Raiz is a popular Australian Micro Investing App. Using Raiz you can start investing into a portfolio of ETFs with as little as $5 at a time. With reasonably low fees and a well designed app, it's no wonder its one of Australia's most successful investing apps.
Can you Lose Money with Raiz
Yes you can lose money investing with Raiz. Stocks go up and down. So if you invest at the wrong time your portfolio could down in value. In the longer term, the stock market as a whole has continued rising. Even after the 2008 financial collapse the stock market posted record highs. So if you're investing for the long term, there is less of a chance that you'll lose money.
Putting money into Raiz isn't as safe as putting money into a bank account. Apart from bank fees, your bank balance won't lose value. Where as your Raiz balance will go up and down depending on the value of the underlying stocks. However money in a bank account won't grow or will grow very slowly if it's in a high interest savings account. Due to inflation the buying power of this money will go down. By investing using an app like Raiz, you're hoping that your investment will outgrow inflation.
Raiz isn't inherently more risky than other investing apps. But it's also not less risky. You are still investing in stocks and stocks can lose value.
Which Raiz Portfolio is Safest?
Raiz offers a number of prebuilt portfolios you can invest in. In general terms, the conservative portfolios will experience less growth but should in theory be more stable in the short term. Where as the aggressive portfolios will move around more but in theory should grow more. However when it comes to investing nothing is a guarantee.
Should you Invest in Raiz with Money you May Need?
I wouldn't use Raiz like a savings account. There is no guarantee that the money you put in now will be worth the same amount in a month or two. So if you need that money for a larger expense it's smarter to put it into a savings account.
Note – This post shouldn't be considered investment advice. We have no relation with Raiz. Always read the PDS before investing.