Weekend Reading: Create Your Own Robo-Advisor Edition

Robo-advisors have been around for a decade and, while its promise to disrupt the traditional financial services model has so far fallen flat, the concept of an automatically rebalanced, low-cost portfolio of index funds is still incredibly sound.

The investing landscape continues to evolve and when Vanguard introduced its suite of asset allocation ETFs in 2018, the robo-advisor model suddenly looked less appealing.

Indeed, for a fee of only 0.24%, DIY investors could build their own globally diversified and automatically rebalancing portfolio with just a single fund.

There was just one problem. For many investors, the idea of opening their own discount brokerage account, transferring existing accounts over to the new platform, and buying their own ETFs (even just one ETF) on a regular basis is quite daunting.

Wealthsimple Trade has elegantly solved that problem with a neat feature to automate contributions AND investment purchases.

If investing has largely been solved with index funds

And investing complexity has largely been solved with asset allocation ETFs

The missing ingredient was how to automate the investment purchase to truly take a hands-off approach with your low cost asset allocation ETF 👇

— Boomer and Echo (@BoomerandEcho) April 16, 2024

Log-in to the Wealthsimple mobile app, tap your profile in the upper right, tap the settings gear in the upper right, and tap “automations”.

Tap “recurring investments”, tap “set up a recurring investment”, enter your chosen asset allocation ETF ticker symbol in the search field, and then tap the appropriate ETF.

Set up a recurring investment pic.twitter.com/5DYRVeq1QG

— Boomer and Echo (@BoomerandEcho) April 16, 2024

Tap “buy”, tap the order type drop down in the upper right (should say “market” or “limit”), and tap “Recurring” at the bottom of the list.

Change “market” order to “recurring” pic.twitter.com/sUqOcVJVI9

— Boomer and Echo (@BoomerandEcho) April 16, 2024

Now set up the amount you want to contribute, your start date, the frequency of contributions, your funding source (i.e. chequing account), and which account type you’re contributing to.

Tap “Review”, and the tap “confirm recurring investment”.

Review your order and hit submit.

You’ve just set up automatic contributions that will automatically purchase shares of your chosen asset allocation ETF on a regular schedule. pic.twitter.com/bTKJ1z9IyV

— Boomer and Echo (@BoomerandEcho) April 16, 2024

This process will even buy fractional shares of your ETF, meaning every single dollar of your contribution will go towards your ETF purchase.

There you have it – you’ve just created your own DIY robo-advisor – a completely hands-off and automated investing experience!

Wealthsimple Trade also has an impressive promotion on right now where you can get a 1% match (no limit) when you deposit or transfer more than $15,000 into your account. The more you fund, the more you earn.

Use my referral code – FWWPDW – and we’ll both get $25 when you open and fund your account.

This Week’s Recap:

When looking at your financial projections over time, your numbers tell a story about what’s possible (or not).

No new posts from me for a few weeks as the kids’ school and activities wind down and we furiously scramble to get our work done before our upcoming trip to Europe.

From the archives: Build if/then statements into your financial plan.

I’ll have our bi-annual net worth update at the end of the month, and then we’re heading to Europe for three weeks so expect posts to be more sporadic.

Weekend Reading:

First up, I was absolutely gutted to find out that one of my favourite financial writers, Jonathan Clements, was diagnosed with cancer and only expects to live another year. Truly heartbreaking. All the best to you and your family, Jonathan.

From the Jonathan’s Humble Dollar blog – should we worry about markets being overvalued?

A professional retirement coach shares the three biggest mistakes that retirees make.

Tennis legend Roger Federer won 80% of his matches, but just 54% of all the points played. This is analogous to investing, where markets go up on slightly more days than they go down. The trick to getting legendary results with your portfolio is to stay invested and contribute regularly.

How do social media comparisons impact regular investors? Paging Roaring Kitty.

Marc at Loonies and Sense shares a really neat way to visualize the global markets.

Here’s Robin Powell on why picking the next Google or Amazon is extremely difficult:

“Why spend effort, time and money looking for needles when you can easily and cheaply buy the haystack?”

How Canada’s broken account transfer system led Wealthsimple to automatically reimburse transfer fees.

Morningstar’s Christine Benz took a six-week break from work and came back with some insights on retirement and life.

Many Canadians underspend in retirement for no good reason. Here’s what they can do (subscribers):

“They found retirees consistently spend approximately 75 per cent of what they could afford to based on available assets, with underspending increasing as retirees get older. Yet, they also found that after controlling for different levels of wealth, retirees with a larger proportion of guaranteed income spent more each year than retirees with a larger proportion of investments.”

Baby Boomers face a retirement like no generation before them, and rather than being the ‘beginning of the end,’ it’s the beginning of a new life phase.

A Wealth of Common Sense blogger Ben Carlson shares why his savings rate hit an all-time high in 2021, and why he feels that was more of a mistake than an accomplishment. I’ve had a similar experience.

Borrowers leaving money on the table by not negotiating their mortgage renewal rates.

Finally, is flying in Canada getting more expensive? It certainly seems that way.

Have a great weekend, everyone!