- Determine the target asset mix, which could change depending on market conditions.
- Re-balance if:
- The asset mix weights moves more than a certain percentage, e.g. 10%, from the target weight; or
- Periodically, such on an annual basis These are all sensible rules that have long been practiced in the investment industry. In essence, the strategy involves taking profits on winning asset classes and averaging down on losers as a form of risk-control discipline
While the basic business model of the robo-advisor remains unchanged, I can see a couple of competitive threats to the standalone robo model. In fact, these threats may spell a peak of the standalone robo-advisor.
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