Chinese tech stocks popular among U.S. investors have tumbled amid the country’s regulatory crackdown on technology firms. WSJ explains some of the new risks investors face when buying shares of companies like Didi or Tencent. Photo Composite: Michelle Inez Simon
The twists and turns of the online brokerage’s path to a public offering The brokerage app Robinhood has transformed retail trading. WSJ explains its rise amidst a series of legal investigations and regulatory challenges as it looks forward to its IPO. Photo illustration: Jacob Reynolds/WSJ
The listing of Coinbase, the largest bitcoin exchange in the U.S., introduces a new way to invest in cryptocurrencies. WSJ explains how Coinbase is trying to distance itself from the risks of bitcoin to succeed on Wall Street. Photo illustration: George Downs
Robo-advisors have had a meteoric rise in popularity since their debut in 2008 thanks to the support from millennials and Gen Z. Today, Robo-advisors manage $460 billion, with some analysts predicting it will become a $1.2 trillion industry by 2024. Watch the video to find out why some investors believe it will never replace traditional human financial.
Since their debut in 2008, robo-advisors have had a meteoric rise in popularity. In 2020, they managed $460 billion, a 30% increase compared with 2019. Some analysts predict robo-advising will become a $1.2 trillion industry by 2024. “Investors historically have had two options when it comes to managing their investments. They could do it themselves through something like an online broker or you can work with a financial advisor,” explained Brian Concannon, head of Digital Advisor at Vanguard.
“Now, with the advent of robo-advisors, there’s a third option, and that’s to merge the benefits of professional money management and advice with the convenience of an all-digital application.” Robo-advisors’ sudden rise to prominence was made possible due to massive interest and support from millennials and Gen Z. According to a recent survey by Vanguard, millennials were twice as likely as young baby boomers to consider using a robo-advisor for investments.
“I believe that there are things that technology or algorithms can do better than humans can,” said Taylor Crane, a robo-advisor customer. “And I have no problem trusting a software to do that.” Skeptics do not expect robo-advisors to replace human advisors entirely in the near future. “Clearly, there’s always going to be a human element that’s missing,” said Jason Snipe, chief investment officer at Odyssey Capital Advisors. “My problem always will be the emotional response. Take a situation like last year when we’re going through Covid-19 and markets are moving a lot, dramatically. …
You can’t talk to the technology, right?” To combat this, many robo-advisor companies including Betterment and Vanguard began providing the option of hybrid services that combine both human and digital advice. “[Some] investors we see crave validation from a financial advisor,” said Concannon. “So for those investors, being able to pick up the phone and have a video conference with a financial advisor, have a discussion about their needs and wants goes an incredibly long way to providing them the peace of mind that they so desperately need.”
Time is on the side of the robo-advisory industry as the technology continues to improve and the younger generations accrue more wealth. “I think some combination of the two probably is where we are headed for in the future,” said Snipe. “I think the robo space has room to grow. I think it will obviously modify and change and become even more sophisticated.”
Since 1980, pensions plans have been phased out in favor of 401(k) plans. They now represent nearly one-fifth of the U.S. retirement market. So how did 401(k) plans become such a popular form of retirement savings and how should they be used? Watch the video to find out.
Following the GameStop trading frenzy, the SEC is expected to take a fresh look at payment for order flow, a decades-old practice that’s at the heart of how commission-free trading works. WSJ explains what it is, and why critics say it’s bad for investors. Illustration: Jacob Reynolds/WSJ
The price of bitcoin is skyrocketing, driving a rally of momentum trading that’s pushed its value higher than it’s ever been before. WSJ explains how bitcoin trading works, and why the volatile digital currency is reaching all-time highs. Illustration: Jacob Reynolds/WSJ
The price of gold is going haywire, driving a frenzy of investment that’s calling into question the metal’s reputation as a safe-haven during times of economic uncertainty.
WSJ Explains. Illustration: Liz Ornitz/WSJ
Tesla’s stock has more than tripled since the start of the year, giving it a market capitalization larger than many behemoths of American industry. But its rise wasn’t necessarily driven by fundamentals. WSJ explains.
Illustration: Jacob Reynolds/WSJ
“To cash in on these long-term trends, we scoured the sector and found eight good opportunities. The stocks we like fall into three broad health care areas: drugmakers, health care service providers, and medical device and equipment manufacturers. Their share prices may continue to bounce around, especially as we near the 2020 elections. Smart investors will buy more when shares dip. “If you have flexibility and you can pick your spots, you can make money,” says Matt Benkendorf, chief investment officer at money management firm Vontobel Quality Growth.”
- Merck (symbol MRK, price $83) is an elder statesman in the pharma world that should continue to thrive in the new order. Keytruda, Merck’s immunotherapy drug that basically gets the immune system to kill cancer cells, is “rapidly becoming one of the largest products we’ve ever seen,” says JPMorgan Chase analyst Christopher Thomas Schott.
- Neurocrine Biosciences (NBIX, $84) is expected to be profitable in 2020. It has two drugs on the market and a strong pipeline of therapies in all stages of development. One of its commercial drugs, Ingrezza, is a “best in class” therapy for tardive dyskinesia, a condition that causes jerky, involuntary face and body movements, says Credit Suisse’s Seigerman. He thinks it could fetch annual sales of $2 billion by the early 2020s.
- CVS Health (CVS, $54) aims to give UnitedHealth a run for its money. It’s best known for its drugstores—70% of people in the U.S. live within three miles of a CVS pharmacy—but it operates more than 1,000 walk-in clinics, too. With its acquisition of Aetna in late 2018, CVS is now also an insurer.
- After spinning off its drug division in 2013, Abbott Laboratories (ABT, $82) now focuses on a diverse roster of products that includes nutritional drinks, diagnostics, generic drugs and medical devices. But a trio of new products put it in the sweet spot of the health care sector’s innovation surge, says William Blair’s Golan.
Read more in Kiplinger’s: https://www.kiplinger.com/article/investing/T052-C000-S002-9-health-care-stocks-for-your-portfolio.html