Thursday, July 20, 2017

Why do I not invest with robo-advisors

By the way, I was inspired by this post from Finance Smiths.

Wow, shocking title, isn't it?

From the same shill that peddled why robos are so awesome? What has changed? Why the sell out?

Let me assure you, it has nothing to do with robos themselves per se. I have been watching both Smartly and StashAway come to market (StashAway is doing a way better job at marketing and acquisition imo).

I think both of them look great and it is definitely a step-up from the shitty offers that traditional financial institutes offer.

And I still stand by my entire article that robos are excellent.

But.

But what?

But I think the timing is off. The product is great, but the timing is off.

I know that DCA is supposed to remove time from the equation, but for me diversifying and deploying capital into the markets even through a smart way like robos is still not good enough for me.

Perhaps it is because I am in the camp that every single freaking thing is bloody expensive, or because I walk around with a tinfoil hat warning about financial armegeddon, but I really don't think that anything in particular is a good buy.

And this isn't me just being contrarian for fun. This is me looking at the context of where asset prices are and what are the risks and rewards in all these trades.

Unfortunately, I don't really see much upside to almost anything.

Pfft, even with my pretty decent track record (my SGX portfolio's money weighted return has outperfomed the STI by almost 7.85% in absolute returns, and yes I included the dividends), I am very suspect about the future returns of a lot of stocks in Singapore.

So pray tell, what does GMGH invest in then?

Honestly?

Plenty of cash. This is my war chest to help relieve desperate sellers of firesale assets, hopefully sometime in the near future. Over-exposed to risk assets? We might trade in the future!

Gold, silver and cryptos. These are my low-beta investments, invested on the basis that they are going to be worth a lot, a lot more in the future. Sure, they have no cash flow. But hey, I heard people can flip Taylor Swift tickets for some good profits. Next greater fool theory still, isn't it? My time horizon just happens to be longer and the asset that I'm hoarding is different.

Sometimes I wonder why I've wandered so far out to the fringes. But once you've seen the Matrix, you know just how deep the rabbit hole goes.

3 comments:

  1. Ok, the title of your blog should read "Why i do not invest coz wrong timing".

    ReplyDelete
    Replies
    1. Just some clickbait titles every once in a while XD

      Delete
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    ReplyDelete

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