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Published Feb 24, 2022

Rapid Response: Invest in first principles, w/Sarah Levy, Betterment CEO

Sarah Levy, CEO of Betterment, delves into the company's strategic moves in cryptocurrency, leadership transitions, personalized financial strategies, holistic financial wellness packages, and socially responsible investing, offering insights on navigating and innovating in the evolving financial landscape.
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  • Acquisition

    Betterment's acquisition of Makara marks a significant step in embracing cryptocurrency. emphasizes that Betterment believes in the longevity of cryptocurrency as an asset class and aims to incorporate it responsibly into traditional investment strategies 1. This move aligns with Betterment's philosophy of long-term diversification, viewing Makara as a platform that mirrors their approach to traditional investing.

    Once we believe that an asset class is here to stay, the question is: how do we responsibly recommend that and incorporate that alongside a traditional investment strategy?

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    By acquiring Makara, Betterment aims to offer a diversified and long-term approach to cryptocurrency investing 1.

       

    Strategies

    Levy outlines Betterment's strategy for cryptocurrency investing, which parallels their traditional investment principles. She notes the challenge for average investors to navigate the vast and complex cryptocurrency market, which includes over 17,000 digital assets 2. Betterment's approach focuses on creating a diversified portfolio and holding it long-term, rather than betting on individual cryptocurrencies.

    Think of it as a long-term hold and play the overall market, don't play the individual stories.

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    This strategy aims to mitigate risks and provide a more stable investment option for their clients 2.

       

    Volatility

    Navigating the volatility of the cryptocurrency market is a key concern for Betterment. Levy explains that their investing philosophy is designed to withstand market fluctuations, emphasizing the importance of a long-term perspective 3. She reflects on her experience joining Betterment during the pandemic and how the company's mission and culture helped them navigate uncertain times.

    In times of volatility, that's when our investing philosophy withstands the test of time.

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    This approach aims to provide stability and confidence to investors, even in unpredictable market conditions 4.

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