StashAway 2020 Review — Investing For Beginners
I lost money since I started using StashAway as my wealth management platform on Jan 2020. Should I continue to use them?
I started using StashAway on Jan 2020 and here’s my review on my experience so far.
TL;DR I earned $310 in Feb 2020 on $19,000 investment. And immediately in Mar, I lost $2,484.95 so far with a $20,550 deposit. Roughly -12.09% of my investment. This is because of the current health crisis of Covid-19 together and oil price war that has made the overall economic conditions weak.
Even though I have lost money, I will continue to use StashAway as a platform since it’s an easy way to invest and I am looking at a longer investment time horizon which will allow the markets to recover.
Update on 6 Jan 2021, my returns after a year of investing with StashAway.
What is StashAway?
It is an investment company that is founded in Singapore where they manage your wealth in hopes that you can increase your net worth. So instead of placing your money into a bank (where your interest earned is so pathetically low), investing in funds would potentially allow you to have higher returns and make more money! The platform is also available in Malaysia.
Ideally.
Unfortunately, the catch is, with higher returns, there are also risks involved. Because investing in such products is also tagged to the performance of the financial market. At this time of writing, it is a bear market right now and the markets are bleeding!
What I liked about StashAway
What I like about StashAway is that it is so easy to use. The user interface is simple and not complicated at all. I find it easy to transfer money in and out of the account. With StashAway, I mostly manage my account via the app that they have designed.
Mostly, it is a passive kind of investment that will benefit the following types of people:
- Lazy people
- People who don’t want to understand too much into the specifics of investing in equities, bonds and how much they should allocate
- Looking for an alternative way to put your money instead of the bank
Once upon a time ago, the only way I thought I could invest my money and grow is by using endowment plans offered by insurance. But now, I feel like I want to have a more flexible way to manage my money. Because once you have committed into endowment plans, you need to be consistent. It might work for some people. But for me, I prefer the flexibility and also having a bigger potential upside compared to a limited and locked endowment plan.
My Portfolio
Anyways, let’s discuss the returns and what kind of portfolio I have with StashAway. I have the following:
It consists of 3 accounts:
- General Investing
- Income
- Cash Management
Please note that Risk Index is not how much you earn but it is how much you might potentially lose. Here is a more detailed explanation by StashAway.
Portfolio Performance (Jan — Mar 2020)
This is how my portfolio had performed so far.
I started my account on 5th Jan and deposited $10,000 for income portfolio, thereafter some small amounts in late Jan and then another $8,000 on 17 Feb.
On 19 Feb, my portfolio return was $310! It was quite good to imagine getting such returns every month. Except, all started to go downhill since 10 March.
So far I have lost -$2,484.95 so far with a $20,550 deposit. Roughly 12.09% of my investment. Ouch!
As an investor, I think most people would panic and be upset about losing that amount of money. But remember, investing is a long term process. Markets would go up and down and eventually, it will go up.
This is the S&P index which is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.
I guess on the bright side, if I wait till 20 years later and reinvest $750 every month into General Investing, I will potentially get an additional $90k on top of my investment of $182k.
General Investing Portfolio projection based on monthly $750 contribution.
Income Portfolio projection with $10,000 investment without any additional top-ups.
I’m not going to go into StashAway Simple as it is to me, a typical bank account. And so far it netted me $7.96.
In terms of fees that StashAway charges it’s below. They compared it with Unit trust as it is a lower fee. Putting it into context, if you have $20,000 with StashAway, your yearly fee would be roughly $160. Whether is it you gain or lose your money.
I guess in a good month in early Feb when I had netted $310, I’ll be able to afford the yearly fee. But if I’m making losses, then it’s hard. So we can only be able to see how much you potentially can profit over a period of time. This kind of investing is not short term. We are looking at a minimum of 5 years.
In another couple of months time, once the market has slowly recovered, I’ll be able to give an update on the performance of my StashAway portfolio. I hope by then I’ll have better news to share.
If you would like to try out StashAway, you and I can get up to $10,000 SGD managed for free for 6 months if you use my referral link!
