When it comes to share market investing, we at Pearler have a core belief: incremental investments in diversified portfolios for the long-term is the best way to build wealth. This strategy is also known as dollar-cost averaging (DCA).

Combining function with philosophy, we built and launched V1 of Autoinvest in early 2019. It was the key feature of our then fledgling platform and the first way everyday Australians could automatically invest in shares and ETFs for the long term.

Now, Automate is our upgraded version of Autoinvest. You can have multiple investment Automations running at once, allowing you to work towards multiple investment goals simultaneously and/or automatically accumulate wealth in a variety of ways.

For example, you could set up one automation that automatically invests a set amount every fortnight from your paycheque towards a Home Deposit. Then you could set another that invests any surplus cash you have at the end of each month in a portfolio dedicated to Financial Independence, or a bougie overseas holiday! You can also do Round-Ups from everyday purchases, too.

Benefits of investing automatically

Financial benefits

1. Mitigation of timing risk: By spreading investments over time, automated investing can reduce the risk of investing a large sum of money at an inopportune time.
2. Cost averaging effect: Automated investing averages the cost of shares and ETFs over time. In fluctuating markets, this means buying more shares when prices are low and fewer when prices are high. This, in turn, lowers the average cost per share over time (which, as we mentioned, is known as dollar-cost averaging ).
3. Harnessing compounding: Regular automated investments in shares & ETFs can potentially enhance the benefits of compounding across long-term investment horizons. As any theoretical dividends and capital gains are reinvested, they can generate their own earnings, which could increase the overall return of the investment.
4. Facilitating regular savings: Automated investing creates a disciplined saving and investing habit. By automating investments, individuals can steadily build their share and ETF holdings.
5. Reduced emotional decision-making: Automating a predetermined plan minimises the emotional aspect of investing. This can potentially lead to better financial decisions, as the strategy avoids the pitfalls of trying to time the market based on emotions or market predictions.

Emotional benefits

1. Reduces investment anxiety: By investing a fixed amount regularly, automated investing can remove the stress and anxiety associated with trying to time the market.
2. Simplifies decision-making: Automated investing streamlines the investment process. Investors don’t need to constantly monitor market conditions or agonise over the "right time" to invest.
3. Can build confidence: For new or inexperienced investors, automated investing provides a straightforward strategy that can build confidence. Seeing your investments grow over time, regardless of market fluctuations, can be encouraging and empowering.
4. Encourages financial discipline: Regularly investing a set amount can instil a habit of saving and investing, which is psychologically rewarding. This disciplined approach can, over the long run, reinforce positive financial behaviours.
5. Reduces the impact of market volatility: For those who are risk-averse or nervous about market swings, automated investing smooths out the volatility. By investing consistently over time, the emotional impact of short-term market dips is lessened.
6. Promotes a long-term perspective: Automated investing aligns well with a long-term investment strategy, which can shift focus away from short-term market movements and news. This, in turn, reduces the temptation to make impulsive decisions based on temporary market conditions.
7. Potentially minimises regret: If the market drops shortly after a large lump-sum investment, an investor might experience regret. Automated, incremental investments help mitigate this feeling, as not all capital is invested at once. Conversely, if the market rises after investing, the knowledge that regular investments are ongoing can reduce feelings of having “missed out.”

Time benefits

1. Time efficiency in investment management: Automated investing can simplify the investment process. Once set up, it requires little ongoing management or monitoring. This is a significant time-saver, especially for those who do not wish to spend hours analysing the market.
2. Reduction in market monitoring: Automated investing reduces the need for frequent market analysis and timing decisions. Investors don't need to continuously watch market fluctuations to decide when to invest, saving you considerable time and attention.
3. Automated transactions: Investments happening seamlessly at regular intervals without any additional input from the investor save significant time.
4. Ease of budgeting and planning: Regular, predictable investment amounts can make financial planning easier. Investors can set their investment contributions in line with their budget, reducing the time needed to adjust investment amounts continually.
5. Consistency leading to routine: The regularity of DCA can establish a routine, which often takes less mental and temporal bandwidth compared to constantly changing strategies or sporadic investing.

How to automatically invest using Pearler

If you're feeling game to start automatically investing, here's how you can set it up on Pearler.

To start, simply select how you want to deposit money into Pearler.

Then select how much and how often you want to invest.

Next, choose how you’d like to invest.

Choose your portfolio…

…and finally, select your strategy!

Conclusion

Automated investing can offer financial, emotional and time benefits that, like long-term investing itself, compound over time. If it's something you feel aligns with your investing goals, set it up today!

Happy investing,

Kurt