll have to pay taxes.

SEC Regulation
Legally, robos and human advisors are considered “Registered Investment Advisors.” Both are subject to the same securities laws, and must register with the U.S. Securities and Exchange Commission.

How Much Do Robo Advisors Cost?

Some robo investing advisors are 100% free for their clients. For instance, Schwab offers a full range of robo advisor services at no cost to their investors. Instead, the company receives compensation for referring accounts to their proprietary ETFs and cash features.

However, most robo advisors do charge fees via one of two payment structures:

  1. Fixed fees are charged monthly and range from $1 to $10 per month or more
  2. Percentage fees are charged monthly, semi-annually, or annually based on the amount of assets under management (AUM); these can range from 0.15% to 0.50%.

Rather than paying commissions to buy and sell investments when you rebalance your portfolio, robo advisors often waive these fees.

The Bottom Line?

Robos have gained in popularity for several reasons. In fact, by the end of 2020, some models predict that robo advisors will collectively have between $1 trillion and $2.5 trillion under management. 

Some investors like the ability to be mostly hands-off while paying a lower cost than traditional advisors. Others don’t have the capital to dive headfirst into the market, but still want to build a low-risk investment portfolio. If you enjoy a hands off approach, robo advisors are a good choice. 

Investment banking is a real-life Wolf of Wall Street, right? Not quite. Investment banking has a storied history and it’s not always been glamorous. It sort of still isn’t! This video explains the history of the profession, how it got its reputation, and why it isn’t going anywhere anytime soon.