How does Robot Editing work in investments? Spoiler: just
I am the editor of this blog and I am rather lazy.
By the age of twenty-six, I began to think about where to invest free money in order to get even more money. The Internet is full of sports betting (everyone has a name in their head), binary options and all that. But, of course, this is all wrong.
On the other hand, you can invest in currencies, securities or mutual funds. Some guys write walkthroughs on how to do this, but they break about the first fact about me. The truth is that for this you need to do just a bunch of things. And I'm lazy.
There is also a sort of Robo-Editors - services that, for a small commission, magically do everything themselves. I won my laziness for a while and decided to understand how they work.
Disclaimer: there is no universal advice on where and how to invest. Everyone has his own attitude to risk, earns a different amount of money and wants to make a profit at a different time. Simply put, someone needs to save up for a new iPhone before the next WWDC, and someone slowly collects it in a house in the suburbs, and he is fine. This article is about Robot Editing, not about Universal Recipes for Success From a Lazy Guru.
Trust but check
Trust management is when you transfer your money to a company that invests them somewhere and follows the process, plus or minus. If you completely exaggerate, then some Veniamin comes to the office to the financial manager and answers questions about recent events in life, the health of relatives and various other things. Based on the answers, the manager can imagine how Benjamin treats the risk and decide how to distribute his money. And then he distributes them - Benjamin is happy, the manager has earned, life is beautiful. Here it is also important that individual fiduciary management usually begins with several million rubles, and for all the rest typical strategies are offered.
So, the manager, as well as any person, is subject to influence and changes in mood. On the way to the office, he heard on a special financial radio program about the impending catastrophe of the Chinese stock market. And he decided that it was not necessary to invest anything in China. And the presenter of the program simply does not like China, because yesterday they sent him a defective phone from an online store. So errors happen and accumulate, nothing can be done.
Investments are associated with risk, and for an investment service it is important how each particular user treats it. If you invest in high-risk assets, you can get more income, but the chance to face losses will also be higher.
Human Factor Protection
To avoid situations like Benjamin, you need to remove the human factor from the whole process.
If you remove the interlocutor from the chair opposite, Benjamin will have no one to tell about the health of his beloved doggie. Instead of an adviser, a form will appear on the site where you can answer almost the same questions and automatically receive initial recommendations on what you need to buy. They will have to go to the broker and do everything that the management company does - only on their own.
If you take away these exciting adventures from Benjamin, you’ll get a robot manager - they automatically make up an investment portfolio (a list of assets that are better to buy), buy and monitor it. Everything is tied to mathematical models and advanced statistics - a person does not intervene.
Where did the computer recommendations come from?
The first robot editors appeared in the USA immediately after the crisis ten years ago. Then the clients became disillusioned with advisers who needed to pay a lot in the hope of saving their savings. Over time, the savings became less and less, and the advisers did not save.
In such a model of the world, ten people who make decisions and buy and sell tools are replaced by a computer. The risk is reduced that Benjamin will be sold wrong and wrong, because the smart algorithm will choose the optimal portfolio on its own. You can always ask the client again whether he accepts specific conditions and is willing to take risks. And all the key conditions are transparent at all stages, and the costs are directly indicated - so the risk of Benjamin’s disorder becomes even smaller.
An attentive reader will ask - why don't the robot editors look at me from every banner, if everything is so simple and wonderful?
The point is security and laws - it is difficult to develop such a service so that it is well integrated into banking systems and takes into account all the requirements of state regulators. Therefore, for example, American and British robo editors do not work anywhere except in the USA and the UK. Most likely, to run in another country, they would have to restructure the entire process.
Our personal grade of robot manager
Until recently, in Russia there was nothing like that. And then Yandex.Money, together with FinEx, launched their microinvestment service - it is called Yammi . Under the hood, he has just a robot manager (and an orange cat on the hood). You need to log in, fill out a form, specify a phone number and it will work. It will remain to transfer money to an investment account, and then the service will automatically offer the best portfolio and buy everything you need.
See, and really on the hood
It is important - micro-investments are in no way connected with microfinance organizations. If you are offered to take twenty thousand to the salary at 70% per day - this is not microinvestment, but robbery, do not confuse.
What happens immediately after registration:
- The client opens an investment account and transfers money. If you do not, you can only look at the demo portfolio.
- All clients' money received during the day are combined into one order, on which transactions are executed on the exchange.
- Information about transactions enters the accounting system Yammi.
- The computer examines the transactions of each client, and instead of money in his personal account appears investment portfolio.
After about a quarter, statistical information is updated, on the basis of which the portfolio can be rebalanced - change the ratio of stocks and bonds. You can also re-answer questions from the questionnaire about the risk - this can also affect the result. As a result, for each portfolio computer solves the problem again. If people did this, it would have turned out rather slowly and inaccurately.
Not everything is glittering
It is easy to think that all roboedvizing consists only in mathematics, over which the weights of assets are distributed and the portfolio is rebalanced. In fact, 90% of the work in the automation of everything: the transfer of money, transfers and transactions on the exchange. And yet, as I wrote above, you need to comply with the law.
FinEx colleagues identify nine signs of a real robot manager - one where all the automation is done honestly and everything is done according to the law. Read meditative recitative:
The robot manager should have:
Investing through individual selection of an optimal portfolio of assets. If, for example, they offer to choose from ready-made sets of portfolios, then there is probably no “robo” in the service.
The composition of the portfolios - index funds with minimal cost (ETF). If the portfolio is made up of individual stocks, then it is time to think about why you are offered to take additional risk - attempts to beat the passive index of the road, and most importantly, very rarely lead to success.
Risk profiling on the questionnaire, which is written according to international standards. The questionnaire is important to understand how a customer will behave when the market is stormy. If this is difficult, it is better to abandon profitability above the market.
High portfolio liquidity. Everything is simple - low liquidity - a guarantee of ineffective rebalances when it is needed.
Exhale, look at the cat. Continue
Legal registration services. It is important to understand whether the service provider is responsible for its work and whether it should put your interests above its own.
The ability to open / close a portfolio without penalties. Different things happen in life, and sometimes you need to get money without delay.
The company is responsible for the selection of the portfolio. It is important to know who is responsible for what and what is responsible.
Remote portfolio formation. Convenience, without which the "robo" can not be.
Automatic rebalancing. If you are required to confirm or verify something, it means that the provider transfers responsibility to you.
What is under the hood of Yammy?
Two clouds - closed and open.
Both are built from scratch and specifically for this service. In the closed part of the cloud is the entire automatic back office and part of the API. Back office is an external solution that is 99% adapted to Yammi. The core rebalancer is made entirely within the company - due to the unique features of this particular robot manager. Yammy has an open methodology - if you read, you can theoretically repeat everything they did.
Interaction with Yandex.Money
Work with users and money transfers are built using Yandex.Cashy technologies. The Yammi service obeys 115-FZ , therefore, it cannot accept money like ordinary merchants bypassing bank accounts.
From this several facts follow:
- Money is accepted only from the identified wallets in Yandex.Money.
- You can withdraw money only to the identified wallet.
- All data from the wallet is checked against the questionnaire that a person fills in when registering with Yammi. If the transfer information does not match, then Yammi can not accept payment.
Because of the need for regulation and transfers through the bank, payments from customers do not come instantly. The conclusion is the same - you can close the account or withdraw money partially, but the process is long - at the beginning there is no money on the account, but there are securities. FinEx has to sell them, transfer them to the Yandex.Money account, and we already return them to the person’s wallet. It turns out that the minimum refund time is three days.
And the result is what?
Microinvestment is a good thing if used correctly. For example, Yammi takes 3 rubles 25 kopecks for each day of using the service, or 1.5% per annum of the value of assets, so that you invest 5,000 rubles once, and in a year you cannot receive it a hundred times more. Such services are aimed at discipline - it will be more appropriate to periodically invest in order to get a regular exhaust.
I don’t know, really, how this correlates with my laziness - only time will tell.