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Wealthsimple lunch & learn google
- The document outlines 5 simple rules of smart investing: start early, don't pick stocks, keep costs low, diversify your portfolio, and drown out noise by sticking to your long-term investment plan. - It emphasizes the power of compound returns over time, showing how starting to invest just 10 years earlier can result in hundreds of thousands more by retirement. - Minimizing fees, diversifying across asset classes, and ignoring short-term market fluctuations are presented as keys to long-term investment success.
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Wealthsimple lunch & learn google
- 1. 5 SIMPLE RULESOF SMART INVESTING @getwealthsimple @mkatchen
- 2. Wealthsimple is Canada’sfastest growing online investment manager. We make smart investing easy, low-cost, and transparent.
- 3. Glossary Stocks Bonds Mutual funds ETFs Terms Definitions Ownershipstake in a company - also known as equity Debt investment in which an investor loans money to a company or government Pool of funds for investing in stocks, bonds, and other assets Mutual funds that trade on an exchange
- 4. - Burton Malkiel,author “Focus on what you can control and think long term.”
- 5. Rule #1: Startearly
- 6. Einstein called compounding"mankind's greatest discovery” 3 friends (ages 30, 35, 40) start investing $5,000 per year until they are 65. By that time, they will have invested: $125,000 $150,000 $175,000 403530
- 7. $399,772 $935,511 30 Age 6535 Impact of startdate on wealth* 40 $616,729 *Assumes $5,000 annual contribution, 8% annual returns. 10 years can add $0.5MM+ to your long term savings
- 8. Rule #2: Don’tpick stocks
- 9. Over 80% ofprofessional stock pickers fail to beat the market Source: Vanguard calculations using data from Morningstar. Fund classifications and benchmarks provided by Morningstar. CN Equity Int’l Equity US Equity CN Bonds Percent of funds that under perform 0 10050 72 81 86 98
- 10. Personal anecdote: winninga stock picking contest at age 12…
- 11. … my winningpick lost 95% of its value between 1999 - 2001 Contest close 12/06/1999 MGI Software closing stock price Acquisition 12/04/2001 $24.40 $1.18 Source: CBC acquisition announcement, Canada Trust Investment Challenge contest details
- 12. Rule #3: Keepcosts low
- 13. Canadians pay thehighest fees of any developed country Average equity mutual fund fees by country (%) 2.42 0.82 Canada USA China India Italy Belgium Spain Norway Korea France Thailand Taiwan Singapore UK NewZealand Japan Germany Denmark SouthAfrica Sweden Netherlands Switzerland Australia *Morningstar Global Fund Investor Experience Report, 2013
- 14. Would you pay$300K for financial advice? $509,858 $800,594 0 Years 3015 1.6% in additional fees can destroy 36% of your long-term wealth Growth at 2.42% fees Growth at 0.8% fees * Average Canadian equity mutual fund charges 2.42% vs USA average fee of 0.8% ** Assumes $100,000 initial deposit, 8% annual returns
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- 16. Markowitz won aNobel Prize for discovering that diversification reduces risk without hurting returns Asset classes don’t always move in the same direction Source: Morningstar, annual performance by asset class
- 17. 2 assets 6assets 10 assets Source: Bloomberg as of 3/31/14, 10 years from January 2004 - February 2014 Here’s how it works Impact of diversification on risk and return 2.26%Returns 13.3%Risk 0.17Ratio
- 18. 2 assets 6assets 10 assets Source: Bloomberg as of 3/31/14, 10 years from January 2004 - February 2014 Here’s how it works Impact of diversification on risk and return 2.26% 5.49%Returns 13.3% 8.49%Risk 0.17 0.65Ratio
- 19. 2 assets 6assets 10 assets Source: Bloomberg as of 3/31/14, 10 years from January 2004 - February 2014 Here’s how it works Impact of diversification on risk and return 2.26% 5.49% 9.72%Returns 13.3% 8.49% 10.17%Risk 0.17 0.65 0.96Ratio
- 20. Rule #5: Drownout the noise
- 21. Know your riskprofile Risk survey Risk discussion • Online survey • Ability & willingness to take risk • Meet with an investment advisor • Investment goals
- 22. Have the disciplineto stick to your plan Market returnsEquity fund flows 2002 2008 2013 In 2009, $150B flowed out of equity funds even as markets came roaring back Notes: Cash flows represent net cash moving in or out of stock funds. Market returns are based on the S&P/TSX Composite Index. Sources: Morningstar for cash-flow data; Thomson Reuters Datastream for market returns.
- 23. Recap Rule #1: Startearly Rule #5: Drown out the noise Rule #2: Don’t pick stocks Rule #3: Keep costs low Rule #4: Diversify
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- 27. We assess yourrisk profile and investment goals to help you create and stick to a long-term investment plan Risk survey Suitability call • Online survey • Ability & willingness to take risk • Phone call with your Wealth Concierge • Investment goals
- 28. We build youa fully-diversified portfolio across 8-10 asset classes, customized for your risk tolerance
- 29. We monitor yourportfolio every day and automatically rebalance it to keep you on track Expectedreturn Risk Your asset allocation will drift from its target as markets move
- 30. We optimize yourportfolio for tax efficiency on a daily basis $25 “harvestable” tax- loss benefit per share. $75 Aug Sept Oct $100 Tax-loss harvesting example* * Illustrative example
- 31. Transparent and intuitivereporting via web and mobile
- 32. Team of advisors JoeCanavan Prof. Eric Kirzner Roger Martin David Ossip Dan Debow Andrew D’souza
- 33. How to doit yourself (simple) Risk assessment: wealthsimple.com ETF selection: wealthsimple.com/example Brokerage account: Virtual Brokers, iTrade, Questrade, Qtrade Further reading & support
- 34. Google Offer Get yourfirst $10,000 managed free (expires 2/20) wealthsimple.com/google
- 35. Disclosures Wealthsimple Financial Inc.is registered as a Portfolio Manager in Ontario, British Columbia, Quebec, Manitoba, and Alberta. Securities in your account are protected up to $1,000,000 CDN. See www.cipf.ca for more details. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss. We do not provide financial planning services to individual investors. Read our Full Disclosure at wealthsimple.com/legal/.disclosure. Copyright 2014 Wealthsimple Financial Inc.