Went to the Stashaway ‘Advance’ Seminar to listen to their in depth explanation of their investment strategy. Some of the FAQs I find interesting:
Q1: Considering the market just rebounded, if I have a sum of cash, should I still invest lump sum or spread it out?
Stashaway approximate answer: Have a plan, work out your objectives, time horizon and risk tolerance thru our website questionnaire and the algorithm will guide you thru the options. General recommendation will be to spread it out over 24 months to invest.
My gut reaction: Bro, don’t do market timing! Control your FOMO and invest spare cash according to planned allocation.
Q2: Can I use technical analysis to buy your low risk and high risk funds and switch between them according to my analysis?
Stashaway approximate answer: These are two different things, we prefer you not to do that. Technical analysis is for trading, we use economic indicators to determine when to make adjustments to our portfolio, but technical analysis is not appropriate.
My gut reaction: Dude! Purpose of a portfolio investment is to allow the platform to allocate and switch assets using their algorithm, not make extra switching between them using your instinct. Again control expectations that you are able to time the market and the assumption that you can outsmart it.
One observation I had is that Stashaway attract beginner investors who wanted lower fees. They can be savvy on technical details but when it comes to execution, their emotions are on full-on display.
I don’t particular envy the founder of Stashaway having to explain the basis of a Financial Plan and what ETF can or cannot do. Perhaps the next session there maybe more challenging questions as to the result of their ERAA algorithm and investment philosophy.