My Spaceship investment is falling... what do I do?

Feb 24, 2022
 

This week it's all about... a question I was asked inside the My Financial Adulting Plan from someone who joined this round who invested in the Spaceship app last year and it's fallen so much - they're not sure whether to sell, stop, pause or hide.

With the US tech market (and the Aus market) crashing in the last couple of months, it's a question I know many people are asking themselves and that's why I covered it in this week's Musing.

I talk about what Spaceship is and mention a comparison table download where we've compared 9 popular investing apps for you - you can download it HERE.

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Of course, if you know that you need more help check out the My Financial Adulting Plan via the link below. But be quick - doors close 1 February.

Transcript 

Hey, and welcome to Mel's Money Musings. So this week there was a question inside the My Financial Adulting Plan, and it was such a great question, I wanted to come and answer it here as well.  

 So this person had, uh, some super and some investing inside an app called Spaceship. And Spaceship is an app that allows you to invest in US tech companies via some ETFs. And it is, that is its sweet spot. That's the niche that it invests in. And of course, if we've looked over the last couple of months, US tech has been absolutely hammered. I mean, I'm in Australia and Australian tech has been hammered, but US tech has also seen values of stocks drop dramatically. And the question was, they were freaking out a little and saying, I just don't know what I should be doing. And here's the thing. 

 If you were only investing in Spaceship, if I had say, my home and Spaceship, and that was it, I would be concerned because whilst you're investing in the share market, you're investing in such a niche in the share market, it would kind of be akin to going, so I live in Glenbrook for part of my week in the Blue Mountains and saying, if I invest in any property, not only am I gonna invest in Glenbrook, but I'm going to invest in the one street. Cause I think that's the street that's gonna happen. And that's essentially what you are doing with Spaceship if you are going all in, you're saying I'm going to invest in, uh, the share market. I'm gonna invest in US tech and that's it.  

 And what we know from any type of investing is one, we want a long term timeframe, but two, we also want diversification and that's why I'm a fan of sure - you might love Spaceship and think that's a beautiful way for you to invest in US tech.

But I would also be looking at other apps or other platforms to say, what else should I be investing in in the share market so that I'm not just, uh, I don't just have exposure to one sector?  

 So for example, you might look at Pearler or you might look at Sharesies, or you might look at Stake or one of the many other apps. We've got a download that I'll put in the notes which compares nine different apps to really make life easier for you.  

 And you might decide great - I'm going to pick four different ETFs. So five different ETFs. That's going to give me the diversity that I need. And then Spaceship might simply be one of those.  

 So what I said to the person inside the My Financial Adulting Plan is (a) I wouldn't necessarily be getting out of Spaceship. Do you believe that tech and the companies that Spaceship's gonna invest in will still do well over the long term? Because the only way really that you lock in those losses is from selling.

So your answer is yes, then you kind of would park it, go. I'm not gonna look at that for quite some time. Uh, but then let it go. You may still choose to invest in it because if the bottoms fall out of tech, you might liken it to it being on sale.  

 However, if that is all you're investing in, I would also look at the opportunity now to go, ha, this is why you don't just invest in one sector. And you might even just park that investment and look at investing now into something else instead.  

So I hope you've found that helpful. Certainly there's so many reasons why the share market is being so volatile at the moment I mean there was already COVID, there was already inflation, there was already wage pressures and all sorts of things.  

 And now we've got Ukraine and Russia thrown in. And if you are thinking, what on earth would that have to do with the US market or the Australian market? Investors want security. They want confidence. They want calm. Um, and that's where volatility in the share market can come into play. And we can see the share market react to what's happening even in a country like Ukraine with Russia invading.

Does it mean that you wanna get out? No, if you have a long term timeframe, then what we know is that yes, there will be some short term volatility. We saw this in the GFC, you saw this in the 1920 stock market crash. However, over time we should see those, all of those sectors, recover. You only crystallize the loss, you only lock it in, if you sell.  

 So worst case, park it and look at some other sort of investing instead, or best case continue to average cost your investment by continuing to invest regularly, and then ensure sometimes you'll get at the highest. Sometimes you get all at the lows and it evens out across it, but certainly your takeaway is diversification, a long term timeframe and making sure you're not just in one sector.  

 I hope you've found that helpful. As I said, there is a comparison table in the notes below that compares those different apps. So make sure you grab that. But also if you've got questions, or if you know from this that you might be needing some help when it comes to understanding investing, in financial confidence and financial literacy, then make sure you sign up and you jump on the waitlist for the My Financial Adulting Plan. Our doors open in May. 

Imagine how it would feel if you could financially sort yourself out in 8 weeks. Join over 1,000 others who have transformed their finances with the My Financial Adulting Plan. But hurry, doors close 24 May! 

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