Earlier this year we launched the Stockspot portfolio app. Thousands of clients have already been enjoying the Stockspot app experience so we thought we’d spread the word further and share some of its key features.
This week we’re excited to share that Stockspot turns 4!
Here’s a quick look back at where we’ve come..
Helping Australians reach their potential
Since Stockspot launched in 2014 I’m delighted we’ve been able to help thousands of Australians invest to get closer to the life they want to be living.
We’ve seen clients who have been able to fund all sorts of aspirations, including buying first homes (including one houseboat!), travelling, home renovations, take career breaks, buy a car, pay for school fees and retire.
We’re pleased to provide our 3½ year performance update and explain some portfolio changes we’re making to reduce risk and keep the Stockspot portfolios in line with client goals.
This update will cover:
Our approach to reviewing the asset allocations
Changes to the portfolios and why we’re making them
Friday afternoon drinks in the Stockspot office has been taken up a notch now that we’ve got a resident wine connoisseur working with us. Sarah is our Head of Client Care and also a massive yoga fan.
We’ve challenged Sarah to tackle her passions at the same time – attempt an upside-down yoga pose while sipping wine in-between answering client queries.
There’s a birthday celebration in the Stockspot office and as the cake is brought out, you notice someone’s eyes suddenly light up. No, it’s not the birthday boy or girl – but the president of the Stockspot cake appreciation club (also our Head of Communications and PR) Lauren.
Like many Aussies, Lauren spent part of her years living in London and shares the reason why Australia will always be home.
Tell us a bit about yourself
I grew up in Canberra and moved to London in my early 20s to do the working holiday thing and stayed for over 10 years. Now I’m living in Sydney and appreciating the mild winters and the amazing sunshine.
Stockspot has a set of principles that guide how we advise clients and invest their savings. This is our DNA and what sets us apart from other products and investment managers.
The importance of compounding returns
Market timing or picking the right stocks is almost impossible to do consistently, even for experts. It is far more important to be invested for a sensible amount of time across a broad range of different investments.
The assets you’re invested in determines 89% of your returns. Therefore the investment strategies we recommend are designed to weather different market conditions by combining assets in the best possible combination based on your personal financial goals and situation.
We focus on helping clients achieve long term compounding returns without needing to time the market or pick individual stocks.
This month marks the third anniversary since we started investing for clients. We’re humbled to have the opportunity to help thousands of Australians grow their savings every day.
Today our clients range from 18 to 80. They come from Alice Springs in the centre to Kalgoorlie in the west, Swansea down south in Tasmania and Townsville in North Queensland.
As we promised on day one, our investment philosophy and strategy haven’t strayed. Rather than trying to time the market or pick stocks (an expensive and dangerous endeavour), we’ve generated our consistent returns with a strategy based on decades of evidence and by not changing course.
We strongly believe that the most sensible investment advice for most people is to avoid trying pick winners, invest in a broad mix of assets, keep your costs low, rebalance occasionally to reduce risk and don’t worry about what happens in the short term because it’s meaningless noise.
He’s a cricket fanatic and father of 3 up-and-coming sport stars. Meet Matt – our Head of Operations.
Like a few of us at Stockspot, Matt escaped the corporate banking world to help build a new modern investment service. He reckons not being stuck in endless meetings and getting stuff done is the way forward – we think so too!
It’s been 21 years since I made my first investment on January 1st 1996. At the time I was 10 years old. Not your standard primary school hobby.
I was sport obsessed and starting to realise girls weren’t as annoying as I thought, but for some reason I quickly became fascinated by what made share prices go up and down.
Neither of my parents worked in finance but I was lucky that my dad had some shares in his self managed super fund and decided to teach me and my brother some of the basics. He let us choose a stock from the newspaper and gave us $1,000 (which later, to my dismay, I found out was only theoretical).
I had a few stock market wins, a few losses and I was hooked!
I kept a diary of every investment I made between 1996 and 1999 which I still have today. It looks more like a colouring-in book than a trading diary because I gave each stock a different set of colours – but in it I kept track of my running profit or loss, dividends and company news cutouts.
When you invest with Stockspot, you sign-up online and answer some questions about your financial goals and personal circumstances, then you’re asked to review and sign an MDA Agreement before you can invest.
At this point, you ask yourself what is an MDA Agreement and what exactly am I tying myself into?
A good question you should ask before using any financial product is how exactly does the product work, is it the best product for me and is my money safe?
Here’s what a MDA service is, how your money is secured and why we think our MDA is the best way for many people invest.
Back in 2013 I left my job as a portfolio manager to start a better wealth management service for Australians. It’s hard to believe Stockspot has now been up and running almost 3 years.
It is something I am immensely proud of and I want to thank the thousands of clients who have been on the journey with us. In 2014 when we launched, automated investing and robo-advice were new in Australia so we appreciate the support of our early clients who trusted us to help manage their savings.
We’ve generated annualised net returns for those early clients of 6.2% to 9.2% per year with much lower fees than traditional managed fund options. At the same time our portfolios have been much less risky than just owning Australian shares.
We’re also thankful to the 22,000 people who have subscribed to our newsletter for our monthly investment insights. And none of it could happen without the tireless effort of the Stockspot team.
It’s 30 degrees outside, the siren calls of delicious gelato are getting louder, the beach is on everyone’s mind in the Stockspot office, everyone’s that is, except for one person…
Enter Alice. Awesome snowboarder, adventure sports obsessed, epic coder and our resident front-end developer (the person who make things look good). Her advice to anyone considering a career as a developer – be passionate and write excellent code. Sounds spot on to us!
Stockspot has been offering internships to uni students over the past year to help develop future industry talent outside of traditional career paths. We want to give students the opportunity to broaden their experience through working in a fintech start-up.
In this edition of ‘meet the team’, we speak with our young blooded intern Mason.
Clients sometimes ask us how we built the Stockspot portfolios, and why we selected 5 assets to invest in rather than 2, 3 or 10!
It comes down to the purpose of the Stockspot portfolios which is to maximise returns for each level of risk. Five assets allows us to give clients the best possible combination of returns, risk and costs.
To do this we leverage the benefits of diversification. Diversification simply means that by combining investments with different characteristics you can improve the quality of returns in your portfolio.
Quality of returns is measured by how much risk you need to take to earn a certain return. Since all investing involves taking some risk, the aim is to minimise the risk you need to take to earn the return you want. Diversification across assets enables you to take less risk to earn better returns.
Thanks to the thousands of clients who have been on the journey with us since Stockspot launched to the public in May 2014, exactly 2 years ago. Back in 2014, automated investing, robo advice and fintech weren’t as well understood as they are today so we appreciate the support of our clients who have trusted us to help manage their savings.
Despite the recent share market volatility, the Stockspot model portfolios generated 4% to 4.5% p.a. in total returns over the 2 years to 30th April 2016.
The performance was more than double the 1.5% p.a. return from indexed Australian shares over the same period. Distributions and dividends made up most of the performance since it was a subdued period for capital returns.
Stockspot model portfolios: 2 year performance after fees
|Total return p.a.||Distributions p.a.|
Total return after ETF and management fees (1st May 2014 – 30th April 2016)
What do boardgames, brewing beer and The Badseeds have in common? They all help our Senior Software Engineer Stu unwind when he’s not developing the technology that powers Stockspot.
In this edition of ‘Meet the team’, we also discover some of the strange things you see when you commute 3 hours a day by train.
The most important decision when investing is choosing how much to invest in each asset class. For that reason it’s of utmost importance that investors don’t take on too much (or too little) risk in any one asset. Closely monitoring each asset relative to the size of your portfolio, and rebalancing when necessary, helps to optimise long-term performance and reduce risk.
Building on this philosophy, we’re excited to now offer the ability for qualifying clients to further personalise their strategy with investment themes.
Stockspot Themes gives you more control over your choice of investments, while still ensuring that your investment strategy is continually optimised by Stockspot based on your investment goals and risk profile.
Here at Stockspot, we have been actively campaigning against high fees, kickbacks and conflicts of interest in the financial services industry. We believe there should be greater transparency around where fees are going, and better alignment between advisers and their clients.
Over the past 6 months, we ran our Investing Without The Fat Cats campaign to highlight how Stockspot is different to other financial firms, and shine a spotlight on products that are under-delivering for customers. The research we did as part of the campaign uncovered that many traditional products and services charge layers of hidden fees and commissions that are unnecessarily eating away at investment returns.
As the campaign comes to an end, we reflect on some of the highlights and even some controversies.
The Stockspot ETF model portfolios comprise of underlying investments in over 1,400 shares and bonds from Australia and around the world.
We spread our clients’ portfolios across thousands of stocks to help reduce risk and balance out companies having inevitable bad years with others doing well. This has helped the Stockspot model portfolios significantly outperform broad Australian shares over the past 12 and 18 months.
We take a look into how the investments are spread across regions, sectors and individual holdings to help our clients achieve their goals.
Contrary to popular belief, there are no high-profile robots working at Stockspot. We’re yet to snag R2-D2 or T-1000 to manage the portfolios between films. Instead we have Alan who heads up Product Development – quietly doing the work that these mythic robots get the credit for.
Alan is in charge of designing and building the technology that helps our clients invest safely, as well as monitor and optimise the strategies. In this edition of ‘meet the team’ we investigate whether he is man or machine.
The Stockspot portfolios generated positive returns over the 12 months to December, and demonstrated lower risk than a broad portfolio of Australian shares over that time.
Most of the positive price performance came between January and April, before troubles in Greece and China dragged markets lower by 10% to 15%. It has been great to see many of our clients using the market dips this year as a good opportunity to top-up their portfolios and take advantage of lower prices. When markets return to their long-term uptrend, those who have been slowly adding to their investments will see the greatest impact.