[MUSIC] Hello everyone, this is my very last video. I haven't counted them but probably I've done closed to out 100 for this whole specialization. It's been a lot of fun, I must say. Last video, so I decided to change look [LAUGH] and be a bit more casual and forget about those striped shirts. And also, going to talk about the latest game in town, and these are robots. Robot advisor, we just saw by looking at big data that it can be helpful in helping you devising a tactical asset allocation. Robots to do tactical Asset Allocation, I would not feel that confident, but certainly to do the strategic asset allocation, yes. Why not? It's a bit like when you look at these two pictures, the shuttle here, this is a picture taken from Detroit Airport. You see the shuttle and it probably drives [LAUGH] the passengers to their destination without a driver, right so perfectly automated robot, no problem. Would you feel comfortable knowing that there's no pilot in this big airplane in the? Well, it's a bit the same, when you're doing strategic aster location, the guidelines are pretty strict, straightforward. It's like the shuttle in the airport, simple. When you're driving an airplane, you may be subject to some difficult situation, and I'm not sure the robot would do a perfect job. So what are the pros of Robo-advisors? Well certainly, costs, we've talked in this course about cost when active, considering active or passive funds. That's certainly something also to consider when you should allocate your money to a Robo-advisor. A big pro, a big advantage of the automated Robo-advisors is the fact that they will take the portfolio rebalancing, they will take care of that for you. You will not have to do it. Basically, if you've set that your allocation to risky assets, equities should be 25%. And if equity is perform well and that bucket grows to 30%, the robo will rebalance to 25% automatically, you will not have to do it. Also, it may be worth considering in some cases, like the US, you will be subject to taxes on your capital gains, so the robot here might help in doing some optimal selling. He will sell the losers to offset the gains you have made on your winning stocks, so as to minimize the capital enhance the tax incidents. Also, it's quite clear that robot, as far as I know, maybe a wrong and that maybe they also have emotions [LAUGH]. Maybe the guys is devising the robot is also plugging in some emotional behavior in these robot. But, we can say, is that a plus? I don't know. Probably yes, the answer is yes. That they are not subject to emotional behavior. But last but not least, I think we should not forget that robot are perfectly suited for I would say non-complex pretty standard situation. And typically, that of devising a strategic asset allocation. What are the cons? Well, typically, if the situation is more complex if we have to is like the big airplane going through a tempest may require here some fine tunings, maybe not. But perfectly suited for a robot. Talking about investments, we live now in a more complex world both because interest rates are low, so there are no more risk free assets. We have to work with this constraint and hence its becoming a bit more complex in terms of diversification. There's also increased regulations; differing from one country to another. So, here too this makes the situation a bit more complicated for robot to act perfectly. Again, here emotions, integration of emotions maybe helpful for you to better understand the markets. And we've seen that when we talked about Euro finance this is also a lot of the latest trends on which we are specializing here at the University of Geneva. And sometimes talking about this tax incidents of selling losers, so as to off set the gains you have made on your winning stocks may not be optimal. Why should you sell a stock just for tax purposes? The robot might not know that, in fact, you are sticking to that position because you think it's going to bottom out, and out perform soon. So in conclusion, I would say Robo-advisors are certainly useful for helping you shape your strategic asset allocation. This is the sort of highway of your investments but when you have to deal with tactical asset allocation possibly here big data will help but it's more complex situation and more difficult. I would say, robots are different animals, but no perfect substitutes to perfectly efficient human financial advisers. [SOUND] Talking about animals, you know I'm quite fond of animals and the so for this last video, for this concluding video. I'd like to take you back to where we were during the winter and this time here it's summer, at last. And I want to take you back to the same place and talk about some animals in the world of finance. So, come with me. [MUSIC]