In this episode, the ReSolve team chats with Ben Reeves, a seasoned financial professional with a wealth of experience in portfolio construction and investment strategies. Ben shares his journey from working at Bridgewater to facing a health crisis, and eventually joining Wealthsimple. The conversation delves into the intricacies of allocation research, portfolio design, and the challenges and opportunities in the private investment space.

Topics Discussed

• Ben's transition from institutional investors to portfolio construction and his learnings from Bridgewater

• The impact of a health crisis on Ben's career and his shift to Wealthsimple

• The essence of long-term investing and the importance of putting money at risk in a reasonable way

• The exploration of privates as a first step in diversifying investment portfolios

• The challenge of tracking error constraints in portfolio design and how Wealthsimple navigates this

• The behavioral advantage of privates and the fear of giving up liquidity

• The difficulty for active managers to reliably outperform without overweighting certain sectors

• The role of gold and commodities in diversifying portfolios and mitigating risk

• The importance of putting money at risk in a reasonable way and avoiding performance chasing

• The potential of leverage as a diversifying tool or a risk-reducing tool

• The constraints and considerations in adding leverage to portfolios

• The personalization of portfolio construction and the shift towards risk parity

This episode provides a deep dive into the world of portfolio construction, the role of privates in diversifying portfolios, and the challenges of tracking error constraints. Ben Reeves offers valuable insights from his experience at Wealthsimple and Bridgewater, making this a must-listen for anyone interested in investment strategies and portfolio design.

This is “ReSolve’s Riffs” – published on YouTube Friday afternoons to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

and then investors learn by mistakes, right?

2

I know that's, that's how I learned.

3

And, you know, if you're earlier in

your career and you, if you performance

4

chase now, it can work out for a while,

probably not a great long term strategy.

5

And you'd sort of, you know, I

think one of the things you learn

6

as investment managers, you're,

just, like, wrong all the time.

7

You learn to diversify, and people

generally need to learn, just

8

experience that for themselves.

9

So you can provide as much

context and help as you can.

10

And then, you know, things happen and,

hopefully, they'll still be compounding

11

and stay in the game and stay invested.

12

Adam Butler: Hello and welcome to

another episode of Resolve Riffs.

13

I'm one of the hosts, Adam Butler.

14

I'm the Chief Investment Officer

of Resolve Asset Management.

15

This week we interview Ben

Reeves, who's the Chief Investment

16

Officer at Wealthsimple,

Canada's largest robo advisor.

17

And Ben started his career at Bridgewater.

18

It really shows in how he has structured

Wealthsimple's investment offering.

19

They've really prioritized

diversification in a way that you

20

don't find at many other robo advisors.

21

And you rarely find with

traditional investment advisors.

22

And as part of their rollout of their

sort of diversification category, they

23

started with private investments, private

credit, private equity, and they've

24

taken a really thoughtful approach

to how they both select managers and

25

structure the offering for a robo advisor,

primarily retail oriented platform.

26

We also get into what their vision

is for rolling out more diversified

27

strategies over the next six to 12 months.

28

branching out into the more sort of

hedge fund style, strategies, maybe

29

market neutral, managed futures in

a return stacking context, perhaps.

30

So lots of great grist for the mill here.

31

We really enjoyed the conversation

and I think you will too.

32

Rodrigo Gordillo: right, Ben,

welcome to the resolve riffs podcast.

33

it's been a long time coming.

34

Ben Reeves: Yeah, that's what

we've been talking a long time.

35

Happy to be able to do this finally.

36

This is great.

37

Rodrigo Gordillo: Yeah.

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Yeah.

39

I'm really looking forward to this one.

40

So, you know, everybody's heard

anything that they need to know

41

in the intro of this podcast.

42

So, you know, why don't you, why

don't we kind of let you have a

43

bit of a shot at your background,

just kind of like your, your, your

44

career journey so that we can let the

audience know who they're talking to.

45

Ben Reeves: Sure.

46

Yeah.

47

So it's, it's been like, I guess

everybody, it's been a journey.

48

so I think, I started, it made

me start going back to college.

49

I thought I was going to go, I was

always interested in markets, thought

50

I was going to go major in econ.

51

I took a couple of classes and

I thought they were just not

52

captivating or not interesting.

53

And I ended up studying history of

ideas and said, so I did a bit of

54

philosophy of religion, in college.

55

Like what's the, what was a good, what

were the ideas that everybody thought

56

made sense most profound in life?

57

And how did that change over time?

58

and, and, you know, very, very impractical

major, but something I was just sort of

59

deeply fascinated with at the time and

sort of spent a few years studying that.

60

But obviously like almost

unemployable out of that, right?

61

Like you can kind of think, you

can think it's actually about that.

62

That's sort of all you leave college with.

63

and so I went to a, I went to a startup

64

So we are doing helping companies figure

out, you know, what do you do with

65

the internet to, you know, how do you

change your business for the internet?

66

we did okay for a couple of years.

67

and then.

68

The dot com crash hit and we were

sort of sold for parts to IBM.

69

And that was, that was like my

foundational, corporate experiences.

70

Things are going great.

71

And then, you know, you see the,

see the crash in the two thousands.

72

after that, I went to grad

school at UChicago, studied

73

public policy and business.

74

Sort of wanted to go back to the things

I was interested in in high school.

75

So, you know, learn the econ

again, you know, do it, do

76

some quant training and so on.

77

I spent a few years at McKinsey, and then

shifted to Bridgewater Associates, which

78

is a big hedge fund in Connecticut in a,

I started out doing an investing role.

79

it took the class for, You know, it's a

little old, but took the class for like

80

a new analyst, reported to a 23 year old

for a while, and did asset allocation

81

research for institutional investors.

82

and then shifted over to working in the

portfolio construction group where we were

83

applying risk controls to the systematic

strategies on a, on a daily basis.

84

which, you know,

Bridgewater was, was great.

85

It was, I think I learned a

ton there both about investing.

86

And also like, how do you run an

investing organization in a really, in a

87

really precise way, a high quality way?

88

How do you think about client service?

89

You know, a lot of really, sort

of really great mentors there.

90

And they have really figured out a lot.

91

But towards the end of my

tenure, I, I, my kidneys fail.

92

It was a sort of a health

crisis and, I ended up needing

93

to take a couple of years off.

94

I couldn't do Bridgewater anymore.

95

It's a pretty intense place.

96

Like, you know, Couldn't

pull 12 hour days anymore.

97

but one of my friends had, had, was

an early employee at Wealthsimple,

98

which is a, you know, at the time,

a pretty small startup, based in

99

Canada and, and a robo advisor.

100

And he said, you know, I know you only

have a couple hours a day, but can you

101

come in and help us figure out investing?

102

And it seemed really fun.

103

We had always talked about that at

Bridgewater, you know, how do you,

104

wouldn't it be cool if we had a

robo advisor and, you know, and, and

105

we could really, you know, do it.

106

Give people high quality

investment management at scale.

107

then as a, as my strength return, I was

able to grow my role at WealthSimple

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over time, and I've been WealthSimple

about five or six years now.

109

and basically do everything,

investing it for WealthSimple.

110

So a lot of communication,

we set up our own funds.

111

we, you know, asset allocation.

112

And then, it's also really fun to

work with really great technologists

113

and designers, to, to create product

experiences that, you know, Try to reflect

114

sort of the essence of investing or

the, the essence of long-term investing

115

and compounding to, to our clients.

116

Adam Butler: It sounds like you and I

would be, would be of an age because,

117

I remember going through that whole dot

com with a startup and, You know, guys

118

coming to the office with bags of gold for

you to build on the most basic website.

119

And, my wife was in the internet group at

Boston consulting group at the same time.

120

And so we were just absolutely.

121

Flat out for a couple of years.

122

And then I actually transitioned to IBM.

123

Did you ever work at IBM then

when they, when they sold off or,

124

Ben Reeves: I did.

125

I worked for the right

there for a little bit.

126

The big corporate life was not,

was not for me, but, but I, I

127

worked there for a little bit,

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Adam Butler: yeah, yeah, that was a,

that was definitely an experience,

129

but that whole experience into that.

130

com peak was pretty, pretty wild.

131

A lot, a lot of lessons learned

on the other side of that too.

132

But,

133

Ben Reeves: you know,

134

Adam Butler: so

135

Ben Reeves: everything was totally

brand new and it was, you know, the

136

world was, the world was wide open

and a lot of things we're talking

137

about ended up being the right things.

138

It was just the valuations made

it a pretty difficult cycle

139

for all of us to go through.

140

Adam Butler: Yeah.

141

And I remember during the year I

was at the startup, we went from

142

about 80 people to 180 people.

143

And when I finally left,

they were down to 12.

144

Ben Reeves: Yeah, we were, I think we

were about half our size when we were,

145

when we were acquired is, is it's, and

it's brutal to see that happen to people.

146

Adam Butler: Yeah, that

was, it was bonkers.

147

Um, hard segue here, but I know that, or

my, my sense is that at Wealthsimple, you

148

guys have, you're trying to implement.

149

Many of the sort of, diversification,

free lunch principles that you

150

would have learned, obviously had

hammered into you at Bridgewater

151

and then, espoused in other roles.

152

And that my understanding is as a

first step, you guys have tried to

153

sort of move into the privates space.

154

And I'm just curious, what was your

thinking as you, you know, as you

155

sort of looked across the alternate

alternatives landscape or just

156

thinking how does it land on, we

should try privates first, then.

157

How did you move in that direction?

158

Ben Reeves: Yeah.

159

So how we think about, How do we

think about investing in general?

160

We, we start with just

from a point of service.

161

We want to help our clients

grow and compound wealth.

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And that is pretty clear hierarchy.

163

Like the thing you need to do for most

of our clients, 30s, 40s is save and put

164

your money at risk in a reasonable way.

165

and then we have a base portfolio that is.

166

It's like very CAPM and

conventional, but a little bit tilted

167

towards risk parity principles.

168

We have a little goal, a little

more geographic diversification,

169

some more sharp ratio efficient

equities, a bit more, bonds for

170

asset class diversification.

171

but that's also a difficult thing

for people to understand, right?

172

Like it's just a pattern of returns

and it plays itself out over time.

173

and then, so I look for other ways

where I can offer better diversification

174

or better returns into portfolios.

175

And then, and so I think

that then I, I have a choice.

176

I can do, quantitative strategies that

I think do offer good diversification,

177

maybe a little harder to understand,

or I can offer private assets where,

178

you, you still do get either alpha

potentially, or a differentiated return

179

stream, like we offer private credit.

180

I think that's.

181

That is diversifying.

182

and that seemed like a way that you can,

in a way that makes sense to people,

183

offer a bit more diversification,

a bit higher expected return.

184

Like private credit, I'm just

making loans to mid sized companies.

185

That makes all the sense in the world.

186

and it seemed like a pretty good

place to start in, in getting people

187

comfortable with privates alternatives

and portfolios that might be a bit more

188

resilient or bit more likely to compound.

189

Adam Butler: On the portfolio design

front for WealthSupport, I mean, we

190

obviously have, a wealth book ourselves.

191

We deal with, advisors who run

primarily retail wealth books.

192

So we're constantly dealing with

this kind of Pareto frontier of how

193

can I maximize portfolio efficiency?

194

At some, you know, tracking

error that people can accept.

195

Have you done any quantitative modeling

or sort of general thinking on what

196

kind of tracking your constraints,

and the type of tracking error that

197

people, are willing to tolerate?

198

I'm sure you've sort of tried some

stuff and gotten feedback from people.

199

What have you learned in that journey?

200

Ben Reeves: it's tough because

it's so outcome dependent, right?

201

Like people love the track.

202

They'd love the track here March, 2020

203

know, don't love it and, you know.

204

Now, right?

205

Like where, where you have the

North American stocks you're

206

doing, are doing super well.

207

I, my sense is it's

highly, highly individual.

208

so you have people who are benchmarking

themselves to North American stocks

209

to ask you questions about why you're

deviating from North American stocks.

210

And I think you, you either need to have

a good one on one relationship with them

211

so you can talk them through the trade

offs, or you need to offer them the thing

212

that they're going to benchmark themselves

to, because back to the hierarchy of

213

the most important thing is safe, put

your money at risk in a reasonable way.

214

and then, you know, and then

start improving the sharpe ratio

215

and your, You know, that range of

outcomes that you get over time.

216

but then we have a lot of clients who

are just saying, I trust you, you know,

217

help me put, put your money at risk.

218

we ended up with about a 2

percent tracking our target.

219

we know it's, which is a lot relative

to a lot of, a lot of other portfolios.

220

and I, I think that works for a lot of

clients, but then it's, it's just highly,

221

highly, variable and, and individual.

222

Adam Butler: What's the 2

percent tracking error too?

223

Ben Reeves: So

224

Adam Butler: what do you guys hold

up as a, as a quality emotional

225

benchmark for most clients,

226

Ben Reeves: we made a

reference portfolio that is.

227

sort of try to track towards the median

of like the average mutual fund in Canada.

228

And then we checked it against,

sort of like a, a typical robo

229

portfolio or asset allocation ETF.

230

And it's some representation of, of that.

231

It's just a way to represent expectations.

232

Adam Butler: it's just a

weird, it's well, not weird.

233

It's, it's a bit more complicated

if you're not in the U S because

234

you've got to kind of, especially

in Canada, you know, Canada's

235

Canadians, they'll reference

Toronto stocks or Canadian stocks.

236

If Canadian stocks are doing really

well, and then they'll reference U.

237

S.

238

equities.

239

If U.

240

S.

241

equities are doing really

well, so it's their,

242

Rodrigo Gordillo: Always a moving target.

243

Adam Butler: tends to change over time.

244

Do you not find?

245

Ben Reeves: I, yeah, I, I do find it.

246

It's, it's, it's that set of clients

who are really watching the portfolio

247

on a, you know, even, you know,

three, five year basis, right?

248

Like that's, You don't learn much

over that kind of a time period.

249

but you do find some clients doing that.

250

I think Most of our clients, and the

issue I usually face with most of

251

our clients is more, risky assets

are a good bet to outperform cash.

252

Like that was the big deal two years ago.

253

Right?

254

And I spent, you know, most of a year,

year and a half just talking to people

255

about, I know cash is yielding four or 5%.

256

Their equities are a good

bet to outperform, stick

257

with it when things seem bad.

258

Like that, that kind of basic advice.

259

And then, and what we see is, not, we,

we don't see so much performance chasing,

260

but we see people just not investing

their savings when things feel scary and

261

then waiting for things to feel better.

262

and, I think that, that'd just like put

your money at risk in a reasonable way and

263

try to compound, if I look at our, our,

our, We have, you know, we have brokerage

264

clients and we have managed clients.

265

If I look at the outcomes between the

two, just the fact that our managed

266

clients are putting their money at risk

and compounding, like gives very, very

267

different wealth outcomes for them.

268

I know our brokerage clients, some of them

are training actively for fun, like maybe

269

different, you know, different objectives.

270

but even if you look at say our

flows relative to ETF flows,

271

people are getting in and out.

272

the real advantage is just put

your money at risk over time.

273

Rodrigo Gordillo: And I imagine because of

all that, Ben, that you're seeing better

274

returns in the managed portion rather

than the, DIY portion of WealthSimple.

275

Ben Reeves: Yeah, it's,

it's night and day.

276

I get it.

277

I do a little regression of the DIY

returns and, it's, it's a lot of TSX.

278

It's a lot of, it's not a factor model.

279

It's just like, I just do a simple

regression of like TSX, SPY and

280

NASDAQ actually explains most of

the returns, not even the factors.

281

they explain a lot of returns and

you get a huge negative alpha.

282

a little bit more in risk.

283

But it's basically, it's basically

like sort of attempts at market timing

284

or struggles with ideal generation so

you take too much idiosyncratic risk.

285

Rodrigo Gordillo: Now, as you said,

a lot of this can be, it's, it's

286

always interesting when you have

a platform like WealthSimple where

287

you, you really have built the

business on, on portfolio management.

288

Right.

289

But then you have this side gig of DIYers.

290

I mean, is there a lot of crossover

between the two where you see like 90

291

percent of assets in the managed and

then 10 percent of assets in the casino?

292

Ben Reeves: Yeah, you see

people wanting to do play money

293

or I want to take play money.

294

You scratch this itch or

I believe in this company.

295

and then you see, and then within

our DIY, we see some people who are

296

just investing in ETFs and trying to

compound and then other people who

297

are, sort of in between and, and, and

trying to do both or, or trying to do

298

market timing strategies and so on.

299

And then the, the, obviously because,

because the active strategies have

300

so much more evolve and your ETF

compounders that sort of overwhelms

301

the returns of everybody else.

302

Rodrigo Gordillo: Right.

303

And so, so like, can I just

shift back to the privacy?

304

Cause I think a lot of this backing

error, volatility, risk taking, you

305

know, take, trying to take risks

in order to do better than cash.

306

One of the things that I think I've

been fighting for many years on the

307

private side is this feeling that.

308

You know, the private,

issuers are cheating, right?

309

Like they are, they get to hide

behind a volatility blanket, a

310

dampening blanket that none of us get

311

Ben Reeves: Yeah.

312

Yeah.

313

Rodrigo Gordillo: We don't get to,

we don't get to play in the same way.

314

and you know, I'm throwing my hair,

my arms up and saying, you guys are

315

taking more risks to leave or play,

but in reality, There's obviously

316

a behavioral advantage, right?

317

It is what it is.

318

There's no other way to really, or

at least we haven't figured out a

319

solid way to understand pricing on the

private side on a day to day basis.

320

So do you find that, that behaviorally

people, you guys haven't launched

321

this yet, but is that part of your

Your idea here on the private side

322

that it's going to allow you to

add diversification without having

323

a lot of, people freaking out.

324

Like, is that the main driver here?

325

Ben Reeves: so the, the, the driver,

it's more, you start from like,

326

let me offer a better portfolio.

327

And then I think there, there are

behavioral it, or there's kind of

328

their behavioral trade offs, I think.

329

so.

330

But for example, for, but like, when

we describe what private credit is,

331

we will say like, we made an index

of like, we do liquid index indices.

332

We try to add in the missing ball

and say that this is the role in the

333

portfolio to try to get a sense of

the underlying risk, private equity.

334

Same thing.

335

We take small caps.

336

We add, you know, we add in the,

you know, it's like the excess

337

volatility mystery, right?

338

We add that back in and say, this

is the, you know, this is the

339

impact on your, on your portfolio.

340

So

341

Rodrigo Gordillo: Okay.

342

You guys are actually making,

striving to provide some sort of,

343

transparency into the process.

344

Ben Reeves: Yeah, we try to provide some

transparency, but also like, the problem

345

investors do have and why there's a

behavioral advantage to privates is, is

346

that there is too much volatility relative

to The journey you're on or, you know,

347

your probability of being successful.

348

so, so I, you know, I, there

probably are advantages to that.

349

but I guess there, you have to

think about it both ways, right?

350

so there are, there is a lack of

marketing, but there's also a lot

351

of fear about giving up liquidity.

352

and you know, clients are saying it's,

it's your 40 year retirement portfolio.

353

I'm scared of putting 10

percent into something illiquid.

354

and so.

355

That's equally a behavioral issue

as the, as the lack of marking.

356

And so you try to sort

of educate on both sides.

357

Rodrigo Gordillo: And

that's an interesting topic.

358

I think listeners are going to want

to know how you handle all the issues

359

in privates, especially as markets get

more and more illiquid, more panicky.

360

You know, on the private side, I've seen

a lot of investment advisors in the US and

361

Canada really concentrate that 10 percent

that you speak of, they'll concentrate in

362

like one provider and, and kind of, you

know, say that they're, you know, They

363

have diversified, exposure to privates

and we're seeing a lot of privates take

364

really scary moves, at least to the one,

us watching from, from outside, you know,

365

where, where certain, Certain holdings,

they're not able to pay their yield.

366

And so they're going out and

borrowing in order to be able

367

to then meet their covenants.

368

how are you guys seeing

that in the space right now?

369

And how do you manage that level

of risk, in, in the current cycle?

370

Ben Reeves: Yeah.

371

So I think first thing is we set up our

vehicles is like asset class exposure.

372

So we have the Wealthsimple Private Equity

Fund, and you know, we can then allocate,

373

we only have one manager in there

now, but the manager we chose is LGT.

374

They're an endowment.

375

We're getting, an endowment

portfolio like that, and they

376

are principal investors in it.

377

So, and that, so we start out with

300, 400 companies, it should be able

378

to give you asset class exposure.

379

we're not doing a, you know, here's

your typical drawdown fund with 10

380

platforms and a lot of idiosyncratic risk.

381

So we, we try to manage it both

with alignment because the, I think

382

privates really are the deep end.

383

And a lot of investors and advisors

aren't really set up to underwrite

384

a private manager well, right?

385

You need to do a lot of diligence,

make sure they're honest, do your

386

background checks, keep monitoring them.

387

so we, we try to make sure that

we're highly diversified and that

388

we do get good alignment so that,

and the people managing the money

389

also have their skin in the game.

390

Their net worth is also, in the product.

391

so I think those are probably the,

the, ways that we deal with it,

392

diversify, make sure your alignment

and then make sure you're doing

393

real professional due diligence.

394

and then finally just

do the real modeling.

395

So you're sizing it appropriately, right?

396

Like, like I was talking about, add

back the volatility, make sure you,

397

you know, you have a framework for how

your portfolio should, should, perform.

398

and that's sort of the

combination of things we do.

399

Rodrigo Gordillo: Yeah.

400

Well, you're not putting an optimizer

and getting a 40 percent allocation of

401

privates because they're so low ball.

402

Ben Reeves: we're adding, yeah,

it's where like levered small

403

caps is, is, is private equity.

404

Adam Butler: And so what percentage of the

portfolio is in privates for kind of a,

405

standard autopilot, well, simple mandate.

406

Ben Reeves: Right now it's all bespoke

because privates are so new and we want

407

people to make sure they're comfortable.

408

they, they will go to us for advice

and we, but we'll give a range and

409

then try to show the, show the impact.

410

and then that'll vary

based on the asset class.

411

So, I'm more comfortable putting

412

private credit in there, if it's

senior secured, it will, it can be

413

diversifying to bonds and stocks.

414

then, you know, adding a bunch of

private equity where you're at, or

415

you're adding actual volatility to a

client that's asking you to manage their,

416

you know, manage their risk, for you.

417

So it really depends on the risk

level and then also your, your

418

comfort with privates, and also the,

any liquidity strains that you have.

419

Rodrigo Gordillo: Right.

420

So, let's move on to other areas of

diversification, or lack thereof.

421

when I look at robo advisors,

and I think you guys are at the

422

bleeding edge of trying to be

more to risk parity than others.

423

I

424

Ben Reeves: Yeah.

425

Rodrigo Gordillo: when you look

Vanguard and all those, you're

426

still seeing a traditional 60 40.

427

there's, When you're when you're doing

market cap weighted and you're making

428

that decision to allocate to those what

you're really Allocating to is very

429

concentrated positions in you know,

the mag seven at this point, right and

430

especially when you're doing the US

How do you guys manage that if at all?

431

Is there a way like have you guys

figured out a way to kind of you know?

432

Either mitigate or maybe even add

to them like what what do you guys

433

do with with concentration there?

434

Ben Reeves: So I think.

435

There are two ways you deal with it,

like always as an investment manager,

436

you do portfolio construction and

you do communication and both are

437

probably equally equally important.

438

Communication is probably more important.

439

portfolio construction, we try to, we

allocate to some defensive equities.

440

We do more geographic diversification.

441

We do more asset class diversification.

442

It's a relatively straightforward thing

if you're not trying to, if you're not

443

trying to market time or do tactical, like

that's, those are pretty straightforward.

444

Pretty solid ways to diversify

and improve your sharpe ratio.

445

and then in terms of communication,

we do a lot of education about, I've

446

done a series this year on what does

the equity market cycle look like?

447

Like, what does it look

like over eight years?

448

What's, you know, what can

you expect over that cycle?

449

and also what, like, what is this thing

called an equity market supercycle?

450

What does that mean?

451

Where are we in it?

452

and.

453

A lot of the pitfall I see people

falling into with that stuff is you're

454

saying there is this thing of a super

cycle, therefore you're doomed, right?

455

Which is not the case, right?

456

Late cycle, you can do really, really

well for a long period of time but try

457

to provide that level of transparency

and historical context, but in a way

458

that's very, very highly digestible.

459

Adam Butler: hold on now.

460

Let's maybe, can you say a little bit

more about this super cycle concept?

461

Because, I think we're Rod and I

are both familiar with the concept.

462

Is this sort of the Ray Dalio's long term

credit cycle, or is this a spin off of

463

that or something completely different?

464

Ben Reeves: it's, it's more

just taking the observation of.

465

You know, there have been huge secular

bull markets, huge secular bear markets,

466

and just educating on the fact that

that has been a thing that's happened.

467

So 68 to 82, 82 to 2000, right?

468

2000 where we call it 2012, 13,

and then, and the current one, just

469

so you know, that that's a thing.

470

That's all I'm trying to do.

471

I'm not even saying that here's the,

there's a little bit of interior logic,

472

but here, here's how it works, but more

just because a lot of our clients, right?

473

You've always had a FedPay,

you've been investing

474

Adam Butler: Yeah, right.

475

Ben Reeves: know, just that

is, I think, hugely helpful.

476

Rodrigo Gordillo: And so you're,

it's, it's more of a simple message

477

for the retail people that you're,

that you're dealing with, but

478

you are, do you see a lot of open

clicks on those types of emails?

479

Ben Reeves: Yeah, they do.

480

They, the, the, the secret sauce

is, I work with a great writer who

481

doesn't know much about investing.

482

but he's willing to ask all the

questions until he understands, which

483

makes what we do so much better.

484

What I, what I produce so much

better than I would otherwise.

485

Rodrigo Gordillo: you're getting your

hands dirty on, on the content as well?

486

Ben Reeves: I have a monthly letter series

that I, that I write to clients that

487

we try to like, we have, we have other

writers doing more content, but we try

488

to do one thing a month that we think is

really high quality, that educates on a

489

concept that we think is really important

just with the idea of, of service.

490

Rodrigo Gordillo: Oh, good for you.

491

Okay.

492

And you're using, so you have

a writer that doesn't have any

493

experience and you just say, You

give him an outline, he tries it out

494

and then asks a bunch of questions.

495

Ben Reeves: Yeah.

496

Yeah.

497

Rodrigo Gordillo: we have not found

any success in getting outside

498

writers and asking questions.

499

We'll have to pick your brain

on how to do that later.

500

Ben Reeves: Well, I just write it and

then he just, it's more writer, editor,

501

as opposed, we tried, we tried that way

with the writing and then as you probably

502

saw, I try to fill in ideas that don't.

503

You know, it don't make sense, or

they try to fill in their own things.

504

but if you're just answering questions

and making sure it's accurate, like that,

505

like that's what we do.

506

Rodrigo Gordillo: Yeah.

507

Cause I think communicating that tracking

error that you speak of is very tough.

508

We talked offline about how even CPP

IB is getting a lot of flack for not

509

performing as well as Mag7, right?

510

So it's not just retail.

511

That's.

512

That's pulling their hair out.

513

It's everybody.

514

Ben Reeves: Yeah, I know retirement, like

why not all, why not all stocks for, you

515

know, all the way through retirement?

516

Like it, it, it feels like it's very

much the narratives to support a price

517

Rodrigo Gordillo: not

even all stocks, right?

518

Like I think I should write a

letter just saying, okay, you

519

want me to invest in equities.

520

You want all stocks to wait.

521

You actually want the mag seven,

but if we want to outperform,

522

we should actually overweight.

523

You know, the mag seven and

then see what they reply.

524

It's just, it's such a difficult thing

to do when you have this level of

525

momentum with the largest companies

in the U S making all the returns.

526

there really is.

527

I don't see a way an active

manager can reliably outperform

528

without overweighting those things.

529

Do you?

530

Ben Reeves: Not right now.

531

No, it's, I think the way

you can outperform, like what

532

you're doing, portable alpha,

you can probably outperform.

533

I think You have a good odd of

outperforming, but if you're trying to

534

pick the right stocks, you know, no, it's

a, it's a, especially if you're doing,

535

if you're doing a limited tracking error

on a, trying to outperform over a few

536

years, like it's extremely difficult.

537

Adam Butler: I think one of the most

difficult periods for prudent investment

538

management that we've seen in a while.

539

I mean, to be fair, really since kind of

540

a little bit like that where you've got

this really heavy concentration in U.

541

S.

542

indices where U.

543

S.

544

indices now on a cap weighted

basis are kind of in the 60 percent

545

of total market cap range, right?

546

After 15 or 20 years, well, 15 years of

pretty profound outperformance of both U.

547

S.

548

equities and U.

549

S.

550

dollar relative to most of

the other major currencies.

551

And then at the, at the, the tip of the U.

552

S.

553

equity sphere, you've got these, you

know, whether it's 7 or 10 or 15 stocks

554

that represent just a massive proportion

of both total capital and total index

555

vol, you know, it's, it's just really

difficult that the, the trade off between,

556

you know, Diversification, prudence,

and tracking error to this concentrated

557

benchmark that is just outperforming

everything by a large margin, that's

558

a really difficult tightrope to walk.

559

Ben Reeves: Yeah, I

think it, I think it is.

560

And then the, the companies are, that are

concentrated, they're doing really well.

561

They're great companies.

562

The earnings have been really solid

563

Adam Butler: Yeah.

564

Ben Reeves: that maybe you're

a few questions right now

565

about the AI CapEx story.

566

Does it continue?

567

but it's, they're not obviously at like

40 times earnings or, you know, it's not,

568

it's not that terrible, at this point.

569

and that's where I think you

have to go back to, or we, we

570

go back to our framework of.

571

Let's put your money at risk.

572

we'll counsel you about

performance chasing.

573

but the most important thing is let's

get you in a portfolio that you're, that

574

you're comfortable, comfortable with, and

then investors learn by mistakes, right?

575

I know that's, that's how I learned.

576

And, and, you know, if you're earlier in

your career and you, if you performance

577

chase now, it can work out for a while,

Probably not a great long term strategy.

578

And you'd sort of, you know, I

think one of the things you learn

579

as investment managers, you're,

you're just like wrong all the time.

580

You learn to diversify, and people

generally need to learn, just

581

experience that for themselves.

582

So you can provide as much

context and help as you can.

583

And then.

584

You know, things happen and, you

know, hopefully, they'll still

585

be compounding and stay in the

game and, and stay invested.

586

Adam Butler: O,

587

Rodrigo Gordillo: so Ben, just, I

want to talk a little bit more about

588

portfolio construction, but in the

context of how you're using privates,

589

and when you look, when you think about

privates, how do you decompose that?

590

Do you, do you assume a level of

leverage is embedded in those,

591

in those privates already?

592

And what, what multiple do you ascribe it?

593

Ben Reeves: so we know our funds, so we

know how they're, how they're structured.

594

for, for our private credit fund, we

like, there, there is leverage in there.

595

We can model it and we just,

we just model that volatility.

596

and then we use sort of Both just try

to add that ball into a back test to

597

see what happened, but also use an all

weather framework for private credit,

598

where it's going to be growthy, you've

got a little bit of downside protection,

599

It's a little bit more ambiguous for

inflation than what I like is the

600

discount rate hedge, which we really

don't get in most portfolios, right?

601

Underwrite it with the leverage.

602

You have a similar return to equity.

603

you get that profile, you know,

it can be helpful for a portfolio.

604

and then for, for private equity, it's

more, we, we found, we, we looked at

605

the underlying, earnings volatility.

606

Like made that it's basically small

value is what you get for the underlying

607

earnings volatility added that vol back.

608

and that gives us a reasonable

proxy for saying, yeah, it's

609

not really diversifying, right?

610

that's a reasonable proxy for the

risk addition in the portfolio.

611

And then it, it still has

the environmental flaws.

612

It's very growthy, not great inflation

exposure, and then, you know, not

613

great discount rate exposure, which

we're seeing, like, it just plays out

614

much more slowly in privates, right?

615

Like with, with, a hangover, all

the assets they can't sell now,

616

that is a lot of the discount rate

exposure sort of, you know, they're

617

trying to wait it out, I guess.

618

Rodrigo Gordillo: right.

619

In our other podcast, the Get

Stacked Investment Podcast, we

620

talk about all things capital

efficiency and return stacking.

621

Corey had a theory where, this is Corey

Hoffstein, where he said, you know,

622

a lot of allocators that allocate to

private equity, they're actually, Moving

623

forward, moving toward better portfolio

construction and using capital efficiency

624

in a sneaky way where they're allocating

to the private equity sleeves so that

625

they can get in a little bit of more

leverage so that they can bump up their

626

bonds and other alternatives without

sacrificing the return to equity,

627

which I thought was really insightful.

628

And, you know, maybe it's not

true across the board, but, it

629

certainly seems, that some people

are going to take advantage of that.

630

And, that's why I was asking whether

you guys thought about it that way.

631

Ben Reeves: I guess that I

never thought about it that way,

632

but that that does make sense.

633

We are taking down the, you're taking it

out of equity or that changes the overall

634

volatility, overall volatility and the

contribution you're getting from equity.

635

and that gives, that does give more room.

636

and it's also a way you can.

637

Add leverage in a way that, is a

little bit easier or more palatable

638

from a tracking our perspective,

639

Rodrigo Gordillo: Yeah, yeah,

640

Ben Reeves: because you

can make an argument there.

641

You probably see in the papers,

like if you leveraged your basic

642

portfolio, 20 percent of your

retirement outcomes get better.

643

It's just that it's a

644

Rodrigo Gordillo: Well, it's

645

Ben Reeves: on another way to get there.

646

Rodrigo Gordillo: Cliff Ass paper,

I don't know how long ago, 15 years

647

ago, maybe 10 15 years ago, where he

says why not lever up to 60 40 and

648

then compares it against the S& P.

649

It shows clear, well, up until 2022.

650

You know, it's a, it's a better

portfolio because you're able to create

651

proper levels of more diversity while

maintaining the same level of risk

652

and actually increasing your return.

653

So it's just from that

perspective, you know, we talk

654

about risk parity all the time.

655

A lot of people just start with, Hey,

it's a more diversified portfolio, right?

656

We started the conversation

saying that you add a little bit

657

of gold, add a little bit of.

658

And that's kind of risk paired

tilting towards risk parity.

659

But the next step for risk

parity is removing those

660

leverage constraints, right?

661

And assuming you, you find an optimal

weights, optimal portfolio, then

662

the next best thing you could do,

because oftentimes what happens, you

663

get a better Sharpe ratio, but your

absolute return may go way down.

664

And so increasing that exposure and

unlocking that diversification, seems

665

like something that makes infinite sense.

666

how are you, how are you

dealing with that reality?

667

I, I've spoken to, to Nima, in your firm.

668

I've spoken to you.

669

I know you don't think about it, but

how do you deal with that within the

670

constraints of retail, within the

regulatory constraints of a robo?

671

I'd be curious to know where

your, where your mind's at there.

672

Ben Reeves: So in portfolio

construction, we use long bonds.

673

We use gold.

674

Those are just risky things.

675

Long bonds are not a super sharp

ratio efficient way to get exposure.

676

But if all your risk is in

stocks, it helps, right?

677

As you know.

678

And then I think what we want to do

with the portfolio is, is now that

679

we do have the ability to allocate

to alternatives, that, that is a way

680

that we can start looking at adding

leverage, for clients who understand

681

it and you understand you're going

to get different pattern of returns.

682

and then, you know, that opens

up a lot of different strategies.

683

for most of our clients, we can't talk

to or go through additional suitability,

684

we're constrained from adding leverage.

685

Which I think makes sense if you're

a regulator and you're thinking about

686

that people are now allocated to

three times levered NASDAQ, right?

687

You know, which is what you

688

Rodrigo Gordillo: Yeah,

that's where their minds at.

689

Ben Reeves: They just like don't quite

get the leverage can be a diversifying

690

tool or a risk reducing tool.

691

or, you know, we, you know,

all the arguments, right?

692

Like same, same risk of

stocks, higher expected return.

693

I think then they're generally

open to those kinds of discussions.

694

It's just a process to get them

through to, so they sort of understand

695

the impact on client portfolios.

696

They're coming from a good place.

697

It's just, you know, very traditional way

of thinking about investment management.

698

Yeah.

699

Rodrigo Gordillo: Well, I mean the

traditional way and thinking about

700

investment management chapter one of

every finance book is the efficient

701

frontier in the capital market line.

702

So it just blows my mind that regulators

have a tough time going back to tradition.

703

I think we want them to

go back to tradition.

704

difference being that we now have

technologies that allow us to

705

provide that leverage to retail

in a relatively simple way.

706

I mean, look, the, the rule changes both

in the US and in Canada recently should

707

open up a lot of opportunities for this.

708

so, you know, hopefully we can get closer

and closer to that optimal portfolio.

709

Ben Reeves: think in leverage management,

like allocating alternatives is much

710

easier than allocating alternatives,

but also sort of the deep end for,

711

you know, if you're an individual

investor trying to roll futures, you

712

might run into problems or size, you

know, size of positions appropriately.

713

so yeah, so products like yours

are a great way you can get

714

that in a, in a controlled way.

715

Rodrigo Gordillo: So we were

having, Adam, Corey, myself and a

716

bunch of other people on Twitter.

717

We're actually having an interesting

discussion about what, what, what

718

optimal allocations, What the optimal

location should be for a portfolio.

719

And what I came out of the people that

think in very simple, similar ways,

720

coming out with very different belief

systems about weighting asset allocation.

721

And by the way, this is me, this is,

and, and when it comes to, you got your,

722

you got what you're, you're kind of

pushing the envelope here on the robo.

723

Ben Reeves: Yeah.

724

Rodrigo Gordillo: As you mentioned,

this is highly personalized.

725

So everybody, you know, you're

trying to get the best for

726

the most for your portfolio.

727

If you had your rudders and you can do

whatever you wanted to do and assume that

728

it's going to be a widely successful and

people are going to adopt the allocation.

729

Are you closer to where you are

right now at Weathsimple, or

730

are you closer to risk paired?

731

Like how do you, how do you think is

an optimal portfolio for your family?

732

Ben Reeves: So, my family is

close, much closer to risk parity.

733

I think where I would, might differ

from, from a standard risk parity is

734

I think that, your sharpe ratio for

growth, the assets might be higher than

735

your sharpe ratio for defensive assets.

736

and if you have a long enough time

horizon, you might think about that.

737

cause you know, with risk parity,

there is that there's a, you know,

738

your first move is the most efficient,

most important one that your next one's

739

most, and then there's this like big.

740

range of, of allocations in the middle

where you're, you're pretty efficient.

741

You're, you know, about a 0.

742

6 or so sharp ratio.

743

and I would probably tilt more towards

growth, the assets, then, then sort

744

of your, your textbook risk parity.

745

Where did you end up?

746

Rodrigo Gordillo: Well, well, I'm

still, I think this is an evolving

747

thing because I, I was very, you

know, strong convictions loosely held.

748

I had some strong convictions

in, in that exchange.

749

but I'm, I'm rethinking a lot of it,

you know, cause you gotta, it's about,

750

then it becomes about beliefs, right?

751

Risk parity believes that the Sharpe ratio

for all assets are That, that equities,

752

bonds and commodities, broadly speaking,

and tips are all going to return the same.

753

So you put them together,

smooth out the returns.

754

You're going to get the same outcome.

755

And then it's about, well, what

do I have more confidence in?

756

Do I have more confidence in the

equity risk premium term premium,

757

the, the, commodity role, you know, is

gold going to be there in a real way?

758

And I think at this point, what

I've come to understand is there's

759

a lot about beliefs, You know,

you could add Bitcoin there.

760

Talk about belief systems

that are almost religious.

761

You know, those who love gold will

say absolutely gold is crushed it.

762

And, you know, but is there an empirical

basis for gold continuing to have that

763

level of return above, the risk free

rate as we've seen in the last 30 years?

764

I don't know.

765

so I'm still kind of debating, which I

certainly love the, In, in lieu of, I

766

certainly believe in equity in, in bonds

and in maybe in lieu or in, in, addition

767

to gold and commodities, I really of

course love trend following and carry.

768

those are two things that I'd strongly

believe in that could act as a good

769

offset for inflation regimes, instead

of just going simple, tips and whatnot.

770

The weightings of those, you know,

again, I think it's risk parity first.

771

Preparation for prediction and

then starting to tilt based

772

on on your own belief systems.

773

That's where i'm at right now

774

Ben Reeves: I think that

that's, that's probably a good,

775

that's a good starting point.

776

the other thing that, I, I personally

put alpha in my own portfolio

777

and I think it's, it's useful.

778

You have to make sure you know what

you're doing and you have access, right?

779

So that's obviously, you know,

that you're trying to build that.

780

and I think the other thing I do is

I, I look for just diversifying income

781

that I think is pretty uncorrelated,

like life settlements are interesting.

782

Certain asset backed lending

is interesting where Like I was

783

talking about before, you're, you're

helping your discount rate exposure.

784

so other things that the risk

parity framework didn't really

785

think about that, I think.

786

So, so where are these other assets

that are out there and available now?

787

Where do they fit in?

788

Rodrigo Gordillo: How about you Adam?.

789

that exchange is fairly interesting has

because I know you're I feel like you're

790

more like screw equities and bonds.

791

Let's go straight up to carry.

792

What are your thoughts there?

793

Adam Butler: Yeah, I mean, I've got,

my allocation is basically exclusively

794

to privates, not privates, alts.

795

So, You know, carry trends,

seasonality, relative value.

796

I've got definitely a larger allocation

than most to, physical gold bullion.

797

and I mean, it's weird as asset

managers too, because we already

798

have a large beta to our own

strategies and to cyclical forces.

799

So, you know, I probably hold a

larger slug than most in cash.

800

But I would definitely lean more

heavily toward dynamic global

801

adaptive strategies than to static

allocations to risky assets.

802

no, especially now, you know, take my

views on equities with the largest,

803

with a full hand full of salt.

804

But, I mean, we're at the largest

allocation to equities as a

805

percent of total household wealth.

806

Now, and you know, if I look across the

landscape of, well, admittedly fairly poor

807

predictors over intermediate timeframes

for, for forward equity returns, but the

808

best one that I've seen as a function of

the percentage of total household wealth

809

wealth, that's inequities versus bonds,

where we're at the peak now, which is

810

pretty substantial evidence that Returns

to equities over the sort of next 10 to

811

15 years are likely to be below average.

812

And we've had a nice pickup in rates.

813

So, you know, from an equity bond

standpoint, I'd be a little bit

814

more inclined to be more bond

heavy than equity heavy here.

815

But yeah, I mean, I just don't really,

at this point, I haven't seen a

816

cheap equity market in 15 years and

we may not see one in my lifetime.

817

And, you know, I don't really

care about tracking errors.

818

So

819

Rodrigo Gordillo: So

820

Adam Butler: It's more accurate

821

Rodrigo Gordillo: So that's the one

of the things that came up in those,

822

in that dialogue was, you know, I was

saying how commodities in gold at worst

823

can be a, a, it returns as much as cash.

824

So zero real return ratio zero at worst.

825

And if you're making room in your

portfolio and your equity bond

826

portfolio in order to To fit them

in, it may be a problem, but if

827

you're stacking them on top, right?

828

If you're able to leave it, it's

a, it's a, it's a zero cost hedge.

829

It was the argument that I made and

somebody came back and said, well, it

830

really isn't because you're actually

adding volatility and invariance,

831

and that variance is going to

affect your, your compound rate of

832

return to which I replied back that.

833

There is a rebalancing premium

that you also extract from having

834

diversified assets in there.

835

So I don't know, this is, this is a

point that also Chris Schindler has made.

836

Have you put any thought

into, into that, Ben?

837

Ben Reeves: Rebalancing premium.

838

Yeah, I mean, I,

839

Rodrigo Gordillo: No, more on like, you

know, commodities and gold being both,

840

I'll get an answer to both, but the,

the idea that gold and commodities may

841

be a zero cost, hedge for inflation.

842

Ben Reeves: yeah, I buy that commodities

and gold are a, it's not zero cost,

843

but low cost hedge towards inflation.

844

If you're doing it in a, in a

leverage way, like gold is, I think

845

clearly has a lot of uses and times

where you really want it, right?

846

And then that kind of plays into

the rebalancing premium, right?

847

Where, if you get big monetary

inflation, if you get a crisis,

848

these are times when gold, Okay.

849

I mean, gold's really useful.

850

I also think it's a little

underappreciated just in terms

851

of the geopolitical risk that

we're running into now, right.

852

Where it, it's not in our models, right?

853

But, you know, gold can be a

really helpful thing in conflicts.

854

It, it can, it's outside of a lot

of institutional, arrangements.

855

So I, you know, I think it has

that, it has that value there.

856

and then likewise with, with

commodities, I think you can put

857

it into a model, but also if you.

858

Like if you do see potential conflicts

out there, and you do see a fight for

859

resources coming, that's something

that hasn't really happened in a,

860

I don't know, you know, 70 years.

861

but that's certainly possible, right?

862

And, and, and as you get more, a more

conflicted world, de globalizing world,

863

it's also helpful for that scenario.

864

Rodrigo Gordillo: You have

any thoughts on that, Adam?

865

Adam Butler: I mean, I think

that gold has a positive premium.

866

I think commodities, if run properly,

can have a positive premium.

867

Rebalancing or diversification premium.

868

I think gold is a great standalone.

869

I'm a little bit less sold on commodities.

870

I think you, you probably want to

have a little bit of an allocation

871

to, rebalance diversified commodities,

and then also, allocate via trend

872

and carry, and maybe seasonality.

873

But, you know, all these around the

edges, the hard thing is that kind of 80

874

percent of the time, both historically

and probably if I look forward, you've

875

got equities and bonds are both going

to deliver kind of around their average.

876

And then you've got this sort

of 20 percent situation where

877

through some conspiracy of

geopolitical risk or conflict.

878

Or fiscal, fiscal profligacy, we could

have major tail outcomes where equities

879

and bonds both suffer profoundly together

and gold and commodities and other

880

types of all it's really skyrocket.

881

So it's hard to model

that out in an optimizer.

882

It's hard to put a pin in what

those distributions look like and

883

what those probabilities look like.

884

But I probably skew a little bit more on

the concern side than your average person.

885

So, you know for that reason I skew

a little bit more towards those more,

886

diversified or resilient asset classes

887

Rodrigo Gordillo: Well, it's

interesting to see when you look

888

at how often commodities do deliver

for you during inflation regimes.

889

It's, it's a, it's a factor of

how, how often in hyperinflation

890

or high inflation shocks happen.

891

So historically, I think AHL did one

892

they showed that commodities performed

20 percent of the time, right?

893

When there was a big inflation push.

894

and the rest of the time

you're just sitting there.

895

Just dragging the portfolio.

896

obviously over a full

cycle, you're good to go.

897

It actually added value,

it added diversity.

898

And then they did the compar, the

comparison with trend where it seemed to

899

provide the same level of, protection.

900

But in this case, you're also providing

a positive risk premium during

901

the other 80 percent of the years.

902

Right?

903

So obviously I tilt towards trend

as a, as an inflation hedger,

904

you can stick to long term.

905

but I like the idea of also

having commodities and gold

906

as the first responder.

907

Right.

908

Cause oftentimes you might be

offside and if there's a massive,

909

it's something like we saw in 2020,

like the, the energy complex did a

910

lot better than any trend strategy.

911

Right.

912

So having a little bit of first

responders there just to kind of get

913

you through and not enough where you're

going to lose faith in a 15 year period

914

where commodities are flatlining.

915

That, that to me makes a lot of sense.

916

So I'm, you know, I'm writing all

this down in my, I'm dead now,

917

what book that my wife gave me.

918

So, know, and this is me, this is me

trying to use you guys as a soundboard

919

to make sure that my, my logic is tight.

920

Ben Reeves: I think as a, as an

investment manager, you have the equity

921

market exposure you're talking about.

922

And that, that also, that depends on

certain political arrangements still.

923

And, and, you know, I think inflation is

a lot of times a political phenomenon.

924

so it's, there's not a signal in

there for, you know, there's not a

925

quantitative signal on that for you,

but it's, I think something to consider.

926

Adam Butler: Definitely

927

Rodrigo Gordillo: Well, I mean,

I think we've covered that.

928

I, you know, hopefully, the masses move

more and more towards that optimal more

929

towards that risk parity portfolio and,

WealthSimple finds that signal and starts

930

giving them more of what they need.

931

or though I am, doubtful

that that'll ever happen.

932

Ben Reeves: Honestly, my mantra.

933

Rodrigo Gordillo: game

pops out there, you know.

934

Ben Reeves: Yeah.

935

No, just put your money at

risk in a reasonable way.

936

There's a risk premium for

owning financial assets.

937

Like if you can start there and get

people to do that, I'm pretty happy

938

that if you can make your Sharpe ratio

better or get your range of outcomes

939

better, all the better for you.

940

Rodrigo Gordillo: Okay.

941

So, so Ben, before we leave, is there

any way that people can find you?

942

Find your musings?

943

You say you have a monthly one.

944

That'd be interesting for, for

everybody here to look into.

945

where can we find you?

946

Ben Reeves: just through Wealthsimple,

you have to go register for Wealthsimple.

947

com and you get the newsletter.

948

I have a Twitter account, but zero tweets.

949

So I'm a sort of hard to follow on there.

950

Rodrigo Gordillo: Oh, okay.

951

You're, you're extracting

all the knowledge

952

Ben Reeves: I watch you

953

Rodrigo Gordillo: keeping quiet.

954

Ben Reeves: Bye.

955

I

956

Rodrigo Gordillo: Amazing.

957

Okay.

958

Any, any other parting words,

Ben, before we head out?

959

Ben Reeves: do have LinkedIn.

960

I post things there from time to time.

961

So that's another way.

962

Rodrigo Gordillo: Okay.

963

I think that's good.

964

Ben Reeves: Thanks so much guys.

965

It's been, it's been a blast talking.

966

Yeah.

967

Adam Butler: about, I mean, I

think there's just a lot of common,

968

beliefs and knowledge and, you

know, ways of viewing the world.

969

So it's, it's always interesting to

see how people in different roles with

970

similar belief systems, but different

sets of constraints, express those

971

belief systems in the most optimal

way they know how, so that's great.

972

Rodrigo Gordillo: And nobody's

more shocked than me about talking.

973

When I started thinking about talking

to robo advisor heads that I expected

974

a completely different investment

framework than where you and Nima and

975

your team actually come from, right?

976

So it is incredibly refreshing to

learn that, you know, thoughtful

977

people are at the helm for the

largest robo advisor in Canada.

978

That's, that's an amazing thing, actually.

979

Again, Canada CPP teachers and

WealthSimple leading the way.

980

Well

981

Ben Reeves: All underperforming the

index, but we're leading the way.

982

Yeah.

983

Yeah.

984

Rodrigo Gordillo: Well, you know.

985

Relative, not relative.

986

Adam Butler: That should be a

badge of honor right now and

987

before the index, honestly,

988

Rodrigo Gordillo: As Meb Faber said.

989

Adam Butler: say you're both

a prudent investor and you're

990

outperforming the index at this point.

991

Rodrigo Gordillo: Meb Faber said it's a,

it's a bear market in diversification.

992

That, that should, that should be

993

Ben Reeves: that was great.

994

Rodrigo Gordillo: awesome.

995

Okay, gentlemen.

996

Well, thank you so much.

997

Both of you.

998

Adam Butler: Thank you.

999

Rodrigo Gordillo: Thanks, Ben.

00:51:07,645 --> 00:51:11,785

And, we will, we'll try to get you back

on here next year to see how the things

00:51:11,785 --> 00:51:13,125

on the, on the private side have gone.

00:51:13,680 --> 00:51:14,180

Ben Reeves: That'd be great.

00:51:14,290 --> 00:51:14,810

Thanks guys.