Is a micro-investment app right for you?

micro-investment app

Micro investment apps have become extremely popular over the last few years, and many Australians are turning to these apps as a quasi savings account.

If during the recent stock market turmoil you’ve been confused by sayings like “bear market”, “moving average” or “resistance” and “support” then don’t feel bad. The market is a confusing and complicated place, but investing doesn’t have to be. 

Chances are, you think that investing will be good for your long-term financial situation, but you don’t want to do any crazy analysis, and you don’t want to put in a lot of money. Well, getting a micro investment app in Australia is easy, and there are a few options out there for you, we’ll discuss what option is best depending on what you want to invest in, later on.

What is “micro investing”?

Micro investing is when you take very small amounts of money, sometimes even rounding up your purchases to the nearest dollar, and use that money to invest in stocks.

Typically, micro investors have a particular time and amount they invest, such as $25 every second Tuesday, although it can be more than this.

As stocks are typically more expensive than $25, (1 share of Apple is around AUD $200 for example) micro investing platforms usually allow users to invest in fractional shares, i.e., a fraction of a share, or a product which has exposure to the price of stocks, like an ETF.

Is micro investing right for me?

Micro investing is great if you want exposure to the market with the least amount of risk possible, you don’t want to try timing the market, (or doing any crazy analysis) and you’re investing for the long term.

Of course, investing is inherently risky, so investing a small amount each time, an amount you can afford to lose, is great at minimizing downside in case the market goes through a slump.

Investing often, and in little amounts, is a long term trading strategy known as dollar cost averaging, it allows an investor to average out their investment over time, and not attempt to time the market, which has a higher chance of causing losses.

What micro-investment apps are in Australia?

Below are the top 3 micro investment apps you should consider.

Bamboo – most popular crypto micro investment app

Connecting your bank account with Bamboo allows the app to view your transactions and round them up to the nearest dollar to invest in Bitcoin, Ethereum, and also, gold and silver, a mix of which you can choose for yourself.

Say you buy a coffee for $2.50, Bamboo will round up your purchase to $3 and use the 50 cents to invest in your portfolio, you can also choose to make your own contributions, such as $50 every fortnight.

Raiz – widely used for beginner investors

Raiz works similarly to Bamboo, in that it can round up your purchases, and will invest it into an assortment of Exchange Traded Funds (ETFs) based on how much risk you wish to take on with your investment.

Raiz has 7 different portfolios based on what risk you want to expose yourself to, from “Conservative” to “Aggressive”, with varying exposure to different markets and stocks.

Spaceship – investing into a managed portfolio

Spaceship doesn’t round up spare change, instead you would allocate a set amount at a set time interval. Spaceship has 3 portfolios to select from, all of which are managed by the company to ensure the portfolio remains “balanced, meaning it readjusts to ensure the best growth possible.