Introduction to pie investing -
We have all heard about creating a passive income through dividend stocks. Where we have had to pick out each of the stocks and buy each individual one. If you had a large portfolio it could take a while to go through all of them and select which stocks you want to buy into. Well with trading212s new pie investing you are now able to invest passively. You are able to set up a pie which includes certain stocks, for example have a pie for each sector. You are then able to either set up a direct debit or manually invest funds into each pie and trading212 will allocate funds to the weighting which you have set.
The look of your pie in your portfolio -
When you have your pies set up, you will be able to see two options under your preforming graph. One which says investments and another saying Pies. Under investments you will be able to see every stock which you have in your portfolio and spread over all your pies. Here you will be able to see the gain/loss and how many shares you have in total. Under the Pie option you will be able to look at all your created pies. Looking at your pies you will be able to see the total value and the gain/loss of each pie individually.
How to create a Pie & balance -
Creating a pie is such a great, easy and straightforward process. When you select the Create Pie option it will come up with a screen asking for investment searches. Here you type in each ticker symbol or name of the company which you want to add into your pie *to note that you can only add fractional stocks and ETFs.
Once selected the stocks you wish to be in your pie and your happy with click Next and it will bring to the next page.
Here you will be able to see the average return of all your stocks in the pie over the last 5 years. This is a great feature but remember past performance is not an indicator for future performance. Bellow this you can see all your stocks/ETFs.
You are able to change the weighting of each in your portfolio *this will effect how your funds will be distributed with investing into the pie.
Changing the weighting or percentage which the specific investment will be in the pie will also change the average estimated return.
Once happy with your investments and weighting in your pie, the next page will ask you how you want to invest. You can choose between manually investing where you deposit the funds you want into the pie or autoInvest, where a direct debit will be created and funds will be passively invested.
The minimum investment when selecting to invest will vary depending on the size of your investment due to minimum amounts to purchase fractional shares.
Future changed to the Pie feature-
Currently if you want to buy one certain investment, for example Abbvie ticker ABBV, your shares which you hold in your pie and the shares which you have individually brought will be held separate. This is in the works to be changed for the future. Remember the Pie feature is in Beta stage.
The benefits of investing into a pie-
If you want to invest into stocks, but don't have the time to pick individual stocks, click each one, select an amount of shares and then invest, Pies could be the way forward. You are able to set up a pie with your favourite stocks, set up the weightings your desire of each stock and create a direct debit. This way you know that each day, week or month you will be investing into your favourite companies.
Another great feature of the pie is the function of automatic dividend reinvestment *You are able to turn this feature on or off any time. Turning auto dividend reinvestment on means all your dividends will be reinvested straight back into your favourite companies. The only down fall is that you won't have control over which stocks are brought, but on the positive side is that the power of compounding will also be passive! *to note trading212 is looking to bring DRIP (dividend reinvestment program) to all stocks.
The goals of your pie -
You are able to create value goals for your pie and a set date which you want to achieve such goal. Setting these goals you will be able to see if you are on ahead, on target or behind with these goals. These goals take into account the last 5 year average return, so don't rely on this to much to hit your goals.
Trading212 has pulled something out the bag, with fractional shares being the first great move to now the Pie. Which brings it close to a simular product in the US called M1 finance. In my opinion trading212 is creating a platform for all types of investors. Whether you like ETFs, individual stocks, maybe you prefer dividend investing with a mix of growth investing but wanted to break up your portfolio. Well now you are able to have multiple investment strategies all in one place instead of multiple accounts. With them working on bringing DRIP to all stocks and fixing how your pie interacts with individually brought stocks its a no brainer. Even to have the option for investors is a great move, especially for those who want the hands off passive approach to investing.
Deposit £1 into an invest or ISA account and get a free share worth up to £100. click link below.