The robots aren't coming.
They're already here.
Robo advisors are taking over the job of old-school investment advisors by helping your average Jane and John balance taxable and retirement investment portfolios. These B2C robots take into account income, risk tolerance, and time horizon, doing the math just like the human counterparts they are replacing. Black box investing (i.e. computer driven decision-making) has been around for decades in the investing world. It works great...until that one exogenous event happens that nobody thought to program into the computer. A zombie apocalypse? A meteor? The election of a reality TV star as president? What? Could happen...
Anyway, it all works, until it doesn't. And then it doesn't work...badly.
Out of B2C robo advisors came the next-gen B2B robo advisors. B2B robo advisors are programs that are incorporated into businesses to provide creepily-fast and unbiased investment strategies and stock trading for those businesses. B2B robo advisors and their trading algorithms allow businesses to pass the savings of man-hours on to their clients. Hopefully these bots don't become self-aware.
Related or Semi-related Video
Finance: What is Efficient Markets Theor...141 Views
Finance a la shmoop what is the efficient markets theory well
there should just be a big picture of Warren Buffett right here it should be [Two men carrying a framed picture of Warren Buffett]
the man Warren explaining the efficient market theory himself and that theory
states that it's impossible to beat the market over a sustained period of time
it should be Warren Buffett who explains that all relevant information comes [Warren Buffett giving a presentation on stage]
public in public stocks and that the market more or less immediately
incorporates all that information in its pricing
hence nobody can ever beat the market over a long period of time so why should [Men falling asleep during a presentation]
Warren Buffett be giving this little definition because the efficient market
theory is wrong Buffett has beaten the market for decades in a row in every way [Warren Buffett beating up the market with a stick]
shape and form so you have a really memorable huge figure in finance this
guy and then pipsqueak professors who are kind of a laughing stock whenever the [Professor jumping on the microphone stand trying to talk]
wealthy power crowds gather in Omaha for their National Convention that's what
they say at the Woodstock of Finance if you will fortunately most people keep [Man with arms folded standing naked in a corridor]
their clothes on for this one
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