Another year has passed and the team at Bamboo continues their mission to provide Australians with an effortless way to “invest today's spare change in tomorrow”. With Bamboo, anyone with a few spare dollars can invest in a selection of digital assets with a proven history of growth. With our round-ups feature, you don't even have to do anything - it invests the money for you without you even noticing the cost. Simply make any purchase anywhere and the Bamboo app automatically rounds up the bill and invests the remaining change. Check again a year later and you'll be amazed at the savings and interest that you've made!
A Year of Profits
The savvy investors that used the Bamboo app in 2021 enjoyed another profitable year, with the average user seeing an almost 60% return on their investment. For example, if the sum total of your round-ups over the year had come to $2,000, you would now have $3,200 saved - and you wouldn’t have even noticed the extra cents coming off each day.
It seems the majority of Bamboo investors like to customise their portfolios with a mix of new assets like Bitcoin and traditional assets like Gold. However, over a third of investors focused their money solely on cryptocurrency, an industry that saw impressive gains throughout 2021. We explore these and a host of other statistics in our summary of Bamboo User Returns for 2021.
Bamboo 2021 User Metrics
We've collated some interesting data from all of our users and the transactions they made throughout 2021, revealing some important insights about how different portfolio choices and investment strategies affect returns. It's important to see how users were affected by their investment choices in previous years to better navigate your future decisions.
The most telling insight is the difference in returns made by users adopting different investment strategies. Our data shows that investors who choose the dollar-cost averaging (DCA) strategy made the highest average returns, at 61.21%. Dollar-cost averaging involves periodically investing a set amount of money irrelevant of the market conditions at the time.
This is in contrast to investors who try to time the market in the hope of buying low and selling high. Trading like this may seem logical on paper, but you'd be surprised how hard it is to do in practice. Only the best traders can time the market with any degree of accuracy, and most others lose out because of poorly timed and emotionally charged decisions. The Bamboo users who chose this method only made a 58.55% profit on average and investors who attempted a combination of DCA and trading made the least returns, at only 56.55%
This shows that despite the seemingly passive and 'hands-off' method of DCA investing, it has proven to be the most profitable choice in the long run. As the old saying goes: "it's not about timing the market, it's about time in the market."
Different Ways to DCA Invest with Bamboo
There is a mix of Bamboo users who make either periodic or sporadic DCA investments, either on a set monthly or weekly recurring purchase or via round-ups on card purchases. Both these methods are a type of 'set-and-forget' investment, where the user is not actively involved in making the investment based on personal feelings or market movements.
Investors who carried over their lump sum investment from previous years without using the DCA method to add small additional investments accrued an average of only 54.47% returns in 2021. This reveals that DCA investors have a 6.73% edge over those who either just buy once or try to buy and sell at the right time.
Returns Based on Type of DCA Investing
Even amongst the various methods of DCA investing, we see differences in the level of returns. DCA investors who invested only using round-ups from their purchases had the best returns, with an average of 68.55%. Investors who used a combination of round-ups plus recurring periodic investments saw only 53.38% returns, while a small group of investors who made recurring periodic investments suffered the lowest returns at 50.32%.
A very small group of outliers who stuck to their recurring DCA investments but also chose the occasional once-off payment almost came out on top, with 67.54% returns. This group likely had good knowledge of the markets and made relatively well-informed decisions regarding their once-off payments, and yet still came in lower than those who purely used the round-ups method.
Different Types of Assets Invested
We also gained some insights into the types of investments that Bamboo users chose to include in their portfolios. Bamboo offers four different digital assets to invest in, including Bitcoin (BTC), Ethereum (ETH), Digital Silver (AGS) and Digital Gold (AUS). This provides users with a variety of options, both in the high-yield but speculative cryptocurrency sector and the low-risk, low-yield precious metals sector.
Just over one-third (35.47%) of registered Bamboo users who made at least one payment in 2021 chose to split their investments equally between Bitcoin and Ethereum. A small percentage of investors (2.87%) chose to only invest in gold, while 1.85% split their investments equally between all four assets. The remaining Bamboo users chose a more customised portfolio that split their investments up in various ways.
The Long-term Benefits of Micro-Investments
As you can see from the above statistics, the long-term benefits of making DCA-style micro-investments like round-ups are clear. Not only is it an entirely hands-off, hassle-free way of saving money, but it also has almost zero effect on your current lifestyle. In the past, your small change would likely end up gathering dust in a jar and slowly losing value over the years as ever-rising inflation eats away at it.
New technology now gives you the power to invest those spare pennies into digital assets that deliver impressive returns, making your money work harder for you. And the best part is, it's available to anyone - no matter your financial situation. All you need to get started investing with Bamboo is a smartphone, a bank account, and a passion to build wealth for your future.
Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific cryptocurrency will be profitable or equal to corresponding past performance levels. Each investing decision you make should be determined with reference to the specific information available and not based on past performance.
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.