“Robot Invasion” Makes Reliable Income Easier Than Ever
Robots first threatened your job…
Then they made their way into your home…
And now they’re largely in control of our financial markets.
It seems like a scene straight out of Terminator — robots taking over our world.
But it’s not quite the nightmare you might think.
In fact, this robot invasion couldn’t have seeped into the bond market at a better time…
Because these “robots” are now allowing investors like us to more easily invest in one of the most underutilized markets for retirement planning.
Let me explain…
Bonds Are Boring, Right?
Before we get into bond bots, let me backtrack a bit.
What even is a bond?
Simply put, a bond is a loan. When you purchase a bond, you’re loaning out a specific amount of money to a company or government.
These loans are typically sold in $1,000 increments and range between 5 and 20 years to maturity.
During the time that you hold the bond, the borrower (usually a company or government) pays you fixed, semi-annual interest payments for letting them use your money. And when the bond matures, they will pay you back the original $1,000 that you lent them.
It’s a reliable income stream… yet it’s an area of the market often underappreciated by investors.
The reasoning here is twofold:
First, bonds are likely seen as “boring” to most investors. While stocks have the potential to skyrocket higher, bonds don’t deviate much from their $1,000 value.
And because you’re sitting tight for years before your money is returned to you, waiting out a bond seems about as exciting as watching grass grow.
Second, the lack of online transparency (as compared to the stock market) makes the bond market difficult to understand.
Think of how easy it is to trade shares of stock. At any given time, you can easily buy or sell shares of stock with the click of a mouse, and you can probably figure out why a particular stock traded higher or lower on any specific day.
But that same transparency is just not there in the bond market.
In fact, while most stock trades are done online, almost all bond trades are still done over the phone, and require manual steps that aren’t needed for a quick stock trade.
That not only makes it harder to understand the bond you’re buying or selling, but also costlier to execute any one trade.
All of which keep investors out of bonds entirely. But not for long…
Bond-trading bots are here and they’re changing the bond market just in time.
Here’s What Bond Robots Mean for Your Retirement
Bots are the key to unlocking the bond market for Main Street investors like me and you.
These machines are run by the big banks on Wall Street, and are designed to help facilitate the back and forth trading of bonds… better than their human counterparts.
By analyzing millions of data points a day, these robots buy and sell bonds faster than the blink of an eye… over and over again.
This allows them to “discover” the prices of bonds much quicker than your typical broker can.
This technology has been around in the stock market for decades. But it’s just now coming to the larger and more complex bond market.
So what does this mean for you?
In short, the bond market is about to become a whole lot more efficient.
No longer will you have to call your broker for the most up-to-date prices on your bonds. And no longer will you get stuck with a hefty transaction fee every time you place a buy or sell order.
Instead, as these “robots” become more prevalent in the bond market, you’ll be able to buy and sell bonds at the prices that are quoted and at the click of a mouse.
This will allow you to take full advantage of the reliable income streams that bonds have to offer, without all the question marks that surrounded them in the past.
Here’s to growing and protecting your wealth!