I was reviewing some data when I realized a lot of people are seriously wondering and interested in the answer to the question of if they should use Rise for their investment or Bamboo and its alternatives (Trove and Chaka).
First, it gives me joy that you are thinking about that. It means you want to do what’s best for you. You want to leverage on an advantage that no generation before us had. Secondly, I should mention to you that your goal is to save your money, make more money and not lose your sleep in between. It’s not to show off on anything at all.
Difference between Bamboo and Rise
Bamboo is a trading platform that allows you to buy stocks and hold until you wish to sell.
Bamboo provides the platform where you can buy an individual stock, ETF, Inverse ETF or anything that is listed on US stocks exchanges. The responsibility of knowing what to buy and when to buy it rest on your shoulder. And so is the responsibility of knowing what to sell and when to sell.
Full control lies in your hand. Bamboo makes money from you by charging you a trading fee on every transaction. When you buy and sell you get charged for those activities.
Note: everything I have said and will say of Bamboo is the same for Trove and Chaka since they have the same business model.
Rise on the other hand is an investment manager that offers different investment products for you to choose from and invest in. The three products currently being offered are
- Fixed Income – a form of investment whose return and maturity are fixed and determined from the inception of the investment. That is, once you invest, you can’t withdraw your money at any time until maturity and you are fairly certain about what the return will be upon such maturity. You may actually withdraw before maturity but you will have to pay some charges. This is considered low risk because it is a debt instrument with collateral
- Real Estate – this works like fixed income as well. You have to hold it until maturity which you would set from the beginning, and you can’t withdraw your money anytime before that maturity hence you will pay some charges. The difference is that you can’t tell ahead of time what the return on investment would be. However, since it is a fund that invests in properties with rental income in the US, it’s a great product as well and consider medium risk.
- Stock – risevest selects some good companies listed in the US and just like an ETF would operate, they invest your money in that basket of good companies. If you invest $100 for example, you would be buying as many stocks as is in that basket at the time. And what’s in your basket changes as often as Risevest changes it.
It’s called Rise Equity Index and currently has 48 stocks in the basket. Rise has often said that their goal is not to beat the market but to select a couple of great companies to invest in and if that beats the market, it would be great. That is the right way of looking at things if you ask me. It’s an appropriate optimization. 2020 performance is yet to be made public but 2019 was 19% for the number of months they were in operation.
Rise currently makes money from what is called a management fee. They charge up to 2% on total assets under management on the condition that you make a minimum of 10%. Read more about that here.
Which one should you choose?
Now that you understand the difference between both, it’s only fair for you to consider which one you should choose. To start with, nothing is stopping you from using both of them if you so wish.
With that in mind, if you are the type that does not want to go through the rigour of having to search for what to buy in the stock market then Rise is the best option available for you. If you are not interested in all the euphoria that owning an individual stock brings, and you don’t want anything more complicated than you already have in your day to day life, then Rise would probably just be perfect for you.
Also, if you want to exposure to other assets like fixed income and real estate, only Rise offers that. If you don’t want to take on a lot of risks and can’t bear seeing your money occasionally give negative returns, then Rise products are your best option. It’s the simplicity that makes Rise stand out. All you have to do is deposit your money and with few clicks invest your money.
On the other hand, if you are interested in the workings of a business, you want to know how the stock market works, you are ready to pay the price of putting your money in the stock market then Bamboo and its alternatives (Trove and Chaka) is a good go. If your goal is to trade in the market, also Bamboo is the way.
By the way, trading means buying and selling of stocks within a short period of time. Investing on the hand is done with a long term view.
However, this is not a rule and nothing should stop you from using both services if you so wish. But your goal again is to save your money, make more money and not lose your sleep in between. Don’t optimize for any other thing. Don’t allow the fear of missing out to push you to do what will make you lose your money. It’s your hard-earned money and your number one responsibility to that money is not to lose it unnecessarily. That’s an important responsibility even before multiplying the money.