Automated Investing

Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk.

For example, say an original target asset allocation was 50% stocks and 50% bonds. If the stocks performed well during the period, it could have increased the stock weighting of the portfolio to 70%. The investor may then decide to sell some stocks and buy bonds to get the portfolio back to the original target allocation of 50/50.

Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon. The three main asset classes—equities, fixed-income, and cash and equivalents—have different levels of risk and return, so each will behave differently over time.

The modern portfolio theory (MPT) is a practical method for selecting
investments in order to maximize their overall returns within an acceptable level of risk.

Passive investing is an investment strategy to maximize returns by minimizing buying and selling. Index investing in one common passive investing strategy whereby investors purchase a representative benchmark, such as the S&P 500 index, and hold it over a long time horizon.

Active investing refers to an investment strategy that involves ongoing buying and selling activity by the investor. Active investors purchase investments and continuously monitor their activity to exploit profitable conditions.

Fuzzy Logic is a non-binary approach to computer logic not based on true or false conclusions. Rather, it is an approach to computing based on a series of variables that attempts to mimic human reasoning and result in a more accurate conclusion.

A neural network is a series of algorithms that are designed to mimic the way a human brain works. The neural network is able to adapt to changing input and can, therefore, produce useful results without the need for the underlying criteria to be changed as the input changes.