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We won’t tell anyone, and, really, it’s nothing to be ashamed of. We even have it on good authority that lots of your neighbours feel the same way — even Guillermo and Lauren. You, like millions of other Canadians, are “crypto curious.” What do we mean by that? We mean that you’ve been hearing a lot about crypto currencies. That maybe you know folks who’ve invested, or you’ve heard the opinions of crypto evangelists like the Silicon Valley venture capital firm Andreessen Horowitz who just called crypto “the future of finance” and think that, like the internet, it is “poised to transform all aspects of our lives.” But at the same time you’re understandably cautious about a market that’s still speculative and risky, and in which you’re not an expert. So for all the crypto curious out there who want some exposure but only if it’s part of a smart overall investment plan, Wealthsimple has some fantastic news for you.
We are proud to introduce the first ever group retirement fund in Canada that allows you to invest in cryptocurrencies. Yes, the company that’s always steered you right with highly diversified, sophisticated investment strategies for retirement is adding cryptocurrency investment into our GRSP platform, Wealthsimple Work.
So how does it work? Pretty simple. Like this:
Does your company use Wealthsimple Work for your group retirement plan? Yay! That means you can choose from a range of portfolios, depending on what’s right for your financial situation and your goals. That includes standard portfolios, Social Responsible Investing (SRI), Halal — and yep, starting now, a portfolio with crypto.
Does that mean all your retirement savings are going to be invested in crypto? Nope. Our crypto portfolios put up to 3% of the money you invest into crypto ETFs made up of the two largest currencies — Bitcoin and Ethereum. The rest of your money is invested in the same type of globally diversified stocks and bonds as all our portfolios.
Wealthsimple will rebalance your portfolios to make sure the proportion of your holdings don’t get out of whack, so you can maintain the right risk profile to stay on track for your financial goals.
Wait, isn’t crypto too risky to count on for my retirement? Our goal for clients who are interested in crypto is simple: you won’t miss out if crypto turns out to be the asset class of a generation, but you won’t go broke if it’s not.
But yep, crypto is risky. Given that cryptocurrencies have only been around for a handful of years, nobody really knows what their future holds. There are super smart folks like Andreessen Horowitz who are crypto bulls; and on the other side you have famed investor Warren Buffett who predicted “a bad ending” for Bitcoin. Crypto is different from other investments in that it’s possible it could lose most or even all of its value; it’s also possible that it could grow in a way few investments have the possibility of doing. It’s what we call, in a word, risk. And to help manage that risk, our portfolio allows you to benefit from the potential returns of crypto assets without putting your retirement outcomes at risk. Remember, only between 1-3% of the portfolio is invested in crypto.
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One note on how rebalancing helps mitigate your risk: if crypto prices skyrocket, retirement portfolios will automatically rebalance and reallocate your gains into more stable investments like stocks and bonds. In the event the entire crypto sector tanks, we’ll never liquidate your other retirement investments to buy more, which is how rebalancing would work in our other, non-crypto portfolios. So you get the opportunity for upside but limit your exposure to downside. And a bonus: because your crypto investment is held in a tax deferred account, your won’t pay taxes on your gains until you begin to withdraw funds when you retire.
Who can invest? If your company uses Wealthsimple Work, and your administrator decides to make our portfolios with crypto one of the investments available to you: you’re in. If your company uses Wealthsimple Work and your administrator has not opted in to crypto, and you’re interested, just let them know.
What if my GRSP isn’t with Wealthsimple Work? We humbly submit the question: wouldn’t this be an opportune moment to pop off a friendly email to human resources and share this good news about this new portfolio? And if you own a company or are in the position of influencing decisions about a company’s retirement plans, might it be a particularly good time to kick the tires on Wealthsimple Work? We know that you’ll not only fall in love with our GRSP, whether it includes crypto or not, but also Wealthsimple’s happy army of on-call experts, here to answer any GRSP related question you could ever have.
A note of reminder: no one who uses Wealthsimple Work has to invest in crypto, or even make portfolios with crypto an option for employees.
*The content on this site is produced by Wealthsimple Technologies Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only.
Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently hosts "The Originals" podcast and writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier.