Robo-advisors and automated investing

What a robo-advisor actually is

A robo-advisor is a digital platform that builds and manages an investment portfolio for you using an algorithm rather than a human advisor sitting across a desk. It typically starts with a short questionnaire about your goals, timeline, and comfort with risk, then automatically invests your money into a pre-built mix of funds, usually ETFs or index funds, matched to your answers, with no need to select a single security yourself. Under the hood, the algorithm usually leans on ideas from modern portfolio theory, the same academic framework behind ordinary diversified investing, to decide roughly how much should sit in stocks versus bonds for a given risk level.