Think about what kind of investor you are before even investing at all

Had a great catchup with my friends over brunch just today and somehow the conversation was pivoted to investment. For the longest time now I have been a pretty concealed investor for the fact I really do not like to share much with my friends cos I believed it was sensitive. However, today was somehow not the usual as I opened up about investment.

Robo-Advisors

We began the conversation as a friend mentioned someone close to her had introduced this thing called "Stashaway" to her. This friend of mine, I guess you could label her a manager in her line, but like most working adults, not everyone is an active investor who does homework on potential up and coming stocks for purchase as investment. Most professionals, unless you have a real passion about investing, choose to focus their time and effort on their work. So, I am actually the passionate one when I thought every adult was like me when it came to investing. I was so wrong. Most are rather passive it seems, apologies but I digress. 

My wife was the one who mentioned it to me, signed me up and thus I am newly oriented to stashaway. Being a little more financially-savvy, I guess I was in the position to narrate a bit more to my friends over brunch. Robo-advisors are actually not new in the market. However, I believed they took a while to gain traction simply because the earlier ones such as DBS Robo-advisor had a minimum of 3k before you could get in. That's why they lost out to platforms such as Stashaway despite arriving earlier in the market and are probably kicking themselves, wondering why they could not gain traction. The suits should first need to understand, the target segment is probably Millenials. And these Millenials are no longer the Ginnas kids hanging out at Cineleisure skateboarding already, instead they are the working professionals of today in their own line/specialty, building their careers. And you are setting a 3k minimum investment before you can get started, goodness, the limit is probably set with more consideration for the bank's P/L, management pay, etc instead of consumer benefit.

Enter Stashaway

Honestly, at the start, I never really understood what's the hype with stashaway. But I guess it is always better late than never. Main draw about them I guess is the Low entry amount. You only have 100 dollars? Sure, a 100 dollars it is then. Unable to commit monthly like POSB invest saver? Sure, you can top up whenever you want to, as and when you feel like it. How not to get started you tell me? The 2nd main draw would probably be diversification and exposure to various asset classes. Unless you want to watch dozen of videos or read dozen of articles narrating and trying to convince you which is the next best stock to buy in anticipation of a bull-run, I think you are better off staying passive in diversification accordingly to your risk level. Ease of purchase is my last reason why it is so popular. Depositing funds, via bank transfer or Paynow? Take my money already. Unless if you really want to get into a specific stock in a specific market, then sorry for the hassle as you will have to go through a brokerage account opening and pay brokerage fees ultimately. To which I believe, even at 0.8% management fee, Stashaway seems like a bargain for the passive investor.

Surely there is risk?

Of course there is risk. We are talking about exposures in equities across markets ie. US/China/Emerging. But as with all things, its about the risk and reward. As such, selecting the higher risk levels in the app will subject your portfolio to more equities exposure which is a good and bad thing. Good if stock prices rise and bad if stock prices fall. Mr Market is something we cannot control but by periodically investing, either manually or monthly, you dollar cost average which is a defensive strategy for the passive investor and I think that is a good thing. Just to add, I had been a loyal SGX person until I had a change of heart recently. It just occurred to me that SGX stocks are better for dividend/ REIT investing. If you are looking for growth, I am of the opinion that you will need to look at other markets ie. US/China. I mean logically, what are the chances of someone in some other part of the world be using a Singaporean product versus a US/China product. Lets spell it out even more if it is not that clear for you yet. For example, the apple iPhone has been a global product, and the thirst for it, as much as I cannot comprehend the people paying premium for it, is insane. Now compare that with the chance of someone using a product from Koufu/Breadtalk/Osim/Singtel/ST Engineering globally? And that exposure and market reach is exactly what you want in a growth company which directly impacts the revenue and ultimately its stock price.

Think about what kind of investor you are

To conclude, you probably know better about yourself than I do. Until the day you choose to become a stock picker, which comes with time and ample due diligence, I would believe you might wish to explore passive investing platforms or ETFs or unit trusts or make friends with me.

Happy sunday and always remember, no amount is too small to begin the investment journey!

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