Understanding Auto-Buy for Automated Investing

The Auto-Buy feature in SageMaster's AI Basket platform allows you to implement Dollar Cost Averaging (DCA), a powerful investment strategy that involves investing a fixed amount at regular intervals regardless of market conditions. This systematic approach helps reduce timing risk and creates a disciplined investment habit.

Benefits of Scheduled Purchases

Risk Mitigation

• Reduced Timing Risk: By spreading investments over time, you avoid the potential downside of investing a large sum at market peaks

• Volatility Smoothing: Purchase more units when prices are low and fewer when prices are high, potentially lowering your average cost basis

• Emotional Discipline: Removes emotional decision-making from the investment process

Practical Advantages

• Budget-Friendly: Align investment amounts with your cash flow and financial situation

• Consistent Exposure: Maintain ongoing market participation regardless of short-term volatility

• Long-Term Focus: Encourages a sustainable investment approach aligned with long-term goals

Setting Up Scheduled Purchases

Initial Configuration

1. Access Your Basket:

   • Navigate to your existing basket or create a new one

   • Find the Auto-Buy section in the basket settings

2. Enable Auto-Buy:

   • Toggle the Auto-Buy switch to "On"

   • This activates the scheduling options

3. Set Investment Amount:

   • Enter the fixed amount you wish to invest per cycle

   • This amount will be consistently invested according to your schedule

Scheduling Options

• Best for: Aggressive DCA strategies or highly volatile markets

• Configuration:

  • Select "Daily" option

  • Choose a specific time for the daily purchase

  • The system will route trades daily at your specified time

• Best for: Balanced DCA approach with moderate frequency

• Configuration:

  • Select "Weekly" option

  • Choose day(s) of the week (e.g., Monday, Wednesday, Friday)

  • Set specific time for routing

  • The system will invest on your selected day(s) each week

• Best for: Long-term investors with scheduled income

• Configuration:

  • Select "Monthly" option

  • Choose a date between 1-28 of each month

  • Set specific time for routing

  • The system will invest monthly on your chosen date

Advanced Configuration Tips

Optimizing Purchase Frequency

Consider these factors when selecting your purchase frequency:

1. Market Volatility:

   • Higher volatility markets may benefit from more frequent purchases

   • Lower volatility markets may work well with less frequent purchases

2. Transaction Costs:

   • Be aware of any potential transaction costs that might impact very frequent purchases

   • SageMaster works to optimize these, but they should still be considered

3. Capital Availability:

   • Align purchase frequency with your cash flow

   • Set up purchases after regular income deposits for seamless investing

Adjusting Your Strategy

You can modify your Auto-Buy settings at any time to adapt to changing market conditions or personal circumstances:

1. Changing Amount:

   • Increase or decrease your periodic investment amount

   • Consider increasing during significant market downturns

2. Modifying Schedule:

   • Adjust frequency based on market conditions or personal needs

   • Temporarily pause during uncertain periods without losing your settings

3. Supplementing with Lump Sums:

   • Consider adding occasional lump sum investments during significant market dips

   • Use the "Add Capital" feature for these opportunities

Monitoring Your Auto-Buy Performance

Track the effectiveness of your scheduled purchases through:

1. Event History:

   • View a complete log of all Auto-Buy transactions

   • Track actual routing times and amounts

2. Performance Analysis:

   • Compare your DCA approach against lump-sum alternatives

   • Evaluate your average purchase price against market averages

3. Allocation Impact:

   • Monitor how regular purchases affect your overall asset allocation

   • Consider combining with rebalancing for optimal results

"Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant." — Warren Buffett

Happy Trading!

The SageMaster Team

Disclaimer: Trading involves significant financial risk and can result in substantial losses. Past performance does not guarantee future results. SageMaster does not provide financial advice. Users should ensure compliance with local regulations.