Robo Investing - too good to be true?

Thrugelmir

bigadaj wrote: »

Stock markets are at highs but as above where else are you going to keep large amounts of capital, cash will be eroded by inflation, bonds are in bubble territory, much property is very much over priced etc

It's a reasonable argument to make that you prefer active fund management over passive, teh sensible view is probably both have their place, especially in different markets and/ or sectors, but you seem to think that lifestratgey and multi index are active funds, they aren't. Multi index has a little more discretion but is still a long way from being an active fund, in the manner of fund smith or a huge number of others. Compared to the fund of funds options then the robo options only really save a stage in the process, using a set if questions to ascribe a risk rating rather than leaving teh investor determine their own.

However we live in a world where companies can raise cheap debt by issuing bonds. (With Central Banks being major buyers of same). Then use the proceeds to buy back their own shares. Given most executive and company share schemes operate on an EPS mechanism. The prophecy becomes self fulfilling. Though in reality the genuine growth is very low. While investors remained focused on the share price.

elephantrosie

hey guys.. i joined wealthify for the cashback too. i have transferred 250 quids to wealthify and can see it on my account.. but all of them are in the form of cash.
when does wealthify start investing my money?

elephantrosie

btw, i have also set my investment risk on wealthify to cautious.

jamesd

moneyfoolish wrote: »

Will you be able to get a decent rate with one of these P2P ISAs if you merely want to put money into a 1 or 3 year deal and forget about it?

Yes with BondMason. With the others you would need to do something to reinvest or withdraw the income. In general you're not tied in to a particular term provided a willing buyer is available and one usually is. So not entirely hands-off but also not particularly hard or time-consuming.

fiisch

Thanks for the advice chaps. What I'm reading seems to suggest proceed with extreme caution, and certainly don't put all my eggs in the robo investment basket! I'm very reluctant to use an IFA - I simply don't have a big enough portfolio to justify it (they'd probably laugh me out the office), plus what I have read suggests a "robo" account could easily out-perform an IFA.


I've opened an account with Moneyfarm and am loving the app - checking yesterday's performance is the first thing I do when I wake up.

About to take a big drop in salary (going permanent having worked as a contractor for a spell), so monthly contribution will go down - trying to keep a ratio of approximately 4:1 regular savings to Moneyfarm investment.


Put in an initial £1000 (no cashback), followed by current £250 monthly contributions to take advantage of Pound Cost Averaging. Monthly contributions will drop significantly when I hit £2,000 (probably to around £75 / month plus a few ad-hoc topups). Performance in the first three weeks has peaked at 1.22%, but dropped yesterday back to 0.31%.


Obviously much too early to tell, but will update as time goes by. I'd stress that this is strictly "play money", so I have other savings and am over-paying the mortgage simultaneously (currently £1,250 into savings, £40 monthly overpayments on mortgage). I've already had my portfolio "re-balanced", so would seem the robots are working hard in the background....


If I have enough left over, will also look to open a Bond Mason P2P account later in the year to spread the risk.


Edit - >£10k is 0% cost (just the standard 0.2% management fees). This jumps to 0.6% if over £10k, but this seems reasonable to me? OK, 0.6% on the higher side, but if I hit £10k in a reasonable 3-4 year timescale I wouldn't have any qualms in paying this.


(P.S.: Just in case anyone is wondering, I've no affiliation to Moneyfarm or any other Robo-Investors - just looking to dip my toe in the market, and as an 80s child, obviously the first thing I look for is how many Facebook likes something has......).

JohnRo

fiisch wrote: »

This jumps to 0.6% if over £10k, but this seems reasonable to me?

It is very expensive.

Their cost comparison info-graphic is intentionally misleading.

fiisch

JohnRo wrote: »

It is very expensive.

Their cost comparison info-graphic is intentionally misleading.

I may be being incredibly naïve here, but 0.6% annual charge on £10k equates to £60 / year... right?!


As I'm well under that mark, it's not something I'll need to worry about for a while - might be worthwhile stopping my monthly payments as I draw near, then blasting through the £10k limit when I have a decent amount saved up... or indeed pulling my investment and finding another advisor, but if they're returning 20%, what's 0.6% between friends?!

adindas

DragonQ wrote: »

The T&Cs for the cashback offers are here. I got an email a few days ago confirming that I'm eligible for it and with a link to the T&Cs.

The most interesting and confusing bit is this:

I was told that by putting in £2.5k and then putting in £250 for 10 months, I'd get the cashback after 12 months. Point 7 suggests that'll be 13 months. However, point 8 then suggests you need the whole £5k in the account for 12 months. Point 9 is not clear either - does it mean I can't take the money out in the first 12 months after the initial £2.5k deposit or in the first 12 months after the £5k total is reached??

EDIT: Had a chat with them, turns out the 12 month timer is always from the initial deposit, even if it wasn't the full £5k upfront. Cashback should appear in month 10-11, and can be taken out after month 12.

"This offer is capped at a maximum of 500 funded accounts, "


As I explained it previously, this has all gone on the first day of the offer on MSE ...

So if you invest now, no chance to get the £500 cashback.

DragonQ

adindas wrote: »

"This offer is capped at a maximum of 500 funded accounts, "


As I explained it previously, this has all gone on the first day of the offer on MSE ...

So if you invest now, no chance to get the £500 cashback.

Correct. I was within the 500 as I signed up during the evening after it was announced. The following morning the offer was gone.

vigman

[QUOTE=
For sensible people, there is no point to invest in capital at risk product for the return of lower than 3% where you could still relatively easy to get 2%+ risk free.[/QUOTE]

Please tell me where I can get 2% risk free? There are no ISAs offering this, even 5 year fixes

TIA

Vigman