Staygg - new app lets you invest small amounts of money for free • Hacker News Board

Re: Staygg - new app lets you invest small amounts of money for free

#21

Post by mmastrac » Tue, Feb 24, 2015, 7:15 PM UTC

Ronsenshi wrote: post #7

mmastrac wrote: post #4

Earlier quoted context omitted.

My guess: they are eating the management fees on an indexed fund that they are just managing themselves. With enough volume they can offer other fee-ful funds like the other guys and cover the costs. It's just a loss leader. I'm assuming it's not a Ponzi scheme, but obviously could be wrong. If everything is up-and-up this is actually kind of cool. I've been disappointed at the lack of decent investment options for l…

If it's not too private, what would be an ideal amount (min-max) for you to invest as a low-income saver? Furthermore, maybe it would be better to handle immediate expenses instead of trying to save every penny which wouldn't have any tangible returns anyway?

I'm not a low-income saver myself, but I see lots of low-income savers that just can't hit the minimums. I really would love to see a fee-free option for them that they can drop $5 into here and there and have it add up.

Re: Staygg - new app lets you invest small amounts of money for free

#22

Post by carloafs » Wed, Feb 25, 2015, 12:12 AM UTC

Hey guys,

I'm Carlos, one the of the Staygg founders. The app is not a Ponzi scheme, the fees will be made up in other ways as described in the FAQs on the website, and the mutual fund will provide daily liquidity, will be registered with the SEC, and will nearly perfectly replicate the S&P 500 - it does not aim to outperform the S&P 500. The mutual fund itself will not be innovative in any way - except that it's free - and the investment team won't be actively managing the fund. The real motivation behind this product is that each person on the Staygg team thought it would be cool to have an app like this so we decided to make it ourselves and make it available to others.

Thanks for the feedback.

Carlos

Re: Staygg - new app lets you invest small amounts of money for free

#23

Post by saryant » Wed, Feb 25, 2015, 1:10 AM UTC

meric wrote: post #18

saryant wrote: post #12

Earlier quoted context omitted.

Some Vanguard index funds have a $1000 minimum and you don't have to risk your money with a (frankly) sketchy investment like this.

You can also buy them on the stock exchange for less than $10 in transaction fee, and I think the minimum there is a lot less than $1000.

Good point. IIRC, if you buy the ETFs directly from Vanguard, there is no transaction fee, making it even less expensive.

Re: Staygg - new app lets you invest small amounts of money for free

#24

Post by meric » Wed, Feb 25, 2015, 1:57 AM UTC

heyalexej wrote: post #17

splike wrote: post #16

Earlier quoted context omitted.

I don't think it is promising to outperform the market at all "Our fund aims to replicate the returns of the S&P 500."

Doing that reliably over a meaningful period of time is the problem. In my book (from the perspective of an investor) you'd need to "outperform?" the index to cover the costs of frequent trades and potential losses at no actual cost to the investor.

It says replicate, not outperform.

Just buy the Vanguard index fund.

It's easy to replicate the returns on the index, you just use the dividends to pay the fees, since the S&P500 index includes only capital gains only and is not "Total Return" (include capital gains plus dividend).