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Are Robo-Advisors Warning Of A Late Stage Bull Market?

Tyler Durden's picture


Submitted by Lance Roberts of STA Wealth Management,


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Tue, 06/24/2014 - 19:24 | 4891249 firstdivision
Tue, 06/24/2014 - 19:25 | 4891250 max2205
max2205's picture

Make it stop.....

Tue, 06/24/2014 - 20:49 | 4891456 AccreditedEYE
AccreditedEYE's picture

Just buy yourself a 3x leveraged long index etf and you'll pray clowns like this NEVER stop coming out of the woodwork. Take your profits and buy gold. Can't lose.

Tue, 06/24/2014 - 19:28 | 4891253 TeamDepends
TeamDepends's picture


"Why would anyone pay an advisor and reduce their returns when all one had to do was point-and-click their way to wealth." 

Is this you?  Have you pointed and clicked, only to find out you "clicked too early" according to her?  Well, forget that champ!!  The more things change the more they stay the same.  yadda.....yadda.......yadda.  Be the master of your domain.  With our two step program we cut out the middle man.....  money back guarantee.....(boat full of hot gold-diggers)

Tue, 06/24/2014 - 20:48 | 4891513 NoDebt
NoDebt's picture

The author sounds a bit threatened by these Robo-advisors to me.  

To be honest, most human advisors act more like robo-advisors than they would care to admit.  The amount of automation going on behind the scenes is pretty impressive.  Building an allocation based on Moden Portfolio Theory utilizing either Mean Co-variance or Resampled Efficiency frontiers and then rebalancing quarterly or based on some threshold (which is all that Robo-advisors do, FYI) IS work ideally suited to a computer.

The argument that people want the "human element" and a "shoulder to cry on" is true to some extent but I think somewhere in here the author is whistling past the graveyard.  Much of what human advisors do (or should be doing) CAN BE DONE BY A COMPUTER, just like in so many professions.  This is one area of technology that isn't going to be ratcheting back just because of the next market down-turn.  


Tue, 06/24/2014 - 19:30 | 4891263 DoChenRollingBearing
DoChenRollingBearing's picture

It is very hard to SELL at new highs, but I am going to try and sell some stocks soon.  The above S&P charts are clear enough.



Tue, 06/24/2014 - 19:36 | 4891290 Groundhog Day
Groundhog Day's picture

You are fool if you can't extrapolate the spx returns into next year when the spx will hit 2700.  Selling into the rally is for losers who think too much


Tue, 06/24/2014 - 19:38 | 4891299 fonzannoon
fonzannoon's picture

You are fool if you can't extrapolate the spx returns into next year when the spx will hit 2700.  Selling into the rally is for losers who think too much


fixed it for you

Tue, 06/24/2014 - 20:23 | 4891424 NoDebt
NoDebt's picture

I see what you did there.

Tue, 06/24/2014 - 20:25 | 4891434 buzzsaw99
buzzsaw99's picture

Birinyi ruler, activated.

Tue, 06/24/2014 - 23:05 | 4891964 Bemused Observer
Bemused Observer's picture

Sell into the rally? It's not like it started last month...the bitch has gotten a bit long in the tooth, no?

Tue, 06/24/2014 - 19:45 | 4891317 NOTaREALmerican
NOTaREALmerican's picture

Hmmm...  I like the article.    Perhaps the top won't be "in", tho, until everybody has their own high-frequency trading system (with AI, of course).  

Tue, 06/24/2014 - 19:55 | 4891348 PeeramidIdeologies
PeeramidIdeologies's picture

Lol AI!! Somehow I got to thinking about that the other day, don't like where I ended up. That shit creeps me out.

Tue, 06/24/2014 - 20:26 | 4891442 NoDebt
NoDebt's picture

I want AI in my next phone.  Mostly so it will take calls from my wife during business hours.  Then I realized a simple voice recording will do fine.  "Hi, honey.  Yes.  Uh huh.  OK.  Really?  Uh huh.  Uh huh.  Uh huh.  OK.  All right.  Love you.  Bye."


Wed, 06/25/2014 - 01:56 | 4892225 BringOnTheAsteroid
BringOnTheAsteroid's picture

I think AI might be a bit overkill, just leave ""Hi, honey.  Yes.  Uh huh.  OK.  Really?  Uh huh.  Uh huh.  Uh huh.  OK.  All right.  Love you.  Bye." as your voice mail greeting. Worst case scenario youi get yelled at for not listening but at least you didn't have to take the call.

Tue, 06/24/2014 - 19:52 | 4891337 PeeramidIdeologies
PeeramidIdeologies's picture

Phhhhh, I'm not in on this ride, but if I was, and my portfolio had that golf course look, you know long and green, I'd prolly be takin a seat and keeping an eye on the scenery.

Tue, 06/24/2014 - 20:02 | 4891364 I Write Code
I Write Code's picture

Yellen will tell us when to sell.

Tue, 06/24/2014 - 20:02 | 4891365 juggalo1
juggalo1's picture

I don't buy into all your examples about financial innovation and crashes.  REIT and mutual funds far preceded the crises that you list.  Sure they proliferated during the euphoria period, but the structures themselves far preceded the euphoria.  Also Ponzi was a footnote in the 20s not a factor in the crash.

Tue, 06/24/2014 - 20:11 | 4891390 Bemused Observer
Bemused Observer's picture

" in the 1960's the average hold time for stocks was roughly six years. Today that hold time is from six weeks to six months."

My interpretation of this from a human behavioral POV, is for whatever reason, people lost faith in their stock market, and by extension, their economy. They no longer want to be invested too far in the future. You only postpone gratification now if you are fairly certain it WILL come later. Without that certainty, you take what you can NOW. When you believe in the future, you invest. When you don't, you trade.

Well, however you interpret it, it's not a good sign. If you became aware that someone you loved had lost all faith in their long term future and was living more for today, you would be very concerned.

Tue, 06/24/2014 - 20:33 | 4891463 Squid Viscous
Squid Viscous's picture

Robotrader was ahead of his time...

Tue, 06/24/2014 - 21:15 | 4891602 yellencrash
yellencrash's picture

The final craze will be short ETFs, and the final bubble will be the dollar. 

Wed, 06/25/2014 - 11:11 | 4893379 RabbitOne
RabbitOne's picture

Nice article. However, that is not how I trade or invest. It is all about price and how I define longer term trend (that has been back tested). That has worked for me for the last twenty five of my forty years in these markets. I am still long.

 Defining trend for investments on your longer term charts can be as simple as seeing lower lows violated to go long or higher lows violated to go short. The key is stick with your method.  

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