What is Wealthsimple’s investment strategy?

Investing is confusing, right? We don't think it should be. Here at Wealthsimple, we bring it back to some key principles. Let's break down our approach:

1) Diversification - How many times have you heard 'do not put all your eggs in one basket'? The single biggest driver of the portfolio (think “basket”) performance is how you spread your investments across different assets (think “eggs”), in our case that is equities and bonds (not just at home but around the world). By spreading your investments or diversifying, we aim to help investors achieve a higher rate of return while taking less risk; so making your investment journey as smooth as possible.

2) We use “passive” investments as the building blocks for our portfolios. Why? Two reasons; clarity and cost. So first what's the alternative choice to “passive” investments? Simply put “active” investments. With an actively managed investment the investor pays an investment manager to pick where they feel the best opportunities are in a given market. Do they tend to beat the market? Generally not over the year and barely ever year on year (look at the SPIVA info if you would like to see the research). Markets will move unexpectedly from time to time but as passive investments are based on a set of rules, what you are investing in should not be a surprise. So you have clarity on what you are getting. Plus you pay far less for passive investments as you are not covering the pay cheque for the investment manager and team of analysts. Because you pay less that helps grow your long term return. Fewer surprises and better performance.

3) We focus on you and your long term goals - you are the boss! We are not going to be rocked around by short term hype in the markets and want to help you take the same approach. We want all our clients to achieve their life goals with investment portfolios designed to support them, by encouraging you to invest regularly and the earlier you can start the better. This makes a massive difference to building long term wealth and peace of mind. The numbers may really surprise you....

Over the past 100 years, the markets have survived depressions, world wars, tech bubbles, and several financial crises. What the academics think is important, and our strategy, is being in the market for the long term, making sure we stay disciplined in our investing plan, using passive investments, only adjusting things when it really makes sense and keeping our costs as low as possible.

Simple, right? But if you still have questions, we're here to help. Please send us an email at support@wealthsimple.com or call us at 0800 808 5653.

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