January 4, 2021

Investing for beginners - Handmatig versus automated investing

BOTS wants to ensure that everyone in the world has the opportunity to build up a second passive income through investment. Not everyone has experience with investing yet. That is why we are now sharing more information every week in our "Investing for beginners" series.

Investing for beginners - Handmatig versus automated investing
Investing for beginners - Handmatig versus automated investing

Investing for beginners

Last time we shared more information about investing in crypto in our "Investing for beginners" series. What is it and how can you make extra money with it?

You can read the whole article back here.

Today we explain the difference between manual and automated investing for beginners.

Manual investing

In order to be able to invest profitably yourself, a lot of time and knowledge is needed. It requires something from you. Not every new investor has this discipline. The following 8 tips are a minimum requirement for every independent and novice investor to gain more in-depth knowledge.

1. Only invest with money you have left.

There are now poignant stories of people who put all their savings into investments and then totally evaporated. Or even worse: people who borrowed money to be able to invest quickly and ended up left with a debt. You invest with money you don't need within a short period of time.

2. Budget

Do you want to invest once? Do you want to deposit monthly? Determine your budget, evaluate it and adjust it if necessary. Always keep your finger on the pulse.

3. Make an inventory

Look at someone who's been investing for a while. Then start with a low amount yourself, an amount you can miss. Practise money, so to speak. Invest this in an asset that you have followed for a while, and which you think suits you well. In this way you get used to the fluctuation in the market. They are always there.

4. Long-term investment

Getting rich quickly from investing is actually only possible for a small number of people. So don't think you belong to that small select group. Investing goes with ups and downs. The shorter the period in which you invest, the less time there is for a market to recover. Those fluctuations from the third tip. So give it time, and don't panic at the first down. In addition, long term investing provides an extra advantage: compound interest.

5. Transaction costs

With traditional investing, you pay an amount per transaction. This can be quite paperwork. So pay attention to this when buying and selling. This also applies to investing via an intermediary. You pay not only the transaction costs but also a fee for the intermediary.

6. Risk assessment

Not everyone is suitable for dealing with high risks. If you lie awake when the market value drops by 10%, you can take this into account in your investments. Just the same the other way around. If you don't lie awake, then you may dare to take more risk. Determine this in advance and adjust your investments accordingly.

7. Risk spreading

Investing always involves risks. There is no such thing as risk-free investment. Unfortunately. To reduce the risk, you can choose to spread the amount you invest over different types of investment options.

8. Inform and learn

If investing is new to you, a lot comes your way. A lot. Make sure you keep yourself informed. Don't you know something? Then check it out. Sign up for newsletters, read blogs and articles and make sure you keep yourself well informed. It's time consuming, but worth it if you want to invest in a good way.

Automated investment

Investing yourself (or manually) also means that you cannot sit back. What do you do when the prices drop again? How far do you want to go with active investing?

Edward, an experienced investor, even set his alarm clock for the night. "There must be another way, mustn't there?" he kept asking himself.

Many new investors do not have the discipline needed to invest profitably. And that's not crazy at all. Nothing human is strange to us. It also takes quite a bit from you to be able to invest independently.

Fortunately, there is also an alternative available: automated investing. Until recently, automated investing was only available to the richest 3% on earth. They had access to the best trading strategies through (among others) hedge funds.

The principle is not difficult. A trading strategy is translated into an algorithm and this algorithm will invest for you. This algorithm runs on a super computer and is designed to get in and out at the right time in order to achieve the highest possible return.

Automated investing via the BOTS app

The discipline that you need if you are going to invest yourself is taken over by these super computers. Convenient, but a pity that this was only available to people who can step into a hedge fund with a lot of assets.

This had to be done differently, which is why the BOTS app was developed. An open platform on which expert developers offer trading strategies with which you can invest. With the BOTS app, everyone now has access to automated trading. You don't need a lot of capital for it either: you can start from as little as €50,-. At BOTS we want one thing: to turn the world of investing upside down. Because this way of investing should be available to everyone in the world.

Edward has now almost completely switched to automated investing: "Automated investing is really the future" according to the experienced investor. "I still invest myself, apart from the BOTS app, but the biggest danger remains keeping your emotions under control. You really need an iron discipline, and I don't always have one". He stays as quiet as he continues: "If you think you've won by acting manually, you've actually already lost. That's why the BOTS app is such a godsend."

Investing is for everyone

Everyone should be able to invest. And now they can. With BOTS. Together we are going to make the world of investment fairer and more transparent. Are you interested, but your question hasn't been answered yet? Take a look at the FAQs on our site. Or contact us, we will be happy to explain it to you in person.

There is no such thing as risk-free investment. You can lose (part of) your deposit.