Pittwater Life November 2018 Issue


Coming to Your Rescue. Missing 'Link'. Offleash Dog Trial. Wonders of Science. Market Month!

Business Life: Money

Business Life

Good Market reason watch: for taking going

‘nuts’ stock this of ripples festive to season routs

This When month writing we about look at

recent financial falls innovation on local one

and of the global perspectives markets… I

can Ever share since with I’ve you had is anything from the

inside to do with of a fintech investment company

which markets in my – and case that’s has been from

rolling 1987 – out falling the fast-growing


Acorns never seem app. Since to reduce, launching calm,

in diminish, Australia scale-down in early 2016 or the even

app condense. now resides Falling on markets the smart

phones only ever of seem around to 350,000 collapse,

Australians, crash, plummet, that’s nose roughly dive 1.5%

of and the plunge. population. Well, that’s what

they If you’re do according the dark to about the

what media I’m anyway. talking about, Acorns

is a October micro investment has seen a platform return

or of what’s volatility sometimes to local and called a

‘round-up’ global share app, markets the first but one

of it’s its not kind the in first Australia. time this Our

firm year. along Putting with things our partners into

brought context it we out have from seen the three US

in standout 2015 where corrections it had been during

established 2018; the first for a one few started years. in

January The app and works saw in falls a couple of about

of 5%, ways: followed by taking soon a after data with a

feed dip in from March your of spending 5%, and most

accounts recently in and the rounding first weeks up the of

purchases October with you a make fall of to about the

nearest 9%. dollar and investing

these Peak accumulated to trough this balances calendar

into year a our mix share of exchange market traded has

funds traded listed in the on range the ASX, between or,

by 5,724 you in debiting April and amount 6,373 in or

regular August. payment (It is interesting from your to

bank note that account the to ASX your 200 Acorns has

account. never been Most able users to regain enjoy the

its peak value of 6,800 first

achieved in November 2007.)

Looking at likely causes

for this year’s dips, the last

two are fully correlated to

round up feature of Acorns as

it allows them to save while

they spend. As a parent of

teenagers I think I’ve come

to the conclusion that apps

such as Acorns using a blend

of psychology and technology

may be the only effective way

to get modern kids to save

because they sure do know

how to spend.

Acorns works because the

principles underlying its design

interest rate decisions of

the US Federal Reserve. The

first one in January was in

response to a positive US jobs

number and more importantly

signs that wages growth was

gaining momentum, a pointer

are to inflation firmly rooted and ultimately, in behavioural

finance: you guessed investing it, interest small rate

amounts rises. on a regular basis that

won’t Let’s be pause missed to combined remember with

investing that interest over rates an extended in the US

period have only of time recently to average started

into a process the markets of normalisation


out after peaks almost and 10 troughs. years of Of

course accommodative it doesn’t hurt policy. that The it

does reason all the of these US central things bank within

the has framework seen fit to of normalise a highly

rates is that the US economy

is doing exceptionally well

with Gross Domestic Product

increasing at annual rate of

4.1% for the second quarter.

attractive and functional user

interface – fancy words for the

app looks and feels very cool.

While these principles have

proven to be sound over time

Acorns goes on to provide an

indirect benefit to its users

in the form of education and

improved financial literacy.

Get two or more people in the

room who have an account and

you’ll find out what I mean –

when did you start? What are

So, with this latest wave

of volatility came also a

predictable media reaction

and headlines using words

like ‘market rout’. The wealth

editor of one normally

sensible daily national

you newspaper saving for? even What suggested returns

have that investors you had? It’s looking inherently for safe

competitive havens should but consider when it’s cash,

combined gold and hedge with the funds. tools and

information The decision that to the head app for

provides the exits it’s is an also important extremely

informative one investors – as a regular but carries user

you its own can’t costs help if but you become get it

more wrong. informed While there about is the little

behaviour doubt that of markets were whether

you toppy, are especially looking to in or tech not – the

shares, company earnings

have been growing and

economic outlook positive

but as we all know things can

change and change quickly.

with Brian Hrnjak

balance Reading of your the advice Acorns to account move

rises into cash, and falls gold in or line hedge with the

movements funds is frankly in markets bizarre during when

the you course consider of the that trading cash might day.

only One achieve of the challenges between 2% and

any 3%, finance albeit with app certainty. would have Gold

encouraging yields nothing young on top people of to

save introducing and invest currency is to remain and

relevant commodity in their risk eyes. into Over a

the portfolio. past year Hedge a number funds, of well,

enhancements what are hedge have funds? taken Just place

following recently in user Australia feedback, we the have

headline witnessed ones the being: spectacular

Found demise Money of ‘alternative partners asset’ – users

can manager shop online Blue Sky with Alternative brands

such Investments. as Bonds, Earlier Dan Murphy’s, this year

BCF, Warren Uber Buffett etc. and closed these out his

partners decade-long usually million deposit dollar bonus bet

amounts that an index or extra fund round (S & ups P 500

into Index) the would users account; beat a pool of

My hedge Finance funds feature – it did, – uses 125.8%

artificial to 36%. (The intelligence million to went track to

and charity categorise by the way.) spending and

calculate Buffett free was cash quoted flow; on CNN

Super after collecting fund linkages on the – allows bet:

users “Making to make money deposits on the to stock a

range market of does industry not and require public

offer great superannuation intelligence, a degree funds;

Emerald in economics Portfolio a – familiarity a socially

responsible with Wall Street portfolio jargon. option What

introduced investors then following need member instead

feedback; is an ability to both disregard

Little mob fears Acorns – enthusiasms

sub accounts

designed and to focus to allow on a investment few simple

on fundamentals.”

behalf of children or other

dependants If you are under nervous the about age of 18.

the current state of markets

don’t let me get in your way

of going to cash or doing

whatever allows you to sleep

soundly at night; financial

56 50 NOVEMBER DECEMBER 2017 2018

The Local Voice Since 1991

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