Blog - Raiz Invest

Bring to the table win-win survival strategies to ensure proactive domination. At the end of the day, going forward, a new normal that has evolved from generation.

Market Update

Market update from George Lucas, CEO Raiz Invest.

Weak Chinese data for November

The week began on a positive note. In particular, US–China trade tensions eased with China allowing US Soya Beans in again and reducing the tariff on US cars to 15 percent even though Huawei’s CFO, Meng Wanzhou, was facing extradition to the US.

But then China reported its activity and spending data, which confirmed a dismal November. Growth in investment, industrial value-added and retail sales all slowed last month, with the latter now at a 15-year low. This adds to the evidence that China’s economy is under significant pressure, not from the trade war, but primarily for domestic reasons.

On top of that, Chinese lending data showed the People’s Bank of China’s preferred measure of credit growth at its lowest since 2005, indicating that the central bank’s efforts to turnaround the Chinese economy with looser monetary conditions are not working yet.

Ugly Purchaser Management Index fans euro-zone growth fears

In Europe, there was also the release of weaker-than-expected data. The closely-watched flash Purchaser Management Index (PMI) slumped to 51.3, its weakest since November 2014 (but still signalling growth), and the market began to concern itself that global growth is now slowing.

The gloomy PMI was largely driven by a sharp drop in France’s data, perhaps suggesting that the yellow vests protests had a serious economic effect. However, even if France’s index rebounds with the protests now over, the euro-zone economy has clearly shifted down a gear and looks set for more moderate growth next year.

Yellow Vest Protest in France
Gloomy PMI suggests yellow vest protest had a serious economic impact.

Blowout month for US retail sales

Across in the US, where all the uncertainty began, the news was more upbeat on the economy. The highlight was a 0.9 per cent surge in underlying retail sales for November, suggesting that real consumption growth has remained strong in Q4.

There was also a solid gain in monthly industrial production, which rose 0.6 per cent due to better utilities and mining output. However, manufacturing output was flat in November.

Meanwhile, Johnson and Johnson shares plunged more than 10 per cent after reports the company knew for years that its baby powder contained asbestos, including in Australia. The US pharmaceutical and cosmetics giant strenuously rejected the claims.

Read our previous blog, 6 Ways to Save More For Christmas 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

Raiz is a micro-investing app that works by allowing you to start investing with as little as $5. Users can invest into their Raiz account through round ups, recurring investments, and lump sum deposits. Money in your Raiz Investment Account is invested into a mix of exchange traded funds (ETFs) in accordance with one of six different Portfolios selected by you. Raiz provides Australians access to start early, invest often and reach their financial goals.

With Raiz, saving and investing is easier than ever before.  Here’s how Raiz works.

First, connect a bank account to your Raiz account. This is where all deposits and withdrawals to and from your Raiz account will come and go.

Next, you’ll need to choose a Raiz investment portfolio. The portfolio’s are ‘Conservative’, ‘Moderately Conservative’, ‘Moderate’, ‘Moderately Aggressive’, ‘Aggressive’ and ‘Emerald’. The offering of portfolio’s are designed to suit the differing investment goals of investors, in terms of acceptable level of risk and planned time in the market (see our PDS for more info). For example, an aggressive portfolio may suit you if you want higher returns in the longer term, but will accept a high risk of losing capital over the medium term.

Raiz Investment Portfolio's
An example of a Moderately Aggressive Portfolio

Then, set up your spending accounts in Roundups. Raiz can track credit cards, debit cards and other bank accounts and will round up every purchase to the nearest dollar and keep track of this amount. When your round-ups hit your round-up threshold, we’ll withdraw it from your bank account and invest it for you. Your new shares will then appear in your Raiz account and you can watch it grow over time.

Raiz round ups on phone
Round ups can help you save in the background of life

You can also set up a Recurring Investments plan or Savings Goal which you can name to help your account grow even faster.

If you have spare cash you can always invest into your Raiz Account at anytime using Lump Sum investment.

Feel confident in saving more and investing with Raiz.

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Don’t have the Raiz App? Download here

With the festive season beginning, you might be stressing more about the potential hit your bank account is going to take, rather than looking forward to celebrating and spending time with friends and family. Don’t worry, because here are 6 tips that can help you save more for Christmas and secure confidence in your personal finance 🎁 💳

1. Create a budget

One of the easiest and most effective strategies to manage your spending over Christmas is to create a budget beforehand. Pre-planning a budget, and following it, will prevent you from spending more on presents, food and drinks than you can afford. It is a common trap that many of us fall into when we forget to track how much we are spending, only to then realise all those costs stacked up more than anticipated.

The ‘My Finance’ tool in the Raiz app can be helpful in planning a budget. You could take your average monthly spending, and then decide how much more you can afford to spend in a month on top of that for your holiday shopping. Or, you could see how much you can cut back on other non-essential purchases to keep your spending similar for December.

2. Stick to a list

By making and sticking to a list, you avoid buying more presents than you really need to (how many socks does Dave really need?). This list would tie into a budget, making sure that you spend the correct amount of money on the correct number of presents. Keeping a list of what you have gotten for whom and what you still need to buy eliminates mistakes of overbuying, and any awkward social situations where you forget someone’s present. Receiving a present from someone, and then remembering you’ve forgotten to get them something in return is a cringe worthy moment no one wants to experience.

Christmas List
Stick to a list over Christmas

3. Take Advantage of Raiz Rewards

Take advantage of over 150 online retailers through Raiz Rewards. Why not get a gift back from our partners from your gifting shopping? Shop through Raiz Rewards and get a cash reward invested back into your Raiz account. This is on top of any sales and deals leading up to Christmas, so browsing these sites to find the best price, and using available discount codes, can save you a decent sum of money. Please also check the T&Cs within the app.

Most sites will offer free shipping once you meet a certain expenditure threshold, e.g. free shipping for purchases over $70. So, if you can coordinate your shopping to meet this threshold, you’ll save a nice little sum of money, rather than paying shipping for every individual present. Say, for example, shipping is $10, and you purchase 5 gifts from the same site, but separately, that’s $50 you could have saved by buying at the same time and meeting the free shipping threshold.

Staying on the topic of shipping, getting organised with your shopping is also important. If you order something say, 3 days before Christmas, you run that risk that it won’t arrive in time for Christmas eve/day. Alternatively, you might have to cough up a few extra dollars for express shipping.

Raiz Rewards
Raiz Rewards as it looks on the app

4. Jump on post-Christmas Day sales

The day after Christmas, retailers no longer want to stock Christmas decorations and wrapping paper, since there is no longer a demand for them (more often these days the sales are starting earlier each year). Therefore, the prices get significantly reduced in order to offload stock. This is a great opportunity for you to stock up these items for next year’s Christmas and save a bunch of money the following Christmas. If you’re super prepared you could even buy presents for next year with all the Boxing Day sales around.

5. Share the cost of Christmas meals

If you’re hosting a Christmas lunch, dinner etc. this year, instead of buying and preparing all the food, ask friends and family to help contribute. For example, you could cook the main Christmas staples, and ask others to bring the salads, desserts etc. This is a simple strategy that can save not only money, but also the time and stress that comes with the burden of preparing a Christmas meal by yourself.

Christmas meal
Share the costs of Christmas meals

6. Organise a Secret Santa

Organising a Secret Santa can be a great way to cut down on the cost of presents, whilst also getting everyone involved. The benefits of a Secret Santa are two-fold. Firstly, setting a budget for the presents removes the ambiguity of how much you should spend. The obvious second benefit is everyone only having to buy one present. One of the best elements of Secret Santa’s is that you can adjust the budget and tone of the gifts to suit different groups. A less formal group of friends, for example, might assign a $10 budget and buy each other trivial presents, whereas a family could establish a larger budget with more sincere gifts.

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Locks on chain

Don’t have the Raiz App? Download here

You just deposited $10 into your Raiz account, the funds leave your bank to be used to buy Exchange Traded Fund (ETF) units, and your Raiz balance increases. But where, exactly, are these ETF units held for you?

They are not held by Raiz, but are held by an independent Custodian.

When you deposit funds into your Raiz account, there are a number of actions that happen before you see your balance increase. This diagram, taken from our PDS, provides an overview of what happens when you invest into your account.

Structure of the Raiz Fund showing the role of the custodian
Structure of the Raiz Fund

As you can see, Raiz doesn’t hold any ETF units. When we buy ETF’s on behalf of investors, the actual ETF units are then held by an independent Custodian (Australian Executor Trustees Limited).

What is a Custodian?

Put simply, a Custodian’s job is to hold assets (in this case ETF units) on behalf of the investors in the registered managed investment scheme (Raiz). They could be thought of as a bank for Raiz, whose only role is to hold and safeguard the assets of the fund. The chosen Custodian, Australian Executor Trustees Limited (AET), is one of Australia’s largest and oldest licensed trustee companies. AET has been operating for over 130 years, having been providing Custodian and Trustee services since 1880.

What benefits does a Custodian provide to Raiz users?

  • The primary benefit of our fund’s assets being held by a custodian is the assurance an independent custodian provides Raiz users. Hypothetically, if Raiz was to suddenly go out of business, the assets are still held by the Custodian and the dollar value of every user’s account would be returned to them. The ETF units, held by AET, would be sold on market by the Custodian so that their value in AUD would then be deposited back into users’ bank accounts.
  • Another benefit is the checks and balances a Custodian provides to Raiz users. They have a compliance function to ensure everything matches up.

If you’d like to read more in-depth about our Fund structure and Custodian, have a look through our PDS 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

  1. An active Raiz Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statement found on the website: raizinvest.com.au.
  1. Entries open Sunday, 9th December 2018 at 11am and entries close Sunday, 23rdDecember 2018 at 5 To enter one must complete in full the ‘Improving our Services’ within the timeframe stated above and provide the email address on your active Raiz Investment account within the survey. Note there could be circumstances where the survey period is shortened, extended or otherwise modified at the discretion of the company.
  1. To thank you for completing the Survey, Raiz Invest will be giving away five $50.00 credit investments in to their active Raiz Investment Account. These five investments will be selected at random. We note that no individual prize exceeds $250.00 and total value of prizes do not exceed $50,000.00.
  1. These five random Raiz Account holders will be notified by email when the credit investments will be deposited into their Raiz account by Monday 14th January 2019 subject to any circumstances where the survey period is shortened, extended or otherwise modified at the discretion of the company.
  1. The permit number in the format NSW Permit No. LTPM/18/03853.
  1. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  1. By entering this promotion, you agree that we may use entries / results / feedback for future marketing purposes in any media or branding.
  1. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing. Amounts are in Australian dollars.

NSW Permit No. LTPM/18/03853

G20 summit

Market Update from George Lucas, CEO of Raiz Invest

Positive Trump-Xi meeting at G20 Summit

This week will start with analysis of the G20 Summit in Argentina and then the market should go back to focusing on US treasury yields and the possibility of a slowdown in the US.

The G20 summit saw trade at the top of the agenda, with hopes for talks between Chinese President Xi Jinping and US President Donald Trump and that the two leaders would strike a deal easing US-China tensions after the recent APEC meeting confirmed deep divisions.

In a positive outcome, Xi and Trump agreed to temporarily halt imposing new tariffs and work on a more permanent deal at a dinner on Saturday after the Buenos Aires summit.

Without a deal, Trump could have pushed ahead with levying tariffs on an extra $250bn or so of Chinese imports.

Business deal shake
The US and China Agreed to a Temporary Trade Deal

China stocks rally

Despite the talk of US protectionism before the G20, equities in China, which have been a big victim of trade war fears, have recovered recently and done better than those in the US.

The underperformance of Chinese equities earlier in 2018 started around the same time Trump approved tariffs on $50bn of Chinese imports, and threatened more to come.  Worries about China’s economy, which also emerged around that time, didn’t help either.

But since early October China’s stock market has performed noticeably better than its US counterpart, in line with some stabilisation in the renminbi relative to the greenback.

That partly reflects the S&P 500 starting to come under pressure as investors fret about the outlook for the US economy and improved sentiment surrounding US-China trade tensions.

Shanhai
Shanghai is a key component of the Chinese Economy

Spotlight on Fed Chair Jerome Powell

Turning to the US, markets will be watching US Federal Reserve (Fed) Chairman Jerome Powell’s address to the Joint Economic Committee of Congress on the US economy.

Powell’s testimony this week is likely to see him hint that the Fed intends to continue hiking interest rates next year. I don’t think he can say anything else as the November employment report will likely be strong and cement expectations for a December rate hike.

However, slumping oil prices and fears about the US economic outlook have caused investors to dial down expectations for tighter US monetary policy for the first time in ages.

Investors are now discounting roughly two rate hikes between now and the end of 2019, rather than the three that they were anticipating a few weeks ago.

Jerome Powell
Jerome Powell Will Address the Joint Economic Committee of Congress this Week

2-year US Treasury yields dip

Still in the US, the 2-year US Treasury yield has fallen significantly since November 8. This has also been driven by the recent fall in oil prices pushing down inflation expectations and worries about the US economic outlook connected to future Fed tightening.

Oil’s more than 30 per cent decline since touching a four-year high in early October has left energy stocks the worst performer on Wall Street this quarter.

However, a question remains about how much of the tumble in oil is due to a sudden market oversupply, or if it’s down to fears of a broader economic slowdown next year.

OPEC meeting could reverse oil-price plunge

The answer will likely come at this week’s OPEC meeting, with a supply cut on the agenda.

There’s confidence that a deal to restrict supply will be reached after Russia signalled it would continue to cooperate with the cartel and may agree to some form of production cut.

But if oil prices continue to fall and were to reach $45 a barrel, then that becomes a clearer signal that it’s not just an oversupply challenge, but that slowing global growth is a factor.

Oil Rig at sea
Oil price plunge could be reversed

Read our previous blog – Why Time in the Markets Matter’

———————

Important Note: The information on this website is provided as general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information on this website is confidential and it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information on this website to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained on this website is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Raiz Invest or any third party who has contributed to this content for any of the information contained here in or for any action taken by you or any of your officers, employees, agents or associates.

Time in the Market

Don’t have the Raiz App? Download here

You may or may not have heard the saying, “It’s not about the timing market, it’s about time in the market.” But what does this mean exactly?

Some new investors may tend to place a short-term focus on how their investments are performing. They’ll frequently track how their shares are going, get excited when their position rises, and then, if it falls, they’ll become carried away with emotion and saddened by a change in market conditions and short-term loss of assets.

But what about the long-term picture? Over time stocks tend to naturally go through periods of growth and decline – this is completely normal. Therefore, selling off stocks after a brief period of decline rather than focusing on the long-term goal can be a strategy that doesn’t add value, given it is likely that shares will rise later down the track. Just as hard as it is to predict the downturns, it is also hard to predict when stocks will turn around and rally.  This is known as timing the market – picking the tops and bottoms.

To avoid having to time the market to invest, a more long-term strategy is to utilise the advantages of time in the market – that is, the longer you are in the market, the more likely you are to see a healthier return.

The first step is to choose the right portfolio for you. If you are likely to withdraw your money when the market declines, you should probably be in Moderate to Conservative portfolio options. This way, a stock market decline should have less emotional impact on you. Therefore, you are likely to remain disciplined when markets decline by not withdrawing your money due to the fear of more losses and sticking with your strategy.

If your savings goal is short-term (less than three years) a Conservative option is also probably best.

The Aggressive and Emerald portfolio options are for those with long-term saving goals and the ability to remain disciplined during market down turns and the associated losses on their portfolios.

Choosing the right portfolio is an important step in avoiding the emotional traps of euphoria and depression that can cause you to make rash decisions

Raiz Investment Portfolio's
An example of the projected value for a Moderately Aggressive Portfolio after 11 years.

The second step is to have a disciplined saving/investing strategy or philosophy. At Raiz, our philosophy is to invest small amounts regularly, thus helping to manage market uncertainty. This is a well-known investment strategy, known as dollar cost averaging.

Dollar Cost Averaging Definition
See our blog on “The Advantages of Dollar Cost Averaging”.

Raiz automates this strategy and does it more frequently, with the average Raiz customer investing at least once a week. The result can be a healthier balance over the long-term through the automation provided by Raiz.

By automating the process, your investing strategy can also be protected against those short-term emotions.

Another benefit of spending more time in the market is from compounding. This is when an asset’s earnings are reinvested to generate additional earnings over time. Reinvesting dividends into shares can increase returns due to the power of compounding.  So, the longer you spend in the market, the more dividends you are likely to receive, which are reinvested into more and more shares over time.

It is not easy when it is your money.  We all experience the emotional high and lows that come with investing, however by maintaining a disciplined, automated approach, and selecting the right portfolio, you can avoid short term stress and take advantage of dollar cost averaging and compound returns over time.

 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

 The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

 The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

 Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

 Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

 The Raiz Invest Fund is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) a subsidiary of Raiz. A Product Disclosure Statement for this product is available on the Raiz Invest website and App. A person should read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statements found on the website: raizinvest.com.au.
  2. Entries open Monday 19th November 2018 at 4PM and entries close Sunday November 25th 2018 at 5PM. To enter, one must comment on the Facebook post within the time frame stated above.
  3. Raiz Invest will select five winners with a $100.00 credit investment in to their active Raiz Investment Account. These five investments will be selected at Raiz’s discretion. We note that no individual prize exceeds $250 and total value of prizes do not exceed $50,000.
  4. These five Raiz Account holders will be requested to message us their email and will be notified by email when the credit investment is deposited into their Raiz Investment account by Friday 30th November 2018.
  5. The permit number in the format NSW Permit No. LTPM/18/03853.
  6. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  7. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  8. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

NSW Permit No. LTPM/18/03853

by Raiz Invest CEO, George Lucas

So, is the market volatility over? Unfortunately, when you invest into markets, it is never over.  The reason we invest is to give us the potential to earn more than can be earned from a bank account.

With that in mind, here’s my best guess for the reason behind the recent downturn in the markets. It wasn’t about fears around global growth, it was about an expectation that company earnings, especially in the US, won’t be able to grow as fast in the future as they have over the last couple of years.

Many in the market decided to take profit because of this earnings uncertainty, especially when it came to US technology companies.

The latest US employment report, released last Friday night, didn’t help. It showed a strong US labour market, adding a better-than-expected 250,000 jobs in October, which means that company earnings may slow as wage-costs rise.

In order to earn the potentially higher returns from investing we need to put in place strategies to manage the market uncertainty.

Firstly, when it comes to portfolio selection, clients should consider their age and goals in deciding what portfolio selection is right for them.  Being in one of the aggressive portfolio options can work well when markets are rising.  However, when they fall, they will also lose more.  If the fall in the dollar amount causes you to withdraw your money or to time your market exit and then entry, then maybe you should explore a less aggressive option.

Market timing usually doesn’t lead to higher returns, as funds may be withdrawn near the bottom of the market and added back near the highs.  There is a saying “It’s the time in the market, not the market timing” 😊.

This is why our philosophy is about investing/saving small amounts regularly.  We minimise the effect of market timing and it can assist in managing market uncertainty.

In my opinion no matter what your age, if you are saving for a short-term goal, then you should be in one of our conservative options.  Market uncertainty is then less likely to have the same affect on the value of your portfolio and you are more likely to reach you goal in the time frame you have set for yourself.

If you are saving for the longer term, say greater than 3 years and you are young, then being in an aggressive option may suit you.  This is because markets do tend to go up in the long term (you need to include dividends). So even though in the short term you may have set backs in your portfolio value, in the long term you should earn more than you can earn in a bank account.

In the end, it is your choice. We cannot recommend a portfolio choice.  Raiz is not a get rich quick scheme, it is about developing a habit of regular saving and investing to meet a long or short-term goal.

Remember, the current drop in the markets has nothing to do with the health of current US corporate earnings or the current state of the global economy and global growth – it is all about future expectations.  Markets are currently digesting the recent information and trying to land on a consensus of what earning growth will be for 2019.

Indeed, by many measures this quarter has been a record earnings season for US companies, while the US economy posted an impressive annualised growth rate of 3.5 per cent (annualised) for the third quarter.

US stocks weren’t alone in having a horror October. The MSCI’s World Index of stocks in 23 Developed Market countries fell by more than five per cent in local currency terms over the month.

So, is the market volatility over?

My answer is probably not as it will take time and some more ups and downs for the market and investors to come to a consensus, if, and by how much, earnings for corporations could slow.

In saying that, it is possible that November and December will see rallies. Although, February 2019 could turn into another sell-off until March 2019 when the forward-looking market has got its head around earnings growth for 2019 and begin focusing on earnings for 2020.

What level we end up at, and how much down, if at all, I don’t know. I do hope I am wrong, and markets resume their steady rally, but that is not my best guess.

So, choose your portfolio wisely — based on your goals and expectations of what you want Raiz to deliver.  Also, the Raiz philosophy of investing small amounts regularly can assist with managing market uncertainty as market timing is difficult.

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

The Raiz Invest Fund is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) a subsidiary of Raiz. A Product Disclosure Statement for this product is available on the Raiz Invest website and App. A person should read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statements found on the website: raizinvest.com.au.
  2. Entries open Monday 5th November 2018 at 4PM and entries close Sunday November 11thNovember 2018 at 5PM. To enter, one must comment on the Facebook post within the time frame stated above.
  3. Raiz Invest will select five winners with a $100.00 credit investment in to their active Raiz Investment Account. These five investments will be selected at Raiz’s discretion.
  4. These five Raiz Account holders will be requested to message us their email and will be notified by email when the credit investment is deposited into their Raiz Investment account by Friday 23rd November 2018.
  5. The permit number in the format “NSW Permit No. LTPM/17/02522.”
  6. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  7. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  8. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

NSW Permit No. LTPM/17/02522

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