I have come across this question few times. Below is my response.
Factoring-in the downside risk is an essential part of portfolio construction and investment management, and I am sure that credible robo-advisors deal with this.
As a client, if you are worried about the downside risk of your portfolio, then may be that portfolio is too risky for you. May be, your risk tolerance level is much lower, and you would need to opt for a less risky portfolio.
The key is you settling down for a portfolio such that you are comfortable with the inherent risk of that portfolio. In other words, you should be comfortable with the downside risk of the portfolio that you are opting for. Then you need to make sure that the returns of that portfolio are optimized for the risks of that portfolio.
This is what we at QuietGrowth do. We assess your risk tolerance and suggest an appropriate portfolio, so that you would not lose sleep on the downside risk for that portfolio.
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