Would you recommend investing with a robo-advisor or investing into ETFs for a beginner? Why? - Seedly
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Anonymous

Asked on 17 Jun 2020

Would you recommend investing with a robo-advisor or investing into ETFs for a beginner? Why?

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Andy Chan
Andy Chan
Level 5. Genius
Answered on 17 Jun 2020

Roboadvisors.

  1. Instantly diversify between stocks and bonds (and gold for some).

  2. Don't need to choose your ETF, just your risk level.

  3. Cheaper to use roboadvisors if you're looking to invest in multiple ETFs.

If you're new to investing and you're not sure how to select an ETF, roboadvisors would be a good place to start. I recommend Stashaway (if you have less than 3k) or Autowealth (if you have more than 3k) because the options are simple, straightforward and less intimidating. Syfe has a global portfolio you can also consider.

Hope this helps!

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Chen Zhirong
Chen Zhirong

23 Jun 2020

^ you don't really learn from picking an ETF either. Robos mostly re-balance their choice of ETFs. You learn from stock picking mostly and that leads to a lot of burnt fingers. So actually I think the idea of learning from putting your money is a strawman because you should learn from virtual/paper investing rather than losing money.
Andy Chan
Andy Chan

23 Jun 2020

I think that is debatable. There is such a thing as bad ETFs. If and when you want to pick your own ETFs for a permanent portfolio, you will need to learn how to pick the right ETFs to spread your risk. I'm not really sure what is the strawman argument you're referring to, but I think there is some value in putting actual money (that you can afford to lose) into relatively less risky assets such as ETFs precisely so that you can learn from the emotional tugs you'll experience when the value of your investment fluctuates. Based on past financial crises, it is clear that our own fear and greed are our biggest enemies, and we need to learn how to manage these emotions, something that virtual money may fail to teach. This is also assuming that one has already done his/her fundamental analysis in the securities he/she is investing in.
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DC
d c
Level 5. Genius
Answered on 18 Jun 2020

I'm a beginner as well and I chose investing with a robo-advisor!

Using a robo-advisor is very easy and fuss-free! You can deposit any amount you want, anytime. Furthermore, it is a form of passive investing where you just leave your funds there and let it do it's magic. It's also pretty diversified.

However, you cannot choose the specific companies you want to invest in as they are chosen by the robo-advisor.

Overall, it's still a pretty good platform to start your investment journey!

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Jay Hou
Jay Hou

19 Jun 2020

Some co. Allow u to some customisation if u wish to pick your own etfs/reits etc.... not stashawy though- ref to some sharings here : https://www.facebook.com/1554909571415562/posts/2572372023002640/?d=n https://seedly.sg/reviews/robo-advisors/syfe?rid=12013&utm_source=review_share&utm_medium=internal
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Woo
Woo
Level 4. Prodigy
Answered on 18 Jun 2020

+1 robo advisor.

Can start with minimal $1, can set up auto invest every month, can choose to auto reinvest dividends.

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Yh.lens
Yh.lens
Level 6. Master
Answered on 28 Jun 2020

TBH, why not do both? Robos don't exactly offer you the exact ETF you are looking for, and more often than not, they have their own constructed asset allocation which may or may not be what you're looking for. However, you can see robo as the professional segment of your investments. And then DIY and buy ETFs of your choice, but make sure you don't overlap if not you are being redundant. For myself, I have my own DIY portfolio as well as a Robo segment. Hope it helps!

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Tan Wei Ming
Tan Wei Ming
Level 7. Grand Master
Answered on 28 Jun 2020

I believe that both strategies are the same in the sense that they use the same financial product which is ETF. I would recommend investing with a robo-advisor because for beginners, they may not know what ETFs to buy. Should I buy STI ETF or S&P500 ETF or World Stock ETF or which sector ETF to get the most gains etc. With robo-advisor, they will properly allocate those ETFs that has potential because there's always one professional behind this robo-advisor running those algorithms.

So if you know what ETF to buy, I would recommend doing DIY ETF RSP through FSMOne's ETF RSP or IBKR (for ireland domiciled etf).

However, please bear in mind that you might incur more costs if you want to buy a lot of ETFs compared to robo advisor where they charge you by AUMs. Therefore, to me, I would choose a World Stock ETF to invest in so that almost all aspects of the stocks are covered in one ETF and thus saving cost.

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered on 17 Jun 2020

DIY investing into large & cheap & well diversified (globally) passive indexing ETFs with a cheap online broker.

more here:

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy

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