Tickr Review – Ethical Investing App
Today we’re reviewing the Tickr app, a simple investing app that let’s you invest easily into ethical funds. With its 3 themes of Disruptive Technology, Climate Change, and Equality, it’s a platform for people who want to make money from stocks while doing some good.
Does it have its drawbacks? Of course. But it fills a space in the market not covered by other investing apps. Should you invest via the Tickr app? Let’s check it out!
Editor’s note: Open an account with Tickr using the link on the Offers page and you will get some cash added to your account, currently £10. And for some clever marketing reason they will also plant 4 trees, when you use the link.
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What Does Tickr Do
Tickr let’s you invest in one of 3 fund themes, or in a combo fund covering some of all 3; Climate Change, Disruptive Technology, and Equality.
It works by investing your money into a handful of ETFs – exchange traded funds – which closely align to the theme description. It also puts some of your money into bonds, both Green and Government.
As a very brief overview, an ETF is usually a collection of shares or bonds that have something in common, be it by sector or geography – a fund, but which is not usually actively managed, and so has low fees.
Let’s dig into one of Tickr’s theme’s – the one I picked to invest in – Disruptive Technology.
ETFs In The Disruptive Technology Theme
We’ll use this theme as the example in this review; the other themes have the same basic structure – 2 to 4 subsectors with an ETF for each, supplemented by Green and Government bond ETFs. The Combo theme takes a couple of ETFs from each of the 3 main themes.
Disruptive Technology has 3 sub-themes: Automation & Robotics, which invests in the iShares Automation & Robotics UCITS ETF (RBOT); Digitalisation, which invests in the iShares Digitalisation UCITS ETF (DGTL); and Cyber Security, which invests in the L&G Cyber Security UCITS ETF (ISPY).
What Are The ETF Costs?
There are 2 types of cost on the platform – those charged by the ETF providers, and those charged by Tickr themselves. Let’s first look at the fees on the ETFs, called the Ongoing Charges Figure, or OCF.
When you choose a theme, you must then also choose between 3 risk ratings: Cautious, Balanced, and Adventurous – from least to most risky.
I chose Adventurous for it’s higher potential return, which has a higher average OCF than Balanced, which in turn has a higher average OCF than Cautious – due to the mix of stocks to bonds, with Tickr’s bond ETFs being cheaper than their stocks ETFs.
The range of OCFs on Tickr range between 0.25%-0.49% p.a – low enough that we don’t really care if one theme or risk level is slightly more expensive than another – they’re all pretty small.
What Other Costs Do Tickr Charge?
#1 – Monthly Fee
There is a £1 a month flat fee for holding an account, but the first month is free.
We quite like flat fees instead of percentage fees because we invest large amounts, but it’s no good if you’re only investing small amounts of, for example, £50 a month or less. £1 on £50 is effectively a 2% fee, which would act as a brake on your investment gains.
#2 – If Your Account Goes Over £3,000
If your account goes over £3,000 Tickr will add an additional 0.3% fee to the portion of your money that is above £3,000. For instance, if you invested £10,000 in the platform, the 0.3% would be applied to £7,000 of it – which would be £21 a year.
#3 – Round Ups
Tickr offer a service called Round Ups which we’ll cover shortly – there is no additional fee for those who join the platform after 17th March 2020.
No Transaction Charges
This is great – It means you can invest as often as you want without being penalised. There are also no fees for selling, or for withdrawals.
Changing Your Theme
You can change your theme at any point by going into My Account in the app, and clicking on My Fund.
However, to do this the app sells your existing holdings and buys into the new ones in the new theme, which can take up to 7 days.
This means you could make a gain or a loss on transfer as trades do not take place immediately – the market will likely have moved either up or down by the time your trades are executed.
Features Of The App
#1 – App Interface
As investors who want to own the world, one useful feature that we love is that the app tells you clearly which geographies your investment covers.
There’s a bit of info about the top companies in your themes, the split of your portfolio by sub-sector and how the different parts of your theme have performed, and which stock-ETFs you are investing in.
It doesn’t tell you which bonds you are investing in though, and we looked all over their website and app for info on this. We want to know what we are investing in.
So we contacted them and this is what they said the bonds were: Lyxor Green Bond (DR) UCITS ETF (CLMU) and iShares Global Govt Bond UCITS ETF (IGLH), both with OCFs of 0.25%. UK bonds make up less than 5% of these investments, so do your own research into them to check you’re happy with them.
#2 – Fractional Shares
It effectively has a fractional shares feature built in, as you can invest any amount you like – over £5 – into your theme ETFs.
You can’t do this on many traditional investment platforms. For instance, the L&G Cyber Security UCITS ETF (ISPY) costs around £13 to buy one unit on the open market, but you could invest £5 in Tickr and be invested in this Cyber Security ETF.
#3 – Monthly Investments
You can set this to anything from £5 upwards. Too many investors try and fail to time the market, but dripping equal amounts into the market on a regular basis over the long term has been shown to give better results.
#4 – Round Ups
Round-ups works by securely connecting to your bank, and rounding up the spare change on your transactions to the nearest £1.
Using an example from the app, spend £2.40 on a coffee, and the remaining £0.60 will be invested into your Tickr portfolio.
You can also apply a multiplier, which doubles, triples or quintuples the amount you invest via this method.
However – this Round-Ups service suffers from similar limitations as round-ups offerings on other apps.
It doesn’t happen in real-time. Instead, it keeps track of your round-ups over the week, and takes them all at once on a Monday. This could catch you off-guard with your household budget.
It would be much more expensive for Tickr to offer an instant round-ups service; which is likely why they don’t offer one.
Deposits and Withdrawals
Deposits are instant and the app makes it super easy to do – just tap on your portfolio pie and type in an amount to deposit.
Withdrawals are not instant, in fact they can take up to 12 working days – the funds are sold on the next available Wednesday and the cash processed the following Monday, which then takes 3-5 workings days to reach your bank account.
Do I Receive Dividends?
Dividends may be paid by the underlying ETFs in each theme but they will be automatically reinvested.
Is There An ISA?
Yes, and there’s no fee to use it – great if you want to use Tickr as your main investing app, as you will pay no UK taxes on your portfolio.
Better To Invest On A Do-It-Yourself Platform?
Tickr invests in ETFs which, in their words, have “a positive impact on the world”, most of which are not available on other free trading platforms. It’s the cheapest place we’ve found to buy these specific ETFs.
However, investing only in this range of ethical ETFs is not a fully diversified way to invest. Limiting yourself to only ethical investments means you could miss out on some excellent companies.
And there are other platforms available that do not charge any fees, such as Freetrade.
It is possible to build a global portfolio diversified by geography and by market sectors within the Freetrade app by buying just 7 ETFs, which we’ve covered in our World Portfolio series, linked to in the description below.
But we think Tickr is a great app for what it does – and you do feel good using it, seeing your trees getting planted and knowing you’re making a difference.
Are you using the Tickr app? What else do you want answered? Let us know in the comments below.
How The UK Government Can Afford to Pay Everyone’s Salary
The UK along with most of the Western World are, for want of a better word, absolutely screwed…. And that was before Covid-19! Pile on a huge amount of additional debt and then prohibit the entire country from working and you have a catastrophe just waiting to happen. A ticking time bomb!
This debt seems to be the primary way in how the UK plans to get out of this mess. Surely when you find yourself in a hole, stop digging. If we hadn’t seen it with our own eyes, we’d never have believed a Tory government could borrow so much so fast. Boris must have just read Jeremy Corbyn’s latest book “How To Sink A Country Faster Than The Titanic.”
Of course, we’re being facetious, but the terrifying amount of debt and money printing is a serious concern to the UK and your own pocket. Many people will be wondering, if the UK government can just pay everyone’s salary, then why can’t they do this all the time? And why do we normally have to pay taxes? Just print more money and lets all go to Skeg Vegas.
It may sound like we’re criticising the government’s approach but we’re not really; we recognise that there is a real health crisis – Could it have been handled better? Yes. But it could be a lot worse.
Editor’s note: Start investing with a freebie – investment app Freetrade are giving a randomly chosen free share to each new customer who opens an account using the link on the Offers page – it could be worth up to £200, and all you have to do is open an account and top up by £1 – what are you waiting for?
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What is the Furlough Scheme?
At the time of writing, more than 4 million workers have been furloughed. That means the government will be paying up to 80% of over 4 million people’s wages up to a maximum of £2,500 per month.
Companies continue to pay these workers’ wages and reclaim it off the government, and this scheme is likely to go on until at least the lockdown ends – whenever that will be. Rumours are that the furlough scheme will be extended and may even run into July, but we wouldn’t be surprised if it continues past this as the UK doesn’t seem to have any exit strategy.
According to Wired, “One in four UK workers, or more than nine million people, are expected to be furloughed during the coronavirus crisis as businesses struggle to survive.”
What Is The Cost?
The last figures we’ve seen suggest the furlough scheme’s costs could reach £42billion but that was before the scheme was extended by a month, and if it keeps going for a few more months and the number of furloughed staff increases we think this could easily reach £100 billion.
That’s not money the government will get back. These are not loans. That money will have disappeared like a fart in the wind.
The real question is what will it cost if the government doesn’t pay everyone’s salary? The effects would be unthinkable. Mass unemployment and severe long-term damage to the economy. In the US they have taken a slightly different approach to bailing out their economy and the unemployed figures are already at 33 million people.
These are insane numbers. To put that into perspective there were only 15.3 million American jobless at the height of the 2008 financial crisis.
So, with that said, the UK’s approach to save jobs should help to get the country back on its feet as soon as it’s safe to do so. If a total lockdown was the right approach – a big if – then we think a furlough scheme to save jobs was the logical follow-on course of action.
Is The Furlough Scheme Too Generous?
Let’s not ignore the elephant in the room. Of course, it’s too generous. Who wouldn’t want to be sitting at home chilling and earning at least 80% of your normal salary, with many people even earning 100%?
Peoples’ living costs have plummeted. You’re not driving, partying, eating out, going on holiday or doing anything else that costs a lot of money, so 80% salary is more than enough! It’s so generous that YouGov found that 88% of people think it would be wrong to start loosening restrictions now. If those people were struggling, we’re betting that that percentage would be a lot lower – people would be begging for the lockdown to end.
Anecdotally, workers are asking to be furloughed, and complaining when they haven’t been. It seems unfair that your neighbours are lying out in the sun and having a beer, when you’re stuck chained to your kitchen table slaving as hard as ever. Who wouldn’t want to be furloughed when those are the terms? Of course, we’re not making light of some people’s situations as there will be plenty of cases of genuine hardship. But many people so far have done very well from this crisis.
Another issue with the furlough scheme is it encourages businesses to just put everything on hold rather than adapt. They can simply just pass the cost of their staff to the state and wait for this to blow over.
If the scheme wasn’t in place or was far less generous, then is it is highly likely that businesses and entrepreneurs would do what they do best – that is, engineer their way out of this mess and somehow prosper.
How Is The Government Paying for it?
There are many other measures being taken and the numbers are eyewatering, but we’re not too fussed about all these loan schemes that the government is offering to businesses, as in theory they should be paid back, so the overall cost of these should be relatively small. That’s a lot of emphasis on the word ‘should’ because who knows what defaults will arise?
Anyway, there are a few ways in which the government is obtaining humungous sums of money to pay for this crisis.
#1 – Borrowing
The first is through borrowing money from the markets and they have been raising billions this way, adding to the ever-growing Debt Mountain. Latest UK debt figures say the total debt is, but factor in other liabilities and some sources say it’s as much as £4.8 trillion – that’s £78,000 for every person in the UK.
Can the government really afford this? Absolutely NOT but they will raise it anyway. Debt is just delaying the inevitable – a big nasty bill for future generations. According to the Independent, some analysts expect government borrowing to top £200bn in the current financial year. This is ridiculous. Who is going to pay for this?
Labour were constantly berating the Conservatives to end austerity after the financial crisis of 2008, but the hard truth is that austerity didn’t even start. If national debt is always increasing it means we’re still living beyond our means. How can it be austerity if you’re still borrowing to cover normal day to day costs?
We as a country have been living beyond our means for far too long and yet nobody is brave enough to put an end to it. As you may have an overdraft with your local bank, the government effectively has one with the Bank of England known as the Ways and Means (W&M) facility.
The borrowing limit on this overdraft is normally quite small at £400m but it has effectively been made unlimited during the Corona crisis. This overdraft is to be used as a reserve but in 2008 the government tapped it up for £20 billion. This overdraft will likely be paid back quickly using additional borrowing.
#2 – Print Money (Quantitative Easing)
We don’t know why it’s called quantitative easing – a more appropriate name would be state sponsored theft.
The Bank of England purchases government bonds from the open market in order to increase money supply. The goal here is to improve conditions in the gilt market, which ultimately allow the government to raise more money through borrowing.
The increased money supply should filter down and stimulate the economy. The problem is that an increased money supply should lead to inflation because the value of money is derived from supply and demand.
If you theoretically doubled the money in circulation, then prices would double. Printing money has a track record of dire consequences as it leads to hyperinflation. Check out Germany after WW1 or Zimbabwe more recently.
The BoE has said it will buy £200bn of gilts in a fresh round of QE. Western Governments generally have inflation targets of around 2% but we think the government’s intention is to engineer higher inflation in an attempt to shrink the debt mountain.
Most people don’t understand inflation properly and while it may be good for eroding government debt, it is not good for your wealth.
By borrowing money, the government is stealing from the future. By printing new money, they are stealing from the value of your savings. Either way, it is you and your children who will be paying for this Furlough scheme.
What are your thoughts on the ever-growing UK national debt? Let us know in the comments section.
Problems with Day Trading | Short Term vs Long Term Investing
The stock market is one sexy playing field right now – not only are markets down to historically cheap prices for buying, but volatility is through the roof. The markets are all over the place!
Good news sees a tick upwards, bad news sees a tick downwards. The draw towards day trading in such times is strong – check out what happens if the stock market moves up and down by 2% over a 10 days period. If you always bought at the bottom of down day preceding an up day, you’d make 5 lots of 2% – 10%! In 10 days!
That would be a good return for a whole year for a long-term investor, and you could do it in 10 days by day trading. Keep that up for a whole year and you’d return 3700% with compounding. £1,000 would become £37,000.
So why isn’t everyone doing this? Well, it’s not as easy as you might think to get it right…
Editor’s note: Start investing with a freebie – investment app Freetrade are giving a randomly chosen free share to each new customer who opens an account using the link on the Offers page – it could be worth up to £200, and all you have to do is open an account and top up by £1 – what are you waiting for?
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Why Day-Trading?
Short-term investing has the potential to be highly rewarding; it’s more exciting and hands-on, and the potential for high, fast returns just may attract some investors. Who doesn’t like fast, easy money?
So why isn’t everyone chilling on their private yacht in Miami having played around with day trading for a few weeks? Well, market timing is very difficult to do.
You have to be right twice — once when you buy the stock, and again when you sell it.
Day trading does have the chance to make you very rich, and we’ll get to the best way to go about doing that – but let’s first briefly cover the problems with it.
What Stops You Winning at Day Trading
Day traders are focussed on return, not risk. But day trading is riddled with risk.
The risks involved mean that for most people, on a risk/reward ratio it is likely to be less rewarding than long-term investing into a decent global portfolio.
There are 2 major problems for Day Traders:
#1 – Trading Fees
The traditional stumbling block for a day trading strategy is trading fees. At around £10 per buy and £10 per sell, trading fees on the premium platforms such as Interactive Investor and Hargreaves Lansdown make day trading almost pointless for all but the richest of investors.
Even if you use CFD’s or spread betting to trade these are riddled with all manner of fees.
The free trading platforms such as Freetrade do not have this problem. There are no trading fees, but even on these platforms, you still have to contend with stamp duty, and the Bid/Offer Spread.
All stock trading platforms have 2 prices: a buy price, and a sell price.
The difference is called the Spread, and this is the amount of money you would lose if you bought a share and immediately sold it.
High Street retailer M&S has a fairly tight spread of 0.15%, while smaller companies on the UK AIM index can have much chunkier spreads like the 6.25% of City Pub Group. It’s the kind of cost that stacks up if you trade frequently, but which long term investors might barely notice.
#2 – Timing the Market
Let’s imagine a day trader who sunk his fortune into shares in the FSTE 100 on 26th February 2020, after markets crashed massively from around 7,500 in the days prior to 7,042. This would be a reasonable action from a Day Trading perspective.
But day traders can no more see the future than the rest of us, and could have no idea that the months following this day would see the markets drop off a cliff:
This day trader would have gotten half of his equation right at least – he did buy low, relative to recent highs.
But unfortunately, you have to get the “sell high” part right as well.
If You Insist on Day Trading – How to Lower Your Risk
How we would approach Day Trading is the same way we’d approach poker – we’d never put more than a twentieth of our total pot into any one transaction. Definitely don’t draw on all of your savings to Day Trade. Only trade what you can afford to lose.
The “risk” to a day trader is that the market doesn’t go up further than the price you paid for it for a long time, effectively becoming a long-term investment. We like to invest for the long term, but the kind of volatile stock you might pick as a day trader is probably not something you’d pick as your first choice for a long-term investment.
So; you could pick a stock that you think is volatile enough to rise quickly in the short term – buy it when it is lower than in previous days – and put in no more than a twentieth of your pot. If you’re right, a quick win is made. If you’re wrong, you have to decide whether to hold it for the long term, or to sell at a loss.
And selling at a loss is an emotional hurdle to overcome. You may end up selling your winners straight away but holding duds for a long time. By dividing your total pot into at least 20 parts, you could spread your risk over at least 20 trades.
Day Trade Using ETFs
The biggest risk with shares is that they can go all the way to zero, and this is particularly so for traders who are looking to make a quick win from a falling share price they think might recover.
Maybe there’s a reason the price has fallen. Maybe what you’re buying is a company on its way to going bust.
When we look to make profits on a falling market, we buy ETFs. These are diversified across many companies, so the risk of it going to zero are slim-to-none. And we hope to make our profit when they revert back to their intrinsic value.
Maybe if a meteorite hit the earth wiping out all those companies at once. But then we’d have other things to worry about.
Long-Term Investing Advantages
We like to model our shares investing strategy on that of Warren Buffet, legendary long-term investor.
He returned around 20% per annum over his investment career.
There are 3 key advantages to investing for the long term over day trading. These are:
#1 – Passivity
Being a Day Trader is a career. You need to constantly hooked into The Matrix, aware of price movements happening in real-time and poised over your keyboard ready to take advantage of multiple micro-gains to make your profits worth the effort.
We can’t be bothered with all that. We’d rather be sat chilling at letting our well-balanced global investment portfolios do the work for us. And we can do this happily because of point #2.
#2 – Long-Term Does Better on Average
Long-term investing weighs risk against return, and does better on both counts.
Risk is reduced if you drip your money evenly and at regular intervals into the market, as the highs are offset against the lows and you invest at an average price.
In a famous study of individual investors’ behaviour, Berkeley University professors Barber and Odean found that the most active traders realized the lowest returns.
Their 2017 study found that 80% of active traders lost money and only 1% of them could be called predictably profitable – maybe some of our viewers fall into this 1%? If so, let us know!
Whereas long-term investors should average the returns of the global stock market, which has always gone up over the long term – and up big.
#3 – Dividends
Dividends are what turn a long-term investment portfolio into a passive-income generating machine, and are a key reason why long-term investing beats day trading.
No matter the swings in stock prices, dividends across your portfolio will likely continue to get paid.
Investing during a recession gets you the best of both worlds. You’re buying when the market is down, locking in a cheap price, and can hold on to your asset for the long-term, reaping sweet dividends as you do so!
Do you trade frequently, or hold for the long term? Let us know your success stories in the comments below!