money Archives - Raiz Invest

Markets
go up and markets go down. This is completely normal, and is known as market
volatility or risk. The Raiz Philosophy is to invest small amounts regularly,
even in falling markets as this can help you to ride out the downturns in the
market and is one of the keys to having a healthier balance over the long run.
This is the well-known principle of Dollar Cost Averaging.

How
does it work? For example, say you have $1,000 to invest. Instead of investing
it all at once, you could invest $100 each month into the market for 10 months,
despite the changes in the market value.

If
for example the stock of choice was priced at $10 the first month, you would
purchase 10 units. If during the second month the stock was priced at $5, you
would purchase 20 units, and so on.

In the end, you would have purchased more
shares when prices were lower and fewer shares when prices were higher. The
outcome is that you may have invested more prudently than simply investing the
money all at once in a lump sum.

Let’s
look at the other key advantages to sticking with Dollar Cost Averaging (DCA):

Avoids
Bad Timing

Investing in one lump sum and trying to pick the best price to enter the stock is known
as market timing, and is something very difficult to do and get right.

If an investor could have any superpower in the world, it would be to pick the low
points of the market. Many have tried, succeeded and failed but no one knows
exactly when the lows and highs will happen, and no one can stop unwanted
surprises from happening.

Dollar Cost Averaging can provide a disciplined strategy as it ensures you are not too exposed to
falls in the market when you buy at the top; and rewarding you when the market
recovers, for buying when the market was falling.

By not depending on the
timing, DCA can smooth out the market’s ups and downs.

Reduces
Risk

Dollar Cost Averaging is most effective in a long term saving strategy. As the market moves up and
down, dollar-cost averaging over time reduces your risks of trying to pick the
best times to invest from these swings.

By viewing falling markets as buying
opportunities, you can significantly enhance your long-term return potential
when the market rebounds.

Removes
Emotional Investing

People often make decisions based on emotion or loss aversion. Loss aversion refers to
an investor’s tendency to strongly prefer avoiding losses to acquiring gains.

Studies suggest that losses are twice as powerful, psychologically, as gains,
leading this type of investment mindset to be more likely to make the mistake
of needlessly selling holdings and switching to cash in a down market.

By
avoiding the media hype or fear in picking the ‘right time’, investors can
avoid both the euphoric and depressive investment traps.

A Dollar Cost Averaging strategy is in line with the Raiz’ philosophy and provides a disciplined
strategy.

“We
don’t have to be smarter than the rest, we have to be more disciplined than the
rest.”
 – Warren Buffett

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Important Information

The information on this website is general advice only. This means it 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 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 making a decision to invest in Raiz and is not a good predictor of future performance.

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We
are very excited about launching Raiz Down Under, giving Australians the chance
to invest their change to build something much bigger. One of the most
important messages we want to spread is that when you invest with Raiz, you
have chosen a smart and secure way to invest. Let’s look at one of the
techniques Raiz utilises to manage and grow your savings effectively-dollar-cost
averaging.

The
market will go up, the market will go down, being able to pick the low point
and see your portfolio grow in value is the dream, but is unlikely when acting
on intuition alone. Dollar-cost averaging involves regular investment over
time, regardless of movements in the market. This aims to reduce the need for
intuition in picking highs and lows in the market.

For
example, say you have $1,000 to invest. Instead of investing it all at once,
you could invest $100 each month into the market for 10 months, despite the
changes in the market value. If for example the stock of choice was priced at
$10 the first month, you would purchase 10 units. If during the second month
the stock was priced at $5, you would purchase 20 units, and so on. In the end,
you would have purchased more shares when prices were lower and fewer shares
when prices were higher, having invested more prudently than simply investing
the money all at once in a lump sum.

This
strategy has the potential to give you a low cost per share relative to the
overall average price per share – as you buy more units when the price is low,
and less when the price is high. This disciplined strategy is important,
ensuring you are not too exposed to falls in the market when you buy at the
top; and rewarding you when the market recovers, for buying when the market was
falling.

Dollar-cost
averaging is most effective in a long term saving strategy. As the market moves
up and down, dollar-cost averaging over time reduces your risks of trying to
pick the best times to invest from these swings, trending your portfolio
towards profitability.

You
can utilise Raiz to implement dollar-cost averaging at your own pace by
selecting another key feature, recurring deposits.  Raiz will manage your
investment, all while saving you time, energy and uncertainty.

For
more information and to register for our beta testing due in November 2015,
make sure you visit www.Raizinvest.com.au and sign up!

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.

Imagining your Raiz account as a
healthy nest egg may be challenging when you first get started. Patience is a
virtue in nature AND investing.

If a user adds only $1 per day to
their Raiz account, it will typically take about one year before the account
generates more than it costs*.  Likewise, money sitting in a bank account
may incur more fees than it earns in interest until the balance is large
enough.

Raiz provides the most natural
way to invest. If you start small, contribute often and commit long-term, you
can help build a financial future which is in balance with whatever your life
goals may be. Tools like Round Ups, Lump Sum Deposits and Recurring Deposits
make contributions easy, and we invest in low cost ETFs so we can pass along
low management fees. Using Raiz for a year can cost less than some traditional
brokers charge for two trades.

Many Investors decide to start
their account with a lump sum (a single payment, perhaps $50, $100, $500 or
more) because it will likely earn more money faster. If you are unable to
invest a lump sum when you start, Round-Ups remain a smart way to put aside
spare change for your future. You’re getting started, and that’s the single
most important part of investing: beginning.

Even if you build your account
slowly, it will one day be a lot larger than what you started with. Whenever
you’re feeling discouraged, think of the mighty oak tree, and have patience.

*Assumes average long term rates
of return. 

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.

Exchange Traded Funds (ETFs) are
one of the fastest growing investment products in the world, offering investors
a simple and cost-effective way to achieve diversification in their investment
portfolios.

ETFs blend the benefits of both
managed funds and shares. ETFs offer efficient, low-cost diversification,
combined with flexibility and liquidity of a share.

ETFs can be bought and sold on a
stock exchange like shares. And, like managed index funds, they contain a
diversified portfolio of securities designed to track specific stock and bond
indices, like the S&P/ASX200 a measure of the Australian stock market. This
means investors can use ETFs to gain the exposure and diversification they
want, quickly and simply.  ETF shareholders are also entitled to interest
or dividends paid by the share or bonds that make up the ETF.

We at Raiz have done the hard
work for you, have selected a basket of widely traded ETF’s that are quoted on
the Australian Securities Exchange, the ones that are designed to match
well-known benchmarks and combined them into 6 different portfolios ready for
your selection.

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 number one metric for most
apps is user engagement. The more time you spend using the app; flinging birds,
playing words with friends or updating your whereabouts, the more opportunity
the producer of that app has to monetize you.

That’s ok if you are getting good
value, like Google. Their search engine is very efficient, takes little time,
and usually delivers information you want. But most apps aren’t that way. Have
you ever found yourself spending a few hours with an app when you only planned
to check in? Many apps take more than they give. Their success is dependent on
getting more and more of your attention.

At Raiz we think it should be the
opposite. Apps should free you to do more of what you really love to do. So
instead of trying to increase “user engagement” we have features like automatic
round ups, which allow you to save and invest in tiny increments without ever
checking the app.

As a popular investing tool when
you do engage with Raiz you can see how your portfolio has performed;
understand how changes in market affect the value of your investing; and also
learn about the power of regular savings and compounding.

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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.

Hello and thanks for visiting our
blog. We want to make your financial life a little easier by offering a simple
new way to save and invest, but first let us tell you a bit about ourselves.

Raiz is a group of
mathematicians, software engineers, behaviourists and financial professionals
who all need to save and invest, and we believe this should be something that
happens in the background of life and be as natural and without effort as
possible. So we built Raiz as much for ourselves as for you. The idea is to
harmonize with human nature. We link something we need to do, investing, with
something we do all the time, spending. In this way saving and investing
happens automatically, in small increments with ease.

As you may know there are
millions of people with – “saving more for their financial future” – high on
their “to-do” list. Many are waiting to accumulate a lump sum before they
start, and missing out on years of compounding, or they believe they can’t
afford to take money out of their pay check, or can’t quite muster the
discipline to invest often enough to make a difference. But by breaking the
investment process into little pieces and finding creative ways to funnel money
into an investment account, more people can invest more often and worry less.

Behind our app is a micro
investing engine that rounds up your credit and debit card purchases to the
nearest dollar, and steers these micro-monies into your own investment account
of diversified index funds. Over time your account builds while the financial
engine does all the investing, rebalancing and instantly communicating results
to the app on your smartphone. It is fun and cool!

By making the increments small,
frequent and automatic, the process is easy. The registration process does take
a couple of minutes because you do have to link your bank account debit card or
credit card, and set up your investment account parameters, but after that it
just happens.

Investing small dollars may seem
insignificant at first, but it is a start.

Our commitment to our users is to
keep thinking of ways to make the savings and investment process as fun,
simple, natural and effective as possible.

Make sure you get on the list
at 
www.Raizinvest.com.au !

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.

Raiz Invest Limited

ABN: 74 615 510 177

AFSL: 434776

Level 11, 2-4 Bulletin Pl,

Sydney NSW 2000

1300 754 748