Asked on 12 Feb 2020
Is Stashaway safe? What are the risks involved in investing with them? What level of experience should I have as an investor before investing with them?
The risk involved depends on your risk appetite. You can adjust the risk you want to take on a specific portfolio. For StashAway, on a more conservative portfolio you can have a minimum of 6.5% downside risk and on a more aggressive portfolio you can have up to 36% downside risk based on personal experience.
Ultimately the algo helps you re-adjust your portfolios as well so its really a hands-off experience. The only level of experience i think one might need is the basic understanding of how robo-advisors work and the basics behind ETFs, so that you won't panic when there are short term losses/fluctuations in your portfolio.
In terms of "safe" i believe most if not all robos have separate custodian accounts where customers' funds are stored, so not much of a risk there. You can explore what others have to say about the different robo-advisors here: https://seedly.sg/reviews/robo-advisors
If you're interested in knowing more, i would recommend this as well: https://seedly.sg/questions/topic/seedlytv-ep04 but some things may have changed since this session last year.
Stashaway user here. Before starting any investment, you should ask yourself besides risks, what is your own mindset and investment philosophy.
i started using stashaway when i have already some investment experience. but I would say it is very suitable for beginners who want to 1) dollar cost average regularly over a few years, 2) wants to invest passively at low costs and 3) with low starting capital (can start investing at $1).
i know will not get Buffett-like returns, but i should get enough to retire comfortably, which is my end goal.
as for risk, the biggest I can see is market risk. As stashaway invests in ETF, there might be case whereby markets do not recover for many years. But, then, this risk is somewhat mitigated by diversifying in various markets.
All investment carries risk. Even bank can collapse, insurance company can have mismanagement and fraud. I would also suggest that you can attend stashaway beginner workshops and understand their investment philosophy before deciding if they are a good fit for you.
I think Stashaway is suitable for beginners and they have questionnaire for u to assess yr risk appetite to decide yr portfolio.
If u r really conservative person, u can start with a more conservative portfolio and adjust along the way when u gain more experience.