Spaceship Voyager is a micro-investing product designed to make investing really simple.

You can get started investing in three steps:

Pick one or more of our three investment portfolios.
Invest your money – either in a lump sum or by setting up an investment plan.
Watch the value of your investment change over time.

When things are this simple it can feel like there must be a trick.

But it’s pretty straightforward: there’s a good chance your money will grow over time if you invest it thoughtfully.

(There’s always a risk in investing. It’s really important to understand how risky your investment is and if it matches what you’re personally comfortable with. It’s different for everyone.)

Steps one and three are pretty easy.

It’s step two that new investors can struggle with. If you have a big chunk of money, such as a tax refund or a work bonus, and you’ve decided you want to invest it, should you do it all at once, or spread it out over time?

Your investments will change in value over time

When you buy a share of a company, you own a tiny piece of it. The value of that piece will change depending on how much the company is worth overall. It can be unpredictable. A company can be worth X amount today, and something completely different tomorrow.

The Spaceship Voyager portfolios are managed funds made up of companies we’ve picked (or, in the case of the Spaceship Origin Portfolio, meet the investment criteria). When you invest money in a managed fund, you receive ‘units’ in return. Each unit represents the composition of the underlying companies in the fund. The value of the companies fluctuates, so the unit price does too.

Fluctuation is normal and to be expected. While it can be difficult to predict what the price of a company, a share or a unit will be, you can manage your risk. Check out MoneySmart's breakdown of typical investment risks and suggested timeframes.

Dollar-cost averaging

Dollar-cost averaging makes it less likely that you’ll buy all your stocks at their lows or highs.

When you dollar-cost average, you regularly invest similar amounts of money into a single product. Sometimes your money will buy you more, and sometimes it will buy you less, depending on the performance of what you’re investing in.

For example, you might sign up to the Spaceship Universe Portfolio and decide to invest $50 each week.

Let’s imagine the unit price of the Spaceship Universe Portfolio is $1.10 in week one, $1.20 in week two, and in week three it drops back to $1.15.

In week one, your $50 investment will buy you roughly 45 units. In week two, your next $50 investment will buy you roughly 41 units. And in week three, your next $50 investment will buy you roughly 43 units.

Altogether, your $150 will have bought you roughly 129 units at an average price of $1.16.

If you spent that $150 in one go, at the high, you would have 125 units – four units less.

If you spent that $150 in one go, at the low, you would have 136 units – 11 units more.

But it’s difficult to predict the low to know when to press buy.

Dollar-cost averaging helps you smooth your average unit price. It also has the advantage of being more habit building. When you take a slow and steady approach to investing, you may be inspired to hang in there, which may be the difference between achieving your investment goal.

Lump-sum investing

Lump-sum investing does what it says on the tin: invests a lump of money all at once.

Lump-sum investing can have the benefit of exposing all of your capital to immediate returns.

For example: let’s say you invest $1,000 into the Spaceship Earth Portfolio and it immediately appreciates in value by 5%. Your investment will be worth $1,050 – a $50 gain.

If you started investing on the same day, used a dollar-cost averaging method instead and split your $1,000 into five $200 parcels, only the first $200 investment would have received that immediate growth. Your 5% growth would be worth $10 which is $40 less than if you’d invested it all at once.

On the flip side, it can take an immediate hit, too. And you need to be prepared for the value of your investment to decline (which can happen no matter your investment method.)

Even though history says that stock markets tend to appreciate – the ASX 200, for example, has grown by an average 9.3% per year in the ten years to June 2021 – a loss can feel pretty terrible until it hopefully rights itself. We’ve written about what you should do when the market drops and it essentially boils down to “Don’t panic”.

Is there a third approach? Yes.

Some people adopt a hybrid model, and invest a lump-sum immediately while dollar-cost averaging the rest of their capital.

For example, somebody with $5,000 to invest might decide to invest $2,500 in a lump sum and split the remaining $2,500 into ten $250 weekly investments. They might decide that it’s a good idea because the market’s performing well, so they want to benefit from the gains – or on the other hand, the market’s dipped and they want to take advantage of cheaper prices with an expectation it will go back up.

What do investors think?

Investors fall back on some famous mantras.

“Be greedy when others are fearful” is one. “Don’t fall in love with a stock” is another. “Let your profits run.” “Time in the market beats timing the market.” “Diamond hands.”

Underpinning each of these is emotion. Investing looks like a numbers game until it’s a big chunk of your savings that’s fluctuating. The highs can feel high, and the lows can make you panic.

That’s why it’s important to do what you’re doing: research and strategise.

What does the research say?

Researchers Peter Bacon and Richard Williams note that lump sum investments tend to perform better over time. They say that dollar-cost averaging might prevent you from investing all your money at a market high, and reduce your risk, which is a win. But they also say that if you have money to invest you are better off giving it maximum time in the market rather than saving some of it for later.

The best approach for you is going to depend on your personal financial situation, objectives and needs.

At Spaceship we believe in understanding your investment, setting a goal, making a plan, and being patient.

If you’ve decided Spaceship Voyager is the right investment product for you and you’re already a customer, you can set an investment goal in the Spaceship app and go from there. If you're on desktop – you can scan this QR code with your phone to get set up.

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