Why is my Stashaway account in negative returns now. Do they not rebalance for us. Anyone withdrawn yet? - Seedly

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Asked by Anonymous

Asked on 21 Dec 2018

Why is my Stashaway account in negative returns now. Do they not rebalance for us. Anyone withdrawn yet?

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Answers (14)

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Loh Tat Tian
Loh Tat Tian
Level 6. Master
Updated on 07 Jun 2019

A lot of people are in the red now.

I agree with the Nicholas and Yang Teng. I'm comtemplating to increase my monthly contribution precisely because the market is falling (this is a method done called, dollar cost averaging).

The method works because we anticipate all these indexes to rise again after a few years. But never, ever DCA into a stock, unless you are sure it will not bankrupt and will rise again as a superstock.

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Shaun Goh
Shaun Goh

18 Apr 2019

Does the outcome of increasing your monthly contribution depend on what risk profile your portfolio is set to? I suppose, increasing contributions to a portfolio with higher ratio of equities to bonds would benefit more when equity prices are falling?
Loh Tat Tian
Loh Tat Tian

14 May 2019

Yes definitely. In fact, on the stashaway app, you can clearly see which index are bought and sold based on your risk profile. Higher risk profile means more standard deviation risk and also more equities. So yes, I benefitted from the drop (when everyone is losing money).

If you are going to withdraw your money every time your investments gets negative, you should not invest in stocks. Stocks are volatile. If you cannot handle the volatility of stocks which are very common, you will just keep buying at high price and selling at low price which is going to make you lose even more money. You will carry on to do the same thing which is buying with stashaway because market doing good and selling it because market doing bad.

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Gabriel Tham
Gabriel Tham, Kenichi Tag Team Member at Tag Team
Level 8. Wizard
Updated on 07 Jun 2019

The key to dollar cost averaging an index ETF portfolio is to ride the up and down without market timing. Just continue funding and do not panic.

Rebalacing is not going to give you instant riches. Maybe your expectations of a robo was wrong as they are not a sure win money machine.

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Shaun Goh
Shaun Goh

23 May 2019

What about switching to lower risk levels (higher bonds, less equities) if you foresee an impending stock market downturn? Would that be akin to taking profit and reallocating to more downturn-proof assets?
Gabriel Tham
Gabriel Tham

23 May 2019

That would be the ideal if we could perfectly time the market. And this itself is the holy grail of investing, everyone wants to buy at the bottom and sell at the top, even the experts cannot do it accurately. 7 years after 2008-09 is where many predicted a crash because most bull runs are 7 years. Now its 10 years already, no one knows when it comes.
John Smiths
John Smiths
Level 3. Wonderkid
Answered on 23 Dec 2018

If you started investing with StashAway anytime in the past year, it's likely your account will be in negative returns now. The point of rebalancing is not to prevent negative returns. And it's a bad time to withdraw especially when your account is in negative returns.

I reckon you should have a more detailed read of the StashAway website and the various explanations of what you are actually investing in. It sounds like you have little idea of what your robo-advisor account investing is supposed to do!

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Kishor Bhagwat
Kishor Bhagwat
Level 4. Prodigy
Answered on 23 Dec 2018

Here are a few simple rules: 1.if you dont know why you own something in the portfolio and in that percentage, your strategy is called Hope. 2.Hope has no thresholds, so anytime is a good time to buy and sell. 3.More seriously, rebalancing is different from market timing. Rebalancing is a way to book intermediate profits by selling assets that have gained and buying assets that have lost. The key thing to remember is that you still believe that the assets in your portfolio are ones you want to live with. 4.Your strategic asset allocation doesnt change in rebalancing, but you may have a tactical tilt due to your reading of macroeconomic factors. 5.Remember to calculate the correlations and annualised volatility of your portfolio. That way, you have a sense of what is unprecedented volatility and what is expected volatility. 6.i dont do roboadvisors myself (i like to have control) but you still need to know what you own, what factors are favorable and not favorable to your allocation and what volatility is the portfolio aiming for. 7. If you are so worried about annual returns, you should be investing with an annual horizon. Your hit rate is going to be the same as a coin toss.

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Yong Kah Hwee
Yong Kah Hwee
Level 6. Master
Answered on 23 Dec 2018

Why do you want to withdraw? It is only paper loss now. If you withdraw, it becomes realised loss! Robo-advisors are not a sure way to get positive returns. The market has ups and downs. If you cannot sit tight and go through all the volatility while doing dollar cost averaging, you should consider putting your money elsewhere, such as FDs.

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Lok Yang Teng
Lok Yang Teng
Level 6. Master
Answered on 21 Dec 2018

Markets globally is sinking due to many geopolitcal reasons. In short, most investments are not going to provide positive/significant returns. Since Stashaway functions like ETF, you should still invest montly regardless of market condition.

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Anonoz Chong
Anonoz Chong
Level 2. Rookie
Updated on 26 Dec 2018

Everytime you deposit, they rebalance your portfolio by buying more of the underperforming assets. I guess they will only sell the overperforming one if you haven’t deposit for long time and the performance disparity is too great to ignore.

BTW if you either withdraw or dial down ur risk level now, you will realize the loss. If you have faith in stock market going back up in few years, you should deposit even more cash in.

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Lee Jiahui
Lee Jiahui
Level 5. Genius
Answered on 23 Dec 2018

You know why it's negative? There are more sellers than buyers.

Buy when there is fear.

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I'm worried for you, after reading your question. Rebalancing will not prevent any one from losing money in a market downturn. Every long term investor is losing money now, including Warren whom many people consider as god of investing. The only people making money now are probably those very good traders. Hey, but please don't simply switching to trading after reading this! You are likely to lose even more money trading.

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Bang Hong
Bang Hong
Level 4. Prodigy
Answered on 06 Jun 2019

Times are bad, even some Bonds are in red.

Please revisit your idea or thoughts when you buy into StashAway, what is your risk index and what is your time horizon?

I need to say and emphasis do not panic, panic sell is one of the worse-off most of the time. Stashaway have auto-rebalance.

Yes I had withdrew before, takes 2-5 working days most of the time. Other things to say are covered by other answers!

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Leon Heng
Leon Heng
Level 2. Rookie
Updated on 25 May 2019

Nope I am making a profit now. I deposit a few hundred every now and then at random.

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Kenneth Chan
Kenneth Chan
Level 3. Wonderkid
Updated on 25 Jul 2019

The thing is that robo-advisors do not have much historical data to work with, but if they are following the idea of funds with long term returns, you should be looking at at least 10 years for any meaningful gains.

2 comments

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Hariz Arthur Maloy
Hariz Arthur Maloy

30 May 2019

What do you mean when you say they are like mutual funds? Do you mean like they are active fund managers just trading ETF as an underlying security other than just individual stocks and shares?
Kenneth Chan
Kenneth Chan

25 Jul 2019

As in the idea of funds, index, or robo-advisors are primarily to generate returns over longer time horizon so it's not meaningful to look at it after months and worry about the loss.
Gabriel Lee
Gabriel Lee
Level 6. Master
Answered on 26 Dec 2018

As many have shared, most people are in the red now including mine. I quote from sonicericsg, "When you trade long term through dollar cost averaging, no need to worry about the red"

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