Should current accounts auto-invest your cash? šŸ¤”

Financial Chat
22

I hate auto invest products tbf, sooner do it myself. Can see the market though for auto invest from plenty of users who didnā€™t really want hands-on.

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23

What happens if thereā€™s a massive crash?

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24

Iā€™m out Iā€™m afraid.

Money in current account and emergency savings account should be minimal risk, not invested IMO.

For money I want to invest I can just move manually to a suitable investment platform or setup a standing order if I want to automate it on payday.

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25

Yep - this is unfortunately unavoidable.
On a fairly cautious fund, split across bonds, cash, equities, fluctuations arenā€™t too aggressive.
Downward movement would have a small effect on the cash you spend in that period.
Our cash is losing -2.2% atm due to inflation anyway :flushed:

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26

ā€“2.2% over a year is a little different to ā€“20% overnight, though, isnā€™t it?

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Invested and growing are not synonyms.

Personally I think this is a terrible idea. Investing your ā€œspareā€ money is one thing, but not money you need to live on day to day.

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29

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Funnily enough this just showed up when scrolling Facebook :joy:

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30

I think robin hood in the US tried that by investing everything into US treasury bonds, but they got prohibited from launching by the regulator.

There is clear separation of funds intended for investment and funds intended for day to day spending. So I am not sure if one can offer it.

I know that wise is doing it, but it is fairly limited especially outside of market hours. I.e. one might not be able to overspend. Or like end up liable for debt generated in case of market crashes.

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31

Yes, Wiseā€™s Assets product is an interesting precedent.
Itā€™s in a fairly aggressive tracker fund so not too appropriate for a normal current account product. Anything that can lose >10% in a month is probably unsuitable for everyday cash.

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32

Yep - expected many to hold this view, and totally understandable :+1:

33

Youā€™d hold a small amount as uninvested cash in order to cover any wild market moves

34

Yep - for this reason a cautious fund would be appropriate. Losses would likely cap at a few %

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35

Iā€™ve googled and canā€™t seem to find this company anywhere :thinking:

36

I didnā€™t even attempt to click the link to be honest, it just showed up. Maybe it was flagged and pulled down for spam

Edit: https://www.zorro.money/

37

I had this genuine issue when a Biotech stock decided to tank for some reason