Maximizing Your Returns: How to Use Automated Investing Platforms Like a Pro

Automated investing, often referred to as robo-advising, is revolutionizing how people invest. These platforms use algorithms and technology to manage your investments automatically, making it easier than ever to grow wealth without needing deep financial knowledge or constant monitoring. In 2025, automated investing is more accessible than ever, and if you’re looking to maximize your returns while minimizing your effort, it’s time to learn how to make the most of these tools. Let’s dive into how you can use automated investing platforms like a pro.

What Is Automated Investing?

Automated investing is the use of algorithms to manage your portfolio based on your financial goals, risk tolerance, and other preferences. Robo-advisors like Betterment, Wealthfront, and Ellevest offer personalized investment strategies that help you invest in stocks, bonds, and other assets automatically. These platforms use advanced technology to create and maintain diversified portfolios on your behalf.

Why Use Automated Investing?

1. Low Fees: Robo-advisors typically charge much lower fees than traditional financial advisors. This means more of your money goes toward growing your investment rather than paying for advice.
2. Convenience: Automated investing platforms handle everything for you—from portfolio management to rebalancing and tax-loss harvesting—so you don’t have to worry about the details.
3. Personalization: Many platforms customize your portfolio based on your financial situation, goals, and risk profile, offering a tailored investment experience.
4. Time Savings: Once set up, automated investing requires very little input, giving you more time to focus on other things while your money works for you.

How to Get Started with Automated Investing

1. Choose the Right Robo-Advisor for You

There are many robo-advisors available, and choosing the right one depends on your investment needs, goals, and preferences. Some platforms cater to specific niches, like socially responsible investing or ethical funds, while others are more general.

• Actionable Tip: Compare platforms based on factors like fees, investment strategies, account types, and ease of use. For example, Betterment is known for its low fees and automated tax-loss harvesting, while Wealthfront offers an advanced tax strategy called "tax-coordinated portfolio."

2. Define Your Financial Goals and Risk Tolerance

When you sign up for an automated investing platform, you’ll be asked to fill out a questionnaire. This questionnaire will assess your financial goals (e.g., retirement, buying a home, or building wealth) and your risk tolerance. Your responses will guide the platform in creating a diversified portfolio that’s right for you.

• Actionable Tip: Be honest about your risk tolerance. If you’re risk-averse, you’ll likely be placed in a more conservative portfolio with bonds and stable investments. If you’re comfortable with risk, your portfolio may lean more toward stocks, which have a higher potential for growth but also come with more volatility.

3. Set Up Automatic Contributions

One of the key benefits of automated investing is its ability to make regular contributions to your portfolio without your involvement. Setting up automatic contributions can help you take advantage of dollar-cost averaging—investing a fixed amount at regular intervals—thereby reducing the risk of market timing.

• Actionable Tip: Set up automatic contributions that align with your budget and financial goals. Even small, regular deposits can add up over time, especially with the compounding effect.

4. Let the Platform Rebalance Your Portfolio for You

A major benefit of automated investing platforms is their ability to rebalance your portfolio automatically. Rebalancing involves adjusting the mix of assets in your portfolio to maintain your desired risk level. As the value of your investments change, rebalancing helps keep your portfolio aligned with your financial goals.

• Actionable Tip: Regularly check your portfolio to make sure the robo-advisor is properly rebalancing. Some platforms, like Wealthfront, will automatically do this on your behalf, keeping your risk levels consistent without any additional effort from you.

5. Take Advantage of Tax Optimization Features

Many robo-advisors now offer tax optimization features like tax-loss harvesting, which can help minimize your taxable gains. This is a great way to maximize returns, especially in a taxable account.

• Actionable Tip: Look for platforms that offer tax-loss harvesting and other tax strategies to ensure you’re minimizing taxes on your investment gains.

Final Thoughts: Is Automated Investing Right for You?

Automated investing platforms are ideal for anyone looking for a hands-off investment strategy that still offers solid returns. They’re especially helpful for beginners or anyone who doesn’t have the time to manage their investments regularly. By choosing the right robo-advisor, defining your goals, and setting up automatic contributions, you can take full advantage of this efficient and low-cost investment method.

Have you tried automated investing? How has it worked for you? Let us know your experiences in the comments!

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