FAQ's (Frequently Asked Questions)

  1. Q. Why should I invest every month?

    A. Investing continuously is the best way to beat market volatility. Investing a lump sum might work out great, and it might work out badly – depending on your timing. Continuous investing smooths out the natural volatility of the markets, and it has been shown time and again to beat other type of investment on any time scales.

  2. Q. What is the best way to invest?

    A. Diversification. Invest in as many different products, invested in different stocks and different markets in different currencies as possible. Alternatively, let us select the optimal portfolio for you.

  3. Q. Should I always be saving?

    A. The answer is probably yes. The reasons to not be saving are:

           • You are retired/decumulating rather than saving.

           • Your income is so low that you can’t save, i.e. you have no income left after taking care of life’s necessities.

           • You have so much wealth already you don’t need to save more.

           • Consumption is guaranteed to make you happier now than it will later.

    If one of these isn’t true for you, then the odds are you should be saving. You might not have any particular savings goals in mind, but we’ll help you with that too.

  4. Q. How much cash is too much?

    A. While a small portion of cash may seem insignificant, it can still significantly drag down your returns due to compounding. However, we recognize that practical issues in accounts that don't have free trading and fractional shares like Investcity may cause you to have a bit of cash. Generally, if your cost to re-invest cash into securities outweighs the value of the trade by some threshold, you should hold the cash until you have more to invest.

  5. Q. Paying off debt vs investing

    A. Choosing whether to invest or pay down debt is a common question. As much as we would love everybody to become a Investcity customer, there are certain situations where you should pay off debt before you open an account with Investcity.

    First, you should make at least the minimum payment on all debts before investing. Not doing so can lead to penalties and added interest, in addition to ruining your credit score. For some debt like mortgages, this would be the full payment. For other debt like credit cards, the minimum payment is listed on your statement.

    Second, you should typically make sure that you have enough cash to pay off the monthly balance on your credit cards before investing. The average interest rate on credit cards is 15%. Paying these debts down is equivalent to a guaranteed 15% rate of return on your personal balance sheet.

    In general, any debt with an interest rate of 5% or above is considered high and you should typically pay off that debt before investing. Once high interest debt is eliminated, it makes sense for most people to consider investing. Not all debt is bad or should be viewed as a barrier to investing. Debt can be a valuable tool to help you reach your goals faster (such as a mortgage on a house), but it should be used in moderation. A good rule of thumb is to keep your total debt payments below one-third of your gross income.

    If you proceed to open an account at Investcity, it will be our understanding that you have read the above and have determined that you are not investing at the expense of making minimum payments on your debt or paying off high interest debt.

  1. Q. Do I have to invest just in products in my own currency?

    A. No. You can invest in products in any currencies that you can find. If you want us to manage the currency exposure for you on any of the products, tick the “Hedge Currency” box next to the product in My Portfolio.

  2. Q. What happens to the dividends?

    A. The dividends will be automatically credited to your account, net of any withholding taxes. If you want to reinvest the dividends from any products, tick the “Reinvest Dividends” box next to the product in My Portfolio.

  1. Q. Why do you need my personal information?

    A. It is the law. We have to know all our clients. We ask for proof of identity, proof of address and proof of origin of funds.

  2. Q. How secure is my personal information and identity at InvestCity?

    A. Investcity has incorporated bank-level security measures in everything that we do. This includes the strongest available browser encryption, secure servers, and identity verification services, among other precautions. For more details, please review the Security & Privacy Promise section of our site..

  3. Q. Is Investcity a regulated financial institution?

    A. Investcity is a Registered Investment Advisor, and we are regulated in a number of different jurisdictions. For more information, visit our Regulation page. Investcity is simple and transparent. Your money is invested in well-established funds, chosen for their good management, efficiency, and long track record. You can see our portfolio by clicking here.

  4. Q. How is InvestCity regulated?

    A. InvestCity is authorised to provide investment management services throughout the European Union under MiFiD.

  5. Q. What about taxes?

    A. Based on the information you give us, we may have to withhold some taxes and pay them to relevant authorities on your behalf. Any taxes that are not withheld are your own responsibility. If you think we are withholding some of your taxes incorrectly, or wish to discuss any taxation issues, please contact our Customer Support.

  6. Q. How do I access my money?

    A. You can transfer money in and out of your account as frequently as you like. One out-bound transfer per month is free, after that charges apply.

  7. Q. Do I have to lock my money up for a period of time?

    A. No. Only the products designated as Closed-ended are locked for a period of time. We typically advise that you keep some of your money in instant-access products such as ETFs, and a portion in Closed-ended products. If we are managing your portfolio on your behalf, you can set your preferences to let us know what portion of your funds you would like to be instant-access and what portion you are happy to lock up, and for how long.

  1. Q. What is the advantage of ETFs?

    A. ETFs or Exchange Traded Funds are funds which can be bought and sold on an exchange. The universe of ETFs is vast, and there is an ETF for almost any market view that you can imagine. If there isn’t, talk to us and we may create one. The big advantage of ETFs is that they can be bought and sold instantly on an exchange, and that there is no counterparty risk – they are cleared through an exchange. InvestCity covers products on all major exchanges across the world. If there are any ETF products that you can not find, let our Customer Services know.

  2. Q. I can not find fund XYZ.

    A. Let our Customer Services know.

  3. Q. Can I limit my investments to ethical / renewable / carbon neutral / etc etc funds?

    A. Of course you can. Either pick your funds yourself, or let us know and we will pick them for you.

  1. Q. What is my account number?

    A. You can find your account number(s) by logging in and looking under “My Account”.

  2. Q. How do I close my account?

    A. If you need to close your account, the process is simple. Log in below, and select "Accounts" from the sub-header. Once to this page, you will click the three dots towards the right of the account you are looking to close. You then will be asked to answer one of your security questions.

    This will withdraw all your funds directly to your linked bank account and disable your account. There are no trading fees or penalties for closing accounts.

    Please contact us at support@investcity.com if your decision to cancel is based on any problems you may be experiencing. If you simply need access to your funds, note that there are no fees for accounts with a zero balance, so feel free to withdraw and keep your account open until you are ready to invest with us again.

    If you would like to try Investcity again in the future, simply email us at support@investcity.com to re-activate your account.

  3. Q. Can I add a minor as a beneficiary?

    A. We do not recommend you do so. Investcity only supports accounts for individuals the ages of 18 or older. If a minor should be appointed as a beneficiary of an account, Investcity may require court-appointed custodial documentation or an official guardian for the minor beneficiary prior to any funds being transferred. Setting a minor as a beneficiary may cause unforeseen delays.

    Note that Investcity can support trust accounts where a minor has been designated as the beneficiary. However, the trustee of the trust must be at least 18 years of age.

  4. Q. I live in XYZ, can I still have an account?

    A. Investcity is an international investment provider, and we can serve most customers in most jurisdictions.

    We are not currently licenced to sell our products to residents of the USA. There are also a number of countries for which we are required to conduct enhanced due diligence.

    If you have any questions about your eligibility, please contact us on support@investcity.com to discuss.

  5. Q. Do I have to change banks to use Investcity?

    A. No. But we do recommend that you finance your account with Direct Debit. If your bank can not set up a Direct Debit, contact us on support@investcity.com to discuss other arrangements..

  6. Q. How do I check the performance of my investments?

    A. There are multiple views available in My Portfolio. The views are fully configurable, so spend some time to make sure your views display the information you are interested in. If you need any help, contact our Customer Services.

  7. Q. Why wouldn’t I just buy Investcity’s recommended products directly?

    While you could buy the same products from a traditional broker or fund company, you couldn’t get them without a fee, so you’d be paying to buy, sell, or trade the products.

    Even after you purchased those securities, you would have to rebalance regularly — which few people do because of the work, scheduling, and transaction fees involved — to get the risk-reducing and returns-enhancing benefits of rebalancing (which Investcity handles for you, automatically). Investcity also seamlessly invests every penny according to your allocation; this means all your money is working for you. Investcity gives you advice about how to allocate your funds, and takes the guesswork out of asset allocation. We also offer you fractional shares, so again, every single penny of your money is working for you.

    And Investcity‘s investment committee regularly scours the market, looking for more cost-efficient index ETFs to give you consistent broad-market exposure.

    Finally, when Investcity makes a sale, we sell your losses first, then gains, to minimize your tax bill.

    These benefits mean there’s a lot of real value Investcity provides that you just can’t get buying ETFs, stocks and bonds on your own. We are providing a way for you to simply make a smart investment that you can set and forget, so you can spend more time doing whatever it is you like to do more than managing your money.

  8. Q. How is a Investcity account different than a traditional online brokerage account?

    A. Investcity offers unique features, including:

         • A straightforward pricing model without transaction charges or hidden fees.

         • No minimum balance.

         • Focus on the only portfolios that matter to most investors.

         • An incredibly easy user experience that makes it easy to understand your money and control your exposure to risk.

         • Automatic, seamless diversification (which means higher returns with lower risk).- Automatic rebalancing of your portfolio.

         • Automatic rebalancing of your portfolio.

         • Automatic reinvestment of your dividends.

         • Transaction in exact amounts (so you don't have to buy whole shares).

  9. Q. What am I getting for Investcity's fee?

    A. Investcity’s straightforward fee is a great value. Beyond being the simplest way to invest intelligently, Investcity offers a number of unique features under the hood that simplify your life as an investor and help you get better returns:

         - Fractional shares. When you transfer money to Investcity, every penny is invested into your portfolio as fractional shares, so all your money is always working for you.

         • Better diversification. Any single fund has its shortcomings. By balancing your portfolio among multiple funds, InvestCity gives you appropriate exposure to small cap and value stocks while still maintaining a balance of large cap and growth stocks. Purchasing these ETFs directly and maintaining the proper balance over time would be a very demanding task.

         • Rebalancing. The composition of your portfolio will naturally drift over time as the market fluctuates, but Investcity rebalances you back to your desired allocation using cash flows, or whenever your portfolio composition drifts by 3%. Because we use your existing cash flows, we rarely have to make a sale to rebalance. Experts agree that regularly rebalancing your portfolio can increase returns and reduce risks, but even the most disciplined investors don’t do it because of all the work involved.

         • Tax Efficiency. When we do make a sale, we sell your losses (short term, then long term) first, then your gains (long term, then short term) to minimize your tax bill.

         • Better access to your own money. Your money is always available without a transaction fee, and without a minimum balance requirement. If you have an unexpected event and need your money, it can be back in your checking account in 4 to 5 business days.

         • Integrated and actionable advice. Our advice tools give you actionable guidance, which we help you execute immediately.

  10. Q. How is an Investcity account different than a bank savings account?

    A. While your Investcity account is as easy to use as an online savings account with a bank, there are several differences. Although most bank accounts are guaranteed not to lose value, there is a possibility that your investment at Investcity could lose value depending on market conditions. At the same time, a Investcity account is better than a bank savings account because you could receive higher returns than a savings account. The amount of risk you want to take is up to you, and is controlled by setting your allocation between our portfolios.

  11. Q. What happens to my money if Investcity goes public, is acquired, or closes?

    A. If Investcity goes public or is acquired, you would maintain complete control of your brokerage account. All the underlying securities in your Investcity portfolio are owned by you - you would be free to add or withdraw money at any time.

    In the unlikely event that Investcity was to close, your money would remain safe, and you would simply choose a new home for it. Investcity's corporate money is completely separate from your client money at all times, and Investcity is not allowed to use your money to pay for its operations or anything other than investing for you. You own all the underlying securities in your Investcity portfolio, and if you close your account your money will be transferred back to your linked checking account. If we were to close, the funds would be transferred to the broker of your choosing.

  12. Q. Does Investcity do a credit check?

    A. No. Since Investcity does not lend money, the only check we do is an ID verification check as required by law. We do not pull your credit score, or do anything that would impact your credit rating or score. If you happen to have any additional questions, please contact us at support@investcity.com for additional support.

  13. Q. Does Investcity support accounts for minors?

    A. At this time, we do not offer custodial accounts for minors. It's something we hope to do one day, but for now all customers must be 18 in order to consent to all our agreements.

    You can, however, create separate savings goals for your children and then deposit and withdrawal on their behalf. This works great if you’re using Investcity as a tool to show them the benefits of saving. You can even select just their goal in the Performance section of your account to show them performance data.

    Additionally, if you have a trust for the benefit of your children, of which you are the trustee, you can create an Investcity Trust account.

  1. Q. What is a goal (portfolio)?

    A. Your Investcity account can be divided into different buckets - or goals - that can be designated for different purposes and have different investment strategies.

    While just about everyone should be saving for retirement, you might also be saving to build an adequate safety net or a home down payment, for example. Goals allow you to save and invest for multiple things at the same time while customizing the investment needs for each one.

    Each goal has an account type and an advice type. The account type is the kind of legal investing account used for the goal. Retirement goals can be in Individual, Joint, or Trust (taxable) accounts, or in an ISA. Non-retirement goals can be in Individual, Joint, or Trust accounts.

    The advice type is what determines the investment plan associated with the goal. We will recommend an asset allocation and how much you need to contribute in order to increase your chances of achieving your goal. Over time, we will continue to provide updated advice designed to balance risk and reward. If you fall off track, we will advise you on the best way to get back on track to reach your goal.

    For example, you might have a goal with retirement advice and a traditional ISA account type for your retirement savings, and another goal with safety net advice and an Individual account type in order to build a safety net for emergencies or unforeseen expenses.

    Visualizing your biggest goals in life – like buying a home or saving for a child’s college – helps to make the end result more real. This kind of mental accounting keeps you from spending money intended for other things. For example, while it might feel OK to take a few dollars here and there from a general account called “Savings,” it is typically much harder to dip into “Max’s University Fund.”

  2. Q. Can I have a goal without a target?

    A. While saving toward specific goals has its benefits, the most important thing is make sure you are investing at all. This is why we provide a “General Investing” advice type that doesn't have a defined target date or amount. However, you still need to make a decision on how best to allocate between stocks and bonds. By default, we select an allocation appropriate for your age, with a maximum of 90% stocks and a minimum of 55% stocks.

    You can always adjust the specific allocation yourself.

    By the way, if you later decide to set a specific goal, you can always change your goal advice type, set a target, or create a separate goal and transfer money from your General Investing goal into the new goal.

  3. Q. What goals (sub-accounts) should I set up and which allocations are best?

    A. Your Investcity investment can be easily divided into different segments or sub-accounts called “goals”. Goals can be designated for different purposes, each with its own portfolio, target balance, time horizon, and deposit/withdrawal schedule. Goals allow you to save and invest for multiple things at the same time while customizing the investment needs for each one.

    To create a new goal, simply click the "Add Portfolio" button on the summary page of your account and follow the instructions.

    Some popular goals are:

         • Safety Net: Grow your savings to cover 3 to 6 months of unplanned expenses in a conservatively-invested portfolio. Safety net goals have a fixed stock recommendation at 40%, to balance the need to retain value in drawdowns with the desire for inflation-beating growth.

         • Retirement: Invest long-term for the savings you plan to spend in retirement. This can be a regular investment account called “Retirement” or a tax-advantaged account such as a Roth IRA or traditional IRA. We will recommend a more conservative allocation as you get closer to your goal.

         • General Investing: Grow and preserve capital over time in a “Build Wealth” goal. This is an excellent goal type for unknown future needs or money you plan to pass on to future generations. The recommended allocation for this type of goal is based on your age.

         • Major Savings: Save for big purchase goals, (e.g., a down payment for a home, tuition or other big goal). This goal has a specific target date and target amount, and we give advice that follows a tailored glide path to a nearly zero-risk portfolio right when you want the money.

    Depending on the goal you choose, we factor in the amount of your initial deposit (and frequency of scheduled auto-deposits) and your age or time horizon to arrive at specific suggestions that will keep you on track to meet your goal. The allocation recommendation for each goal is designed to take on the optimum amount of risk to optimize for expected returns.

    As you get closer to your goal, we continue to provide updated advice to balance risk and reward. If you fall off-track, we will advise you on the best way to get back on track to reach your goal on the advice page of your account.

    Your Investcity pricing plan is always based on the sum of your account balance across goals.

  4. Q. What happens when I deposit money with Investcity?

    A. When you deposit money with Investcity, your money is transferred to our broker-dealer, with instructions to buy ETFs, stocks and bonds based on your desired asset allocation. You own the securities that Investcity recommends for these two baskets and Investcity manages buying and selling them for you.

    All Investcity customers are invested into a highly diversified portfolio (with global exposure and over 5,000 companies) with relatively stable securities, invested according to your chosen allocation (depending on how much risk you want to take) which you can see here.

  5. Q. How do I edit or delete a goal?

    A. To delete or edit your goals, click on the ellipses on the top right side of any goal on the “Summary” page.

    If you need to change other aspects of your goal, such as your goal target amount, you can go to the Advice page. There are no additional fees for multiple goals, and you are welcome to have up to ten general taxable investment goals. This is in addition to a Traditional IRA and a Roth IRA that you may have within your Investcity account.

    Please note that if you are unable to delete a goal, it may be because it's the only goal you have. In this case, you can create a new goal and proceed to delete the goal you wish to no longer keep.

  1. Q. Comparing our analysis charts to Google or Yahoo finance graphs

    A. Many customers use the great tools provided for free by Google Finance and Yahoo Finance to track their investments and may have noticed that some charts do not always match up to our benchmark data. In the Investcity Account tab, we provide several tickers for comparison to your portfolio, like SPY (SP&P 500 ETF) and BND (Vanguards Total Bond ETF). We use the adjusted return data when graphing this data, which means it has been adjusted for stock splits and dividends. This most closely matches what Investcity does in our portfolio (re-invests dividends) so it's the best way to compare.

    If you look at the returns graphs for these tickers on Yahoo or Google finance, you should be aware that they use straight price returns which do not include the dividend adjustments (so they typically will be lower). If you download their historical data and manually graph the adjusted price returns, you will see they match Investcity's Analysis graphs.

    ​​ Hopefully this helps with any questions, but always feel free to contact us for more info or if you're still not seeing the data match up.

  2. Q. Does Investcity have mobile apps?

    A. Not yet, but our website is optimised for mobile devices and it works better than most apps. Try it out.

  1. Q. What is the Investcity portfolio allocation?

    A. When you deposit money with Investcity, every penny is seamlessly invested in up to 12 different asset classes, optimized for your selected asset allocation.

  2. Q. What stocks, bonds and ETFs are used in the Investcity Portfolio?

    A. Our portfolio includes products that efficiently capture the broad global stock and bond markets, and international developed and emerging markets. Your money is invested in literally thousands of companies instantly. Exactly how much of your portfolio is made up of which stocks depends on the exact allocation you choose.

  3. Q. Will my Investcity portfolio beat the market?

    A. ​ Investcity's portfolio is designed to keep up with the market and not under-perform, but it is not designed to beat the market. Beating the market is difficult to do with any certainty and involves a lot of risk.

    Investcity is a strong believer in passive investing. The majority of the evidence shows that active management, whether by individual investors or fund managers, cause more harm than good in net-of-fee returns. We therefore invest in low-cost, passive investments which always seek to match the markets performance. You will never out-perform or beat the market on a risk-adjusted basis in your Investcity portfolio, but you'll also never under-perform or pay for a manager who under-performs either.

    You can therefore expect market-matching risk-adjusted returns in our portfolios.

  4. Q. Where can I see the portfolio that my money is invested into?

    A. Log in and navigate to “My Portfolio”.

  5. Q. How and when is my portfolio rebalanced?

    A. Why rebalancing is necessary

    Over time, the value of individual stocks in a diversified portfolio move up and down, drifting away from their target weights. For example, over the long term, stocks generally rise faster than bonds, so the stock portion of your portfolio will go up relative to the bond portion - if you don’t rebalance. The difference between the target weights for your portfolio and the actual weights in your current portfolio is called drift.

    Measuring Portfolio Drift

         • We define portfolio drift as the total absolute deviation of each asset class from its target, divided by two.

    Cash flow rebalancing

         • This method involves either buying or selling, but not both, and is preferable when cash flows into or out of the portfolio are happening anyway. Every cash flow (deposit, dividend reinvestment or withdrawal) is used to rebalance your portfolio. Fractional shares allow us to allocate these cash flows with precision to the penny.

         • Inflows: You are rebalanced whenever you make a deposit, including when you auto-deposit or receive dividends in your account. We use the inflow to buy the asset classes you are currently under-weight, reducing your drift. The result is that the need to sell in order to rebalance is reduced (and with sufficient inflows, eliminated completely). No sales means no capital gains, which means no taxes will be owed.

         • This method is so desirable that we’ve built it directly into your Portfolio tab. We calculate the deposit required to reduce your drift to zero, and make it easy for you to make the deposit.

         • Outflows: Outflows are likewise used to rebalance, by first selling asset classes which are overweight. (Once that is achieved, we sell all asset classes equally to keep you in balance.)

    Sell/Buy Rebalancing

         • In the absence of cash flows, we rebalance by selling and buying, reshuffling assets that are already in the portfolio. When cash flows are not sufficient to keep your portfolio’s drift within a certain tolerance, we sell just enough of the overweight asset classes, and use the proceeds to buy into the underweight asset classes to reduce the drift to zero.

         • Sell/Buy rebalancing is triggered whenever the portfolio drift reaches 3%. Our algorithms check your drift approximately once per day, and rebalance if necessary.

    Note: In addition to the higher threshold, we built in another restriction into the rebalancing algorithm for taxable accounts.

    As a result, it’s possible for your portfolio to stay above the 3% drift if we have no long-term lots to sell. Almost always, it’s because the account is less than a year old. In this case, we recommend rebalancing via a deposit to avoid taxes. The Portfolio Tab will let you know how much to deposit, as described above.

    Allocation Change Rebalancing

         • Rebalancing brings you back to your target allocation. Moving the slider in your goal does an allocation change, which changes that target. This sells securities and could possibly realize capital gains. Moreover, if you change your allocation even by 1%, you will be rebalanced entirely to match your new desired target allocation, regardless of tax consequences. As with all sell trades, we will utilize TaxMin to reduce the tax impact as much as possible.

         • If you’d like to change your allocation by making a deposit, please contact our customer support team - they will be happy to help you do this.

  6. Q. What returns can I expect?

    A. Your expected returns very much depend on your asset allocation. To see the expected returns for your portfolio, please log into your account and view the Allocation tab.

    You can see how a given blend would have performed historically by using our performance analysis tool.

  7. Q. What are ETFs?

    A. An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets just like an index fund, but trades like a stock on an exchange. ETFs track fairly closely to the indexes that they follow, such as the S&P 500 or the Dow Jones Industrial Average. ETFs are bought and sold like stocks throughout the day, and therefore experience continually changing prices. Investcity uses ETFs in both our stock and bond portfolios because of the liquidity, diversification, and low management fees they provide. For more information on the ETFs you are invested in with Investcity, please visit our portfolio page.

  8. Q. Can my investment lose value?

    A. Like all market investments, the securities you own in your account are subject to market risk. If the markets are up, your balance will grow. When markets are down, your account can lose money. Fluctuations are especially hard to predict over the short term, but historic data shows that over the long-term your investment is likely to increase.

  9. Q. What do I need to know about ETF versus mutual fund costs?

    A. When you are thinking about buying an ETF, the Expense Ratio is pretty much all you need to know. ETF managers make money by deducting the annual expenses from the dividends they pay out through the year, and they tell you in advance how much that will be. There are no costs to buy or sell ETFs, and no hidden expenses. If you trade through a broker, the broker will charge you a commission to execute the transaction for you. Investcity covers these transactions for you.

    Open-end mutual funds have purchase and redemption fees. These fees range from 0.25 percent to 2 percent and are charged by the fund to buy shares or to sell shares within a specified (usually short) period of time. Purchase and redemption fees differ from a commission because the money goes back into the fund rather than to a broker. These fees are meant to discourage short-term market-timing.

    Mutual funds also have internal trading fees which are not disclosed on top of the stated fee. They are estimated to range from 0.11% of assets to 2%, with an average of 1.44%. The Wall Street Journal has a good primer on this issue. Many passive index mutual funds’ undisclosed trading fees are likely quite low, but they are non-zero, so that's something to consider when doing a pure cost comparison.

  10. Q. What are the potential tax differences between ETFs and mutual funds?

    A. It’s easy to quickly get deep into the weeds here, but strictly speaking, even a “tax efficient” mutual fund (which could mean a number of things) is not necessarily as tax efficient as an ETF.

         • When you own a share of an ETF, you directly hold a single security directly for tax purposes, and you're in control of events that trigger tax consequences (primarily, selling it).

         • When you own a share of a fund, a number of circumstances you have no control over can trigger taxable events for you. The fund manager may choose to sell some underlying securities to rebalance or otherwise readjust the index, or investors other than yourself can withdraw, forcing the manager to sell in a way that can have tax consequences for you, even though you haven't sold anything.

  11. Q. Is Investcity a regulated financial institution?

    A. Investcity is a Registered Investment Advisor, and we are regulated in a number of different jurisdictions. For more information, visit our Regulation page. Investcity is simple and transparent. Your money is invested in well-established funds, chosen for their good management, efficiency, and long track record. You can see our portfolio by clicking here.

  12. Q. Why and how has Investcity selected this portfolio?

    A. Investcity constructs globally diversified strategic asset allocation portfolios appropriate for an investor's goals and time horizon. Each portfolio is selected as the result of a systematic portfolio optimization process that simultaneously balances forecasts for long-run expected returns for each asset class against both historical and forward-looking downside behaviour for the portfolio as a whole.

    Our advice is based on expected returns as well as downside risk and uncertainty as measured by historical episodes of underperformance and simulated stress tests of the asset performance. The result is a portfolio that provides an optimal blend of asset class exposures across different economic regions, investment styles and security types to deliver the best possible risk-adjusted returns for every level of risk.

    The long-term performance of a portfolio can be negatively impacted by interest rates and inflation. Our fully diversified global portfolio helps smooth out the impact of these factors since different areas of the world experience them at different times and with varying severity. Our portfolio also avoids a common behavioural error of investors called home-bias, or the tendency to own companies from the country you live in.

  13. Q. What is an expense ratio?

    A. Investcity is a Registered Investment Advisor, and we are regulated in a number of different jurisdictions. For more information, visit our Regulation page. Investcity is simple and transparent. Your money is invested in well-established funds, chosen for their good management, efficiency, and long track record. You can see our portfolio by clicking here.

  14. Q. Is Investcity a regulated financial institution?

    A. Expense ratios are fees that mutual funds, exchange-traded funds (ETFs), closed-end funds and money market funds charge their shareholders. This fee is called a ratio because it is quoted as a percentage of assets per year, e.g. 0.85%. The expense ratio includes the administration, operating, legal costs involved in managing the fund, and sometimes marketing costs (“12b-1 fees”) to distribute the fund.

    The expense ratio is important to consider when you invest in a fund. Even though you will never see a deduction of this fee from your account, you are still paying this fee. It is built into the price of the fund, so it accrues daily, and is proportional to your investment in the fund. Therefore, this expense directly impacts your return in the fund -- and ultimately your wealth.

    Some asset classes are inherently more expensive than others. For example, U.S. stock funds generally have a lower expense ratio than international stock funds, because the underlying assets are more expensive to obtain. So it’s important to compare the expense ratio of a fund with the cost of other funds by other providers in its asset class. Also note that the strategy of the fund will affect its expense ratio as well. Passively managed index funds will have lower expense ratios than actively managed funds, despite their typically better net-of-fee performance.

    Some mutual funds have different share classes, each with their own expense ratio and also minimum investment. For example, the Vanguard Total Stock Market Fund Investor Share Class (VTSMX) has an expense ratio of 0.17% (minimum investment $3,000), but the Admiral Share Class (VTSAX) has an expense ratio of 0.05% (minimum investment $10,000).

    Typically ETFs have lower expense ratios than mutual funds. This is one of the main reasons, along with better tax efficiency and no minimum balances, that Investcity utilizes exchange traded funds in its portfolio. For the Vanguard Total Stock Market Fund example above, the ETF equivalent (VTI) costs 0.05% like the Admiral shares but has no minimum at all.

  15. Q. Transitioning a portfolio to Investcity

    A. Transitioning assets from one taxable account to another should be done with care in order to avoid unnecessary taxes. Use the strategies below to transition a portfolio to Investcity. We recommend speaking with a tax advisor if you have questions about your specific tax implications.

    Get the information you need

         • Using your account statements or information directly from your brokerage’s website, determine the holding period (based on purchase date) and tax basis (usually, the purchase price) of your current portfolio holdings. This is often available as a “cost basis report” or “gain/loss report”.

    Sell losses

         • Holdings that are currently worth less than they were purchased for are in a loss, and selling these should not realize taxable gains. In fact, they may provide a tax benefit by offsetting other gains and up to $3,000 of ordinary income. Start by selling these first.

         •If you are selling the same shares as the ones in Investcity’s portfolio (or a fund that tracks the same index as one of our funds), wait 30 days after selling before depositing the cash to Investcity to avoid rebuying the same ETFs and potentially incurring a wash sale.

    Transfer shares to Investcity

         • If you have gains, you may be able to transfer them in-kind to your Investcity account, which avoids sale and any associated taxes. We support any share currently in the Investcity portfolio and potentially others. Please contact our customer service team if you’d like to do a transfer.

    Manage taxes on capital gains

         • For any securities held more than one year, you will likely qualify for preferential tax treatment when you sell them. You can sell these to offset any available losses taken or harvested in a year and pay no tax. After that, you can control the gains you realize each year by selling specific amounts. You’ll want to review your entire income tax picture and ensure you are not increasing your tax by moving into a new tax bracket solely due to the realized gains from the sale (as opposed to getting a raise at work). Also make sure that you have the money set aside to pay the taxes—there is no withholding on capital gains, like there is with ordinary wages.

    Hold short-term gains

         • If you can’t offset all short and long-term gains with other losses, hold on to securities with embedded gains purchased a year ago or less, since these are taxed at a higher rate. For the majority of taxpayers, gains on investments held for a year or less are taxed at the same marginal rate as your ordinary income, the highest rate. Gains on investments held for more than a year are taxed at a lower rate than the short-term capital gains rate.

    Moving the cash to Investcity

         • After executing the above strategies, you’ll have any uninvested cash and sale proceeds in your brokerage account. Transfer this to the bank account linked to your Investcity account, and log in to your Investcity account to make a deposit or set up auto-deposit.

  16. Q. How to invest your portfolio's idle cash

    A. Cash in your investment account could be lowering your returns (learn why). Note we aren't talking about checking, savings or emergency funds here. Cash in an investment account usually arises from dividends that aren't re-invested, rebalance stalemates where you never finish your work, or just from being scared if "now is a good time to buy".

    Investcity is designed to avoid all of these issues, so it's the best way to make sure you never have idle cash, and that all of your money is working towards your future goals.

    If you are still worried about if now is a good time to invest, you might consider doing it over time. Set a plan in place, then use technology to make sure you stick to it. Investcity can automate this for you with automatic deposits. While the math shows that not waiting to invest cash is better in the long term, we are OK with a strategy that makes you feel comfortable and gets you there eventually.

  17. Q. Why do you ask for my time horizon and goal target amount?

    A. Investcity's advice is customized for each goal individually. This advice includes how to set your allocation to stocks and bonds, and how much you should save to achieve your goal. In order to provide such specific advice, we require some details about your goals. For example, for retirement goals this includes the age you would like to retire, as well as how much you will need to retire on.

  18. Q. How much should I allocate to the stock market?

    A. Stocks are generally more risky than bonds, meaning they go up and down more frequently. However, over time, stocks tend to grow more than bonds. How much to allocate to stocks depends on how much you are personally able to stomach the ups-and-downs (your 'risk tolerance') and how long you plan to be investing for your particular goal.

    Our advice will guide you to the best allocation based on the time horizon (or retirement age) you have provided. Changing the time horizon will change the blue shaded regions on the slider. From there you can tweak it up or down based on your personal preferences (conservative, moderate or aggressive). We also realize that preferences change, so you are always able to change your allocation without fees, up to once a day. Our Tax Impact Preview tool will allow you see the estimated tax consequences that would result from an allocation change in real-time, before you confirm the change.

  19. Q. Is this allocation data real time?

    A. Your balance in each account and fund is updated daily. However, the underlying allocation data is only published by mutual funds on a quarterly basis, so your current portfolio allocation is only an approximation of the current actual allocation.

  20. Q. Is current portfolio allocation used to determine the fee level of a fund?

    A. Our fee assessment of a fund uses the overall fund type (E.g. US Total Market Stock Funds, International Bond Funds or Commodity Funds) and not the asset classes within the fund. While the overall fund type is related to the underlying allocation, the actual fund expense ratios are set per fund and not per asset class within the fund.

  21. Q. What is "idle cash"?

    A. “Idle cash” is the balance you have in cash or cash-equivalent securities including currencies and money market funds. It is “idle” because it’s not invested - and not working for you.

    Note that your portfolio may actually contain additional cash within the funds you hold because the fund manager may decide to hold cash or be required to in order to meet redemptions. While you’ll see this in our “current portfolio allocation”, we don’t include this “fund cash” here because you cannot invest it. Your only option is to sell the fund and buy a fund like an index fund that minimizes cash.

    Investcity believes that cash does not belong in a long-term investment portfolio due to its low return after you adjust for the fact that it’s purchasing power is eroded by inflation over time. Learn more about how cash affects your investments.

  22. Q. I didn’t realize I had cash in my portfolio, how did it get there?

    A. Cash can build up if cash dividend payouts from investments aren’t automatically reinvested. If your brokerage doesn’t offer fractional shares, you might also have additional cash that wasn’t enough to purchase full shares. Investcity offers fractional shares to put every penny in your investment account to work.

  23. Q. How can I invest cash in my external account into my Investcity account?

    A. To use Investcity which automatically buys the correct securities for your allocation and reinvests cash over time, first transfer the cash from your brokerage account to the bank account used by your Investcity account. Then, make a deposit on the Transfer tab.

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