Hah, true, although a bit mafan.

I think the important question to ask is, are fees % more important than having a passive investment portfolio that's relatively low risk and pretty well diversified, without needing to do too much market research and monitoring to rebalance and reoptimize portfolio? SA's rates are still pretty competitive compared to locally available peers, although in terms of user experience and portfolio quality they're a head above everyone for the most part. They're not as low fees as robos in the US, but the market there is brutally competitive. Will have to wait and see if more competitors appear in local scene.

(wheeze) fair point I'm personally not a fan of Bogleheads™ approach, but I'm a bit of a active gambler by nature. I do like to pick and choose specific sectors XD even if more volatile.

But back on topic, IMO investors shouldn’t pick their robos solely on who charges the least amount of fees, even though fees do make some impact over time. One should also consider how each robo chooses their assets and why, how the rebalancing/reoptimising of portfolio happens with the robo, and whether the robo actually brings in good returns. If profits are high enough your investment will pay its own fees, so to speak

Depends:

Retiring soonish (within 10 years)? REITs will likely give better, more stable yield. 22 SRI is quite volatile and if you're going to rely on investments for retirement savings it might not be enough time for any corrections.

Do you still believe in the viability of brick n mortar malls and office space? Do you prefer enduring volatility for the chance of higher gains, or do you want constant and reliable income? REITs are stable low risk investments that pay steady dividends provided those properties are tenanted. 22 SRI relies mostly on equities where the main way of "profit" is in the units themselves gaining in value. There are some dividends but they're incidental and very low. And as above mentioned, 22 SRI is volatile.

Most people will DSR monthly, usually after salary The high number of LYN posters here saying they deposit weekly are exception rather than norm. Easier for average user to brain/calculate based on monthly rather than weekly DCA.

It depends on three things:

1) Are you comfortable with volatility, even watching your account dip into negative, knowing that in the long term you're gaining?
2) Are you investing for at least 10 years and will not withdraw any amount under any circumstances (except for life and death)?
3) Are you sure about your answers for the above two questions?

Mathematically, for the long term (more than 10 years), 70% of the time lump sum will yield higher return than DCA, because your money is in the market for longer so it'll work for you longer.

However if you cannot answer questions 1, 2, AND 3 with hard "yes", it's most likely better for you, emotionally, to DCA. Because the worst thing that can happen is not the market crashing, it's when you panic during crash and withdraw early, realising any losses you make.

To understand what SRI and projected gains means.

SRI: Refers to the Value-At-Risk (https://www.investopedia.com/articles/04/092904.asp). The number you see is a benchmark of how low a given portfolio can dip in value. Example: an SRI of 36% means that there is a 1% chance during any year year where the value can drop to lose more than 36% unrealised loss. 99% of the time, however, it would stay above -36% of the amount invested.

Projected gains:

I'll use the numbers you gave in the above slider chart:

At RM1k initial deposit, if I continue to deposit RM1k monthly, and I keep depositing that amount for 30 years non-stop without changing amount:

I have 95% chance of having more than RM166,087.00 in investment for that portfolio
I have 75% chance of having more than RM177,436.00
I have 50% chance of having more than RM185,834.00
I have 5% chance of having more than RM208,212.00

that's how the projection calculate.

For what you call the "losses" for first few years, it's to account for the volatility of the underlying portfolio. Usually first few years the volatility means that gains can be very minimal unless you get lucky and deposit right before a bull run in the market. It takes time for assets to gain value + for dividends to accrue properly.

High or low is relative to the individual. Based on your response it seems that StashAway might be high risk towards you because you're more concerned about potential losses than potential gains. If losses make you worry so much it means you're an individual with low appetite for risk.

I would like to also highlight the following:

1) Forex risk. StashAway uses USD to invest in portfolios, so there is a risk of currency exchange rate working against you when you withdraw/deposit, as StashAway needs to convert from MYR to USD to invest, and vice versa when you withdraw.

To use myself as a personal example:

I started an SRI 16% portfolio in mid 2020. From mid 2020 to start of 2021, there was a massive bull run and stocks climbed to an all time high. HOWEVER, during that same time period MYR strengthened greatly vs the US dollar. So by February 2021, my portfolio when seen in USD has over 30% gains. However when seen in MYR (which is the important part as it's what I'll get in cash if I withdraw), my gains was only around 10%

2) Risk of user being itchy fingers and play around with risk index. Because StashAway makes it very easy to switch risk index, if you keep switching indexes you can cause yourself to incur losses from cost of selling + switching.

If you want to use StashAway to grow wealth, treat it like a savings account/EPF account that you won't touch, ever, until you've reached your goal timeframe/amount. Deposit opening amount, setup a direct debit mandate for monthly/quarterly deposits, then DON'T TOUCH IT until you're ready to withdraw.

First time direct debit? Usually takes 6 business days, to setup trustee account and for bank to verify direct debit mandate.

"Just keep in mind that it can take up to 6 working days for the bank to verify your first direct debit with us. For any direct debits after that, it'll only take 2 working days from the day you schedule them." - StashAway

Note that if your bank fail to verify the direct debit mandate on time, this first time debit can be delayed for a while.

No reason to turn it off. Reoptimising is where StashAway adjusts the portfolio to buy new ETFs that they think will perform better, and sell off old ETFs where they think are underperforming. This will probably happen maybe once a year or every few years. This ensures that gains remain steady and you don't end up stuck in stagnant/underperforming funds.

"switching" in StashAway doesnt really work the same way as mutual fund switching. StashAway has a set of ETFs they invest in; what each SRI does differently is that each level of SRI has different ratio of weight (read: how much % of your money goes into which ETF) based on asset clas.

Example would be 6.5% SRI having around 38% government bond ETFs and only 6% international equities ETFs, while 36% SRI is more than 60% invested into equities with 0 bonds in portfolio.

When you adjust risk what happens is that the target weight ratio charges, so SA will sell off the excess units of "overweight" asset class and use the money redeemed to buy different asset classes' units, to put the portfolio in the correct SRI. This can cause issues because it means you'll realise any loss/gains you made in the sold-off units, and if timing bad you may end up buying units at market high.

Over time as unit prices usually trend upward, constant adjusting risks means you end up with less units overall than if you simply opened a new portfolio at different risk and invested there without touching the old portfolio. This will affect the dividends paid for your ETFs as dividends are paid by number of units owned, and thus in long run will affect the compounding interest of your portfolio.

Ah 🤣 well you can choose to keep those portfolios or maybe 'consolidate' them by adjusting risk for one or two of them (NOT transfer funds, that'll will cause you to sell all units and buy back at current rate). That's your personal choice tho.

DCA consistently and within your affordability (don't throw your emergency savings here)

Treat it like EPF; contribute consistently, and don't withdraw or adjust risk unless you absolutely have to and/or know what you're doing and are prepared to face the consequences of potentially withdrawing at a loss if timing is bad.

Don't give into to FOMO (fear of missing out; don't throw more money than you can comfortably afford because you're scared of missing market highs)

Don't give in to FOML (fear of making losses; don't be tempted to withdraw when market volatility causes your value to go negative, especially when you're only just beginning, moments of going negative is normal and common for first 5 years of most investments because compounding interest takes time to really begin to show effect)

Build your emergency funds in the meantime: You'd want to avoid withdrawing from SA in times of emergency when you desperately need money. Since you're fresh out of school I'm guessing you haven't gotten a savings cushion yet especially if you took debt to study like PTPTN. Calculate your monthly expenses for basic necessities (loans/debts, transport costs like petrol and insurance, rental and utilities, basic food cost, medical expenses if you have medical conditions), and then aim to save in cash around 6 months' worth of that amount. This way if you lose or change jobs you won't be drowning in desperate financial conditions yet.

This is exactly why StashAway exists XD for ppl with limited knowledge/time but want to invest in equities.

StashAway is still sort of managed by humans, actually. These managers will choose which ETFs to use and allocate how much % of the selected ETFs each StashAway portfolio should have.

What StashAway and most robo-advisors do is that they "advise" you automatically based on your responses to their online questionnaire, then compare your answer to their data. From there they'll "decide" what is the best portfolio for you and give you suggestions on what portfolio to use. Then when you deposit with them they'll buy units from different assets based on the asset ratio of your chosen portfolio.

The robo part also automatically help you rebalance your portfolio (example, if a certain asset has gained enough money that it exceeds the allocated % of your portfolio value, they'll automatically withdraw the overweight and buy units from assets to balance out the ratio again).

Compare and contrast with human financial advisor, who will quiz you in person and advise you what to invest in, or if you do your own research and do your own investing (this can be colored by human biases and motives). In non-robo platforms also the advisor and/or you yourself have to do the monitoring and rebalancing of your investment manually.

This post has been edited by DragonReine: Apr 22 2021, 05:10 PM

All robo advisors are human managed in the end 😅 not just StashAway. The robo part is in managing your portfolio's diversity and making sure that the balance of assets stays correct based on the target risk and growth of your portfolio.

You may read more about robo advisors here: https://www.thebalance.com/what-is-a-robo-a...ey-work-4097134

not necessarily, it really depends on the underlying quality of the funds that the robo company chooses to invest in

robo's main advantage is low fees and automatic rebalancing + allows you to have a diverse basket of funds with low barrier to entry (don't need to deposit hundreds/thousands each time) because usually they can allocate fractional shares/units, that's about it

the probability of positive/negative, it depends on what the financial strategy of the management team, if they pick bad funds to invest in you'll also get bad or no gains

You can use monthly deposit "trick" to make SA automatically allocate your deposit no matter how often you send JomPay, provided each JomPay transfer is the same amount as the monthly deposit you set.

In the below example, I sent RM200 3 times 3 times this month, and each time SA distributees the RM200 according to setting in my monthly deposit order:

Dollar Cost Averaging. It's an investment strategy where instead of giving one large lump sum, you invest a fixed amount of money on a fixed schedule (weekly/monthly/every few months)

It's a way to minimise risk/losses because you aren't trying to time the market, you invest money regardless of whether it's high or low, in long run it averages out because you'll sometimes buy high sometimes buy low.

It's useful for people who are scared of committing a large sum and don't trust their own ability to buy at the right time.

Because StashAway is not instantaneous trading (when you deposit money they'll only execute buy order days later), it's recommended for new investors to DCA unless they're confident about being able to guess when StashAway executes buy orders.

Quite normal for first few months, market volatility+foreign currency exchange rate will make graph very bouncy.

Once you stay long enough to gather enough dividends (I think most if not all of the ETFs in SAMY pay dividends) then it'll stay mostly green unless market crashing like last year pandemic March 2020 global lockdown hahaha

Nett gains from compound dividends eventually pay off my management fees and still give me profit. Anyway by the time the dividends reach me as end user, it's already taxed, so I'm calculating based on what i get, not what it is before tax. https://www.stashaway.my/faq/115010107948-d...ends-get-taxed/

After that in long run the units appreciate in value (capital gains) which increases my investments' value. I'm a buy and hold kind of investor who's here for long run, not quick trade gains. My non-SA portfolio is primarily dividend-paying stocks, for example

Maybe I'm just not the kind to be that calculative, but if SA can (and already has) beat EPF gains after tax, I'm more than happy already, and I don't have the time or energy to buy "cheaper" through DIY

If that 30% tax is too much for you, feel free to invest elsewhere. Plenty of other options which "more bang for buck".

This post has been edited by DragonReine: Apr 23 2021, 09:08 PM

Oh no, I get your issues with tax efficiency, but as mentioned in the link tax efficiency shouldn't the only factor to consider for performance. I understand what SA aims to do with their choices of ETFs and I'm ok with that, even if it's not great tax wise.

https://www.stashaway.sg/r/etf-taxes-return...tracking-errors