Pearler promotes regular, long-term, passive investing, or more specifically - incremental amounts in diversified portfolios, for the long-term.

In fact, this is the key belief we founded Pearler on! Back in 2018 we got fed up with only having two bad options to refer our friends to when they wanted to start investing – confusing trading platforms or expensive micro-investment apps.

So we built Pearler from the ground up to focus on the thing that matters most – helping people achieve their long-term financial goals - and the best way to do that is by investing in incemental amounts, in diversified portfolios, for the long-term.

Let's break down what that means.

Incremental Amounts

Incremental amounts means investments are made in regular chunks - like fortnightly, monthly or quarterly. This can, and should, be whatever amount and frequency suits you best.

Most people within our community choose to invest a percentage of their take home pay every time they get paid. This way they are dollar-cost averaging, which is a long-term investing technique that results in a lower average cost of investments (meaning they get above-market returns without trying to time the market), and less stress!

Diversified Portfolios

Diversified portfolios means that invested funds are spread across many companies.

Diversification is important, because having all your eggs in one basket can leave you vulnerable to sharper market fluctuations, whereas diverse portfolios spread risk and invest in different types of businesses at the same time.

Diversification can be achieved by investing in many (+20) individual shares, or by investing in a single exchange-traded fund (ETF) or listed investment company (LIC) because they are baskets of shares (meaning you invest in many, usually hundreds, by investing in any ETF or LIC).

Read more here: What is diversification and why is it important?

Long-term

Long-term means at least 5 years, and the longer the better.

The reason this is important is because the longer the time period, the more certain you can be that your investment will steadily appreciate.

The chart below shows the US Stock Market return data for the last 146 years. The US stock market represents ~50% of the world's market capitalisation (i.e. all shares that can be invested in by the public globally), so it can be considered a relatively diversified investment - significantly more so than just investing in Australia.

As you can see, the market is volatile over one-year intervals. If you were to choose a one-year period at random, there would be a 31% chance of losing money!

However, as the timeframes get longer – 5-year, 10-year, and then 20-year rolling periods – the frequency of losses rapidly decreases. By the time you get to the 20-year windows, there isn’t a single instance in which the market had a negative return.

Combine a long-term investment horizon with dollar-cost averaging - i.e. consistently investing no matter what the market is doing - and a sufficiently diversified portfolio, and you are guaranteed to succeed.

Getting Started

Here's a quick fire way to getting started with incremental amounts in diversified portfolios, for the long-term.

1. Choose a listed fund. Diversified ETFs are perfect for beginners. Alternatively, checkout our most popular ETFs & most popular LICs.

2. Set up automatic dollar-cost averaging with Autoinvest. Choose a percentage of your income you can sustain long-term, and sync investments with your pay cycle.

3. Keep investing for at least 5 years - preferably 10+!