Understanding Robo Advisor
Robo advisor is a digital platform that helps users manage various types of services and financial plans. This robo advisor is created through sophisticated algorithm programming technology and can provide personalized solutions to find the best program according to the data entered by the customer's investment platform.
In terms of investment, robo advisors function as technology that helps design optimal investment portfolios based on risk profiles and financial goals automatically. Through the robo advisor, potential investors or investors do not need to worry because the robo advisor will automatically create an investment portfolio that suits customer needs using an algorithm. This algorithm works based on data that has been inputted into the system. From this data, the robo advisor will make appropriate portfolio decisions.
Stages and How Robo Advisor Works
In general, robo advisors have three basic work systems to help customers, namely:
- - Auto Risk Profiling
The customer must answer the selected question or survey in order to determine your risk profile with an unbiased algorithm.
- - Auto Financial Plan
Robo advisor will provide investment portfolio allocation according to your answer.
- - Auto Rebalancing
Maintain your optimal allocation with changing markets to reduce the risk to your investment as much as possible.
If described, then the following are the steps that must be taken by customers who want to use robo advisor technology:
- 1. Filling Questions online
The first step is that you have to answer several questions so that the robo advisor system can find out the risk profile. It is very important to know the investment portfolio that suits your needs.
- 2. Creating an Account to Start Investing
After filling in the risk profile questions, the next step is to create an account with the robo advisor company you choose to store the funds to be invested. The account can then be accessed automatically by the robo advisor.
- 3. The collected data is processed by robo advisor
The risk profile data that has been obtained from you when filling out the survey will be automatically processed by the robo advisor.
- 4. Robo Advisor Recommends Suitable Portfolios
After processing the data, the robo advisor will provide several suitable portfolio recommendations to customers. Then you can automatically buy the recommended investment products.
- 5. Balancing portfolio
Investment returns may fluctuate. If your investment returns are not evenly distributed, the proportion in your investment portfolio will also change. That's why the robo advisor will automatically monitor and balance the portfolio on a regular basis, so that it not only optimizes profits but also minimizes risk.
Platform Robo Advisor
You can try various platforms that provide robo advisors, namely:
- - Seeds
This mutual fund investment startup has a robo advisor service to analyze portfolios. Suitable for both beginners and professionals.
- - Stockbit
Stockbit is a stock investment service that has a robo advisor feature so that it can analyze users' stock investments.
- - Bareksa
An integrated financial and investment marketplace that has an official license as a mutual fund selling agent (APERD) and also OJK since 2016. Bareksa helps users invest with the right strategy.
- - Bamboo
This Singapore-based startup develops wealth management solutions. Bamboo's Robo advisor can help optimize the process of financial planning, savings and investment
- - Halofina
Is an application that aims to be your personal financial assistant. Halofina provides robo advisor and goal based investment features to manage your finances.
Advantages of Robo Advisor
The following are the advantages that you will get when using a robo advisor, namely:
- Cheaper Cost
Robo advisor charges a fee based on a percentage of assets, usually around 0.15% to 0.5% of all investment assets owned. This cost is relatively cheap because the company does not need to provide labor to serve investors directly.
- Easing Investment Activities
Using a robo advisor can help you not have to constantly monitor changes to your portfolio because this task will be carried out by the robo advisor.
- More Efficient and Practical
The use of a robo advisor is more efficient and practical than using the services of a financial advisor that you have to contact, and the fees are more expensive. Meanwhile, robo advisors can be done only online anytime and anywhere.
- More Targeted Portfolio Recommendations
This portfolio is more targeted because it is based on the surveys you fill out. This makes recommendations from robo advisors safer and more profitable.
Read Also: What is stock ARA, Limits & Benefits for Investors
In the world of stock investing, you will meet a variety of new terms that you may have just heard. You need to know these terms so that in stock investing activities it will be easier to understand them. One of the terms that often exist in stock investment is ARA and ARB.
This term in the stock world has a very close relationship with the volatile nature of the stock. Sometimes the company's shares experience ARA but could experience ARB the next day. Then what is ARA & ARB? Here's the explanation.
What is a Stock ARA?
ARA Shares is an abbreviation of auto rejection above which means that the trading mechanism applies to the Indonesian stock exchange. The implementation of this system is carried out through the Jakarta Automated Trading System (JATS) next-G which has a function to serve stock and securities trading.
This system can handle every request to buy and sell shares even though when the stock reaches a certain price the system will reject it automatically. This phenomenon is known as ARA. The term ARA is when the selling price of shares exceeds the paper limit that has been set.
Stock ARA Limit
The determination of the upper limit in the form of a percentage of Bi has set limits on the ARA of shares by considering the selling price, namely:
Reference stock price ARA value
IDR 50 – IDR 200 > 35%
> IDR 200 – IDR 5000 > 25%
> IDR 5000 > 20%
To be able to find out the ARA, you just need to see if the stock has a sell queue order or not. For example, if the price of the Samsung A10 yesterday was IDR 3,000, then based on the IDX rules, the ARA value of the stock is 25%. So in this condition the JATS NEXT -G system will calculate the ARA of the stock for today's trade.
Understanding Stock ARB
Stock ARB is the lower auto rejection that is used to determine the minimum limit for decreasing the price of a stock. So when the stock value has reached ARB, the system will reject all purchase orders. Under normal conditions, the IDX determines the ARB value ranging from 20% to 35%. For example, when company a was sold for Rp. 5,000 at the close of the stock exchange yesterday, the arb limit was 7%. That way the business has an ARB of IDR 4,650 and if there is a decrease in price at that point, the system will automatically reject the purchase order.
ARA Stock Benefits
Benefits for Investors
The benefits of direction can be felt by investors or traders will benefit when he buys shares within the lower limit and then sells them again when the price is at the upper limit. You can feel this benefit for those who already have the ability to analyze and determine strategies in the stock market. The presence of the ARA and ARB systems on stocks will be seen by their ability to provide guarantees to traders so that they get shares at normal prices and in a predetermined period.
Benefits for the Company
ARA shares also have benefits for the company, namely the value of the shares will be protected. For ARA shares, the benefit is that it can prevent extreme equal values so that this can cause losses for the company. Therefore this system can minimize these losses.
Things to Pay Attention to Before Buying ARA Shares
Comparative Analysis of Bargain Price and Fair Price
Price is one of the considerations in choosing issuers. You can adjust to the budget you have and find out to compare a reasonable price in buying shares. To help, you can find out what is the fair price or a certain discount from the issuer so that you can do a short calculation of the BVPS value or Book Value Per Share of each share.
Find out the Market Cap Size of Interested Issuers
You can find out the size of the market cap of the stock you are after. Market cap is the market capitalization that shows the amount of funds that need to be issued if you want to buy all shares of a company. The bigger the market cap of a company, the better its fundamentals will be. Generally, companies with large markets are classified as advanced and developing when they are in the first liner or blue chip line.
The level of a company's ability to generate profits
Another thing you need to pay attention to is to see how high the level of the company's ability to generate stock profits is.
The benefits of investing in stocks can be in the form of capital gains or dividends. However, not all companies distribute dividends in a structured manner to their investors, therefore it is better to do research on a stock before buying it.
Know the Company's Future Prospects
You need to be in the future You need to see the prospects and opportunities of a company How in the future. Stocks that have long-term prospects and are in accordance with investment objectives. Instead you need to consider stocks that do not have these prospects and are not in accordance with investment objectives.
Stock Fluctuation Analysis
Before you buy shares that are affected by ARA, you should also check the status of stock fluctuations periodically. Generally, stocks affected by Ara are in demand by investors because they can quickly analyze all changes. Then you can check what factors affect the increase and decrease in stock prices such as political economic conditions and others.
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