By Jay Mooreland via

Roboadvisors often claim to solve poor investor behavior through their automated way of investing. I have always disagreed, and suggested that investors would not be able to hold on at the next correction – regardless of a Roboadvior platform. In other words, I claim that investor behavior and our biases influence us regardless of the platform we use to invest. We may have some received some evidence of that on Monday.

As you can see from the headline, Roboadvisor websites crashed. Why? Because people were logging in en masse. Why? Well, probably because they wanted to sell. Or in Robo speak, they would change their risk preference to something more conservative…causing the automated program to sell stocks and buy bonds. In other words, these investors were looking to sell.

Perhaps the magic elixir of the Robo platforms is that they crash easy, thus ensuring no investors can make knee-jerk financial decisions. Their technology (breakdown) may have saved many of their investors from making poor decisions. But what if the market keeps going down, wouldn’t they have done a disservice. No!

Click here to read the full story on