It’s been a long wait but the returns after fees on our SG robo-advisors (Smartly and StashAway) accounts are finally in the negative territory consistently. The net amounts are hovering around less than 5% after accounting for dividends, funds performance and currency impact. I’m saying this with a sense of relief because my Smartly and StashAway investment strategy of dollar-cost averaging every month and value-cost averaging when the markets dip now has a higher chance of working out.
As a heavy net buyer of ETFs every month with salary income and no capital withdrawals, I prefer equity markets to be less expensive when I buy in. Market dips and crashes just mean I get more value for our money. I have been slowly increasing our automated monthly investment amounts in the various bank monthly investment plans and robo-advisor accounts. I do this every time I see consistent negative returns on them.
Essentially, that’s how I ensure I’m averaging downwards over time, by taking advantage of negative returns. This is important for my dollar-cost averaging and value-cost averaging investment strategy to work favourably in the mid to long term. I don’t do lump-sum investing because it requires me to take an immediate risk with a large amount of money. I prefer an income-linked investing strategy where I take a proportionate amount of risk with the amount of money I earn every month.
While this is a disciplined, controlled and measurable way to build wealth. It does not allow for an exponential increase in wealth. Which means patience is the key to our success in this case. The problem is that my wife is impatient and she prefers a faster way to build wealth. This was always going to be an issue for us because of the fundamental differences in our financial personalities. It’s just surfacing now as we get more weary with work and want to see a quicker way out.