Investing is not a sure thing, and for most people, it’s not an easy thing. It’s complicated, risky, takes time, and requires constant education & research. It’s no wonder 66% of millennials say investing is “scary or intimidating,” according to a 2018 survey. Even though they know it can be fruitful...they also know they can get burned.

Getting professional advice isn’t always the easiest experience either. 43% of millennials feel hiring a financial advisor is an intimidating experience. Of those, 29% are worried they would fall for a scam. They want to invest, but many don’t feel ready...they want good advice, but many aren’t sure how to get it.

At Soon, we know people need better investing options. They need services that make investing easier and employ sound principles so they can feel more peace of mind. Soon’s automated cash flow investing strategy elegantly combines investing principles to provide a more holistic way to invest. This includes principles such as dollar-cost averaging, increasing probability, diversification, mean reversion & not trying to time the market.

Dollar-cost Averaging in...Dollar-cost averaging out

Deciding which assets to invest in is challenging enough. Trying to predict future prices and make stressful decisions on when to invest in those assets just adds to that challenge. Dollar-cost averaging is a common and widely-used strategy that not only simplifies this process but may also reduce the potential negative impacts of volatility. And Soon has put a unique twist on this strategy.

Soon automatically invests according to your investment schedule. By doing this on a regular basis, you are in effect employing a dollar-cost averaging strategy to your investments...taking positions in investment assets over different but close periods of time.

Soon’s unique, patent-pending approach dollar-cost averages as you spend. Every time you spend with Soon, your highest available gain is sold. Most people transact daily, so by pairing divest to the moment of spend it’s possible to divest more often, taking advantage of small gains when they are available. This has a similar effect to dollar-cost averaging on the way in, spreading out divestment moments across a variety of prices, and likely reducing exposure to the negative potential impact of volatility.

This approach is also similar to rebalancing, another tried and true investment strategy. By exiting investments at regular intervals the overall portfolio is partially rebalanced...clearing out gains when the opportunity coincides with a spending event. Then repurchasing at regular intervals acts as the other half of the rebalance. By generating constant ins and outs Soon is also providing a constant rebalancing effect across the account.

Different Types of Eggs in Different Baskets - Diversification

Investing all of your money into one asset at one moment in time is probably pretty risky. Why? Because then all of your eggs are in one basket. If that one asset drops, you experience loss across your entire investment. That’s why many financial advisors encourage their clients to diversify their investments.

Soon helps you to diversify your portfolio with different types of investments. This increases the chance that even if some of your investments are down in the markets, there may be others that are up...reducing the negative potential impact of volatility. 

Maximizing Probability by Utilizing Positions 

In fishing, the more lures you throw in the water, the higher the chances you may catch something. Investing can be similar. The more unique investment positions you take over different points in time, the higher the chances that at any given moment, something may be up in the markets.

To understand Soon’s approach to increasing probability, it’s important to also understand investment positions. Soon defines investment positions according to three attributes:

1. The type of asset (Bitcoin, Etherum, etc.)
2. The price of the asset at the moment it was purchased
3. The amount of that asset that was purchased

With Soon, invest and divest events are managed by the individual position. Soon’s wealth engine does not worry about the overall performance of any asset category, instead, positions are tracked separately, and divest decisions are based upon the performance of each individual position.

By investing often, across an array of investment assets, and potentially across investment classes, Soon’s wealth engine is presented with increased options, meaning at any given moment there are more potential gain/loss scenarios. And with increased options, the probability that one investment position may be up at any given moment increases.

For example, if your portfolio consists of 30 unique investment assets and you deposit into your Soon account twice each month, that can add up to over 700 unique investment positions in one year. With more investment positions, taken across a broad span of time, the odds increase that at any given moment one of those positions is going to be up in the market. And by divesting at spend, assuming you spend fairly often, it may increase the probability that a gain is available at that moment.

By consistently making sound decisions based on probability, over time good things can happen. Soon was built with this mentality at its core.

“Successful investing is not about one or two brilliant decisions, it’s the result of thousands of disciplined decisions over the course of one’s life, all based on rational probability theory.”
- Model Investing Research Team

Automated Invest/Divest Done Right

Let’s use that last example once again. Assume you had over 700 unique investment positions, but you had to manage every single one of them on your own. That means you first would have had to research each asset and track each one every day for a year and make over 700 investment decisions. But that’s not all! You’d simultaneously have to be tracking all the positions you have previously invested in to decide when to divest those positions. All of that is incredibly time-consuming and stressful…how could you pull it off if you weren’t focused on it full-time?

This is exactly why Soon’s automated wealth engine is so useful. We use technology to do the hard work for you, making it possible to hold hundreds of simultaneous investment positions without needing to worry about each one. Just spend with your debit card and let Soon take care of the rest.

Unlocking Short-Term Mean Reversion 

You’ve probably seen a crypto price chart before. It’s a line that starts at one point in time and goes up and down over time. Well, if you draw a straight line across the median price during that period of time, you’ll notice that the price crosses over that line multiple times. This is mean reversion, and its pattern varies depending on the amount of time the price chart represents. Mean reversion is a well-known financial theory, markets go up and down but as time passes they tend to cycle back through their long-term average.

Now, if you zoom in to a shorter period of time, you’ll notice different instances of the price crossing the median line. That’s because by changing the time period, the average price has also changed, highlighting a different set of market fluctuation patterns that result in different gain opportunities. By tying the investment cycle with the cash flow cycle, investment lifecycles are brought into the near term. That means it becomes possible to take advantage of opportunities correlated to short-term mean reversion. You can learn more about this in our blog post, Going on the Offense with Short-Term Volatility. 

So opportunities to realize a gain may actually increase by tracking each individual investment position by the shortest increment of time available and adding to that an increased amount of divestment moments. Soon can play both the short-term and long-term mean reversion game. Some investment positions may sit around longer than others, but as time passes there is an increasing probability that investment positions will experience a gain...and Soon can help you take advantage of those opportunities when they coincide with a transaction.

An Alternative to Timing the Market

Nobody knows the future, unless you are an oracle…or Dr. Strange. But you are most definitely not those things, so that means you don’t know the future. Nobody does and that also means nobody knows exactly what the markets are going to do in the future. To predict the markets, or speculate, you have to try to time the market.

The problem with prediction & market timing is that it’s not possible to guarantee you will always be right about the future. There will always be unexpected, unpredictable market events and occasionally massive Black Swan events occur, foiling the best investors and the most advanced predictive algorithms.

Timing the market is a practice with many potential pitfalls. It’s not for the faint of heart, and to be really good at it you may need to become a full-time trader. There are two main aspects to timing the market…timing the moment to purchase an investment, and timing the moment to sell the investment. Both of these decisions require prediction and subject traders to the emotional pitfalls that are commonly experienced with prediction…like FOMO, Panic and FUD.

Soon takes a unique approach when making invest and divest decisions. Rather than basing these decisions on prediction, Soon aligns to random, yet consistent spending patterns…timing investments with the moment of deposit and divestments with the moment of spend. By doing this, Soon does not try to predict the perfect time to make buy/sell decisions. Instead, it is opportunistic and without prejudice, making the most advantageous divestment decision at the moment of spend, considering only data that is 100% sure (current market price and price at time of purchase), without being swayed by the uncertainty of the future. 

By taking gains as they are available, even if they are small, it can add up over time. And by automating that process and pairing it with spend events, it may also reduce the time commitment and emotional stress that commonly comes with timing the market.

Less Emotion, Better Decisions

As mentioned earlier, one of the most common pitfalls for investors is making irrational investing decisions born from strong human emotions or instincts. Although this is especially true for less experienced investors, it can be the downfall of even the very best. When speculating, it’s important to choose a strategy and almost always stick to it no matter what happens. But that can be extremely challenging when hype, fear, panic, peer pressure, or other emotions come into play.

That’s why Soon creates a layer of separation for you. The point is to not be constantly thinking about your assets, to not be aware of what’s up and what’s down at any given moment. There are plenty of services out there that allow users to speculate on the market, but Soon is different. When you’re not worried about each investment position, you are less likely to make an emotional blunder. Soon keeps things random and nonemotional, so the invest/divest decisions are always made according to the strategy. And all you need to do is spend with your debit card in the way you normally do.

Soon was designed for people who want to better utilize their cash flow, regardless of their investment experience. We built Soon for you. Get on the waitlist for early access to Soon by visiting Soon.app.