Think you can get rich in Canadian prediction markets? 97% of traders lose money — here’s how to build your wealth instead

But just because they can, it doesn’t mean most Canadians should enter the game.

A recent paper put out by researchers from London Business School and Yale University found that while prediction markets offer “remarkably accurate forecasts” of real-world outcomes through pricing, their accuracy comes from a small minority of “persistently skilled traders” who are able to make correct predictions consistently across markets. According to the researchers, these traders use a combination of skills to trade against behavioural mistakes of the majority, whose losses “fund the minority’s profits.”

How small is that minority? It’s about 3% of accounts on Polymarket.

For nearly all the rest, their success or failure seems to rest on the same thing — luck. And a majority of those accounts have bad luck, incurring either some (61.7%) or significant (6.2%) losses. Only about 28.9% were considered to be “lucky,” earning insignificant profits, according to the paper.

“You need to be sophisticated,” one of the coauthors told CBC. “If you are just clicking there, you will be eaten alive.”

At this point, Canadians looking at prediction markets as a long-term investing strategy may want to ask themselves this question: Do you really want your financial success to depend on luck? Or are there better strategies out there to make the most of your investments?

Do prediction markets ‘blur the line?’

As prediction markets are set to open up shop in Canada, debate over whether Canadian investors should enter into them is intensifying, particularly among those who worry they “blur the line” between gambling and investing.

As an example, they only have to look to the U.S., where prediction markets are “almost like an offshoot of sports betting,” Li Zhang, director of social impact and financial literacy leader at CPA Canada, told the Globe and Mail.

The numbers back her up. Sports represents the biggest share of trades by far on Kalshi, making up a whopping 80% of total trading volume since July 2024, according to data analyzed by the Pew Research Center. It’s especially popular among males aged 18 to 34, with 11% of those polled by research firm SSRS saying they use prediction markets to bet on sports, compared to the national average of 5%.

That’s perhaps why Canadian regulators have not approved the use of prediction markets for sports or elections. Wealthsimple is only permitted to offer contracts on “economic indicators, financial markets and climate trends,” as reported by the Globe and Mail.

Even still, most Canadians are not convinced. Roughly three-quarters (74%) polled by CIBC Investor’s Edge say prediction markets are “more like gambling than investing,” while over half (57%) think they shouldn’t be on investment platforms.

Zhang simply calls them an “easy way to lose your money.”

Finding the safer bet

For many Canadians, their best bet is probably to stick to more passive investment strategies, which rely less on luck or skill while offering steady long-term returns.

Exchange-Traded Funds (ETFs) are becoming an increasingly common feature of investment portfolios in Canada, having just hit $1 trillion in gross assets under management in July 2026. There are also more product options to choose from than ever, with over 2,000 ETFs now available to Canadians.

And there are good reasons why ETFs have become so popular. Since they pool a group of securities, such as stocks or bonds, their success isn’t determined by returns from a single asset. They also give investors the chance to further spread their exposure to risk by diversifying their investments, whether they track an index, like the TSX, or industry, like mining, or other asset classes.

Another advantage is that ETFs can be bought and sold on a stock exchange, much like stocks, making them easily accessible to DIY investors. Plus, the costs are generally lower than similar assets like mutual funds. However, those lower costs can be offset by the commissions charged by brokers for buying and selling ETFs.

That’s why it’s always a good idea to shop around to find trusted brokerages that also offer minimal commissions on trades. For these investors, there are online platforms like CIBC Investor’s Edge, which gives them the security of one of Canada’s biggest banks without having to pay exorbitant commissions.

With their comprehensive online trading platform, it actually pays to trade more. Active traders making over 150 trades a quarter get a discounted commission rate of $4.95 per trade. Plus, CIBC doesn’t charge any account or maintenance fees if the combined market balance of all accounts is greater than $10,000.

Opening a discount brokerage account with CIBC Investor’s Edge can help you diversify your portfolio while not being dragged down by commissions and fees — keeping your cash where it belongs, with you.

Want to know more? Here’s a review of the CIBC Investor’s Edge platform and its features.

Take investing out of your hands

But not every Canadian wants to go down the investing path on their own. If you know you should be investing but don’t want the guesswork of doing it alone, Wealthsimple Portfolios offers an easy, hands-off way to grow your money.

Their pre-built portfolios are tailored to your retirement goals, risk tolerance and investment horizon, so whether you’re saving for retirement, a home or building long-term wealth, there’s a portfolio that’s right for every investor.

Expert-managed and designed to weather market ups and downs, Wealthsimple takes care of the heavy lifting: automatic contributions, dividend reinvesting and smart rebalancing keep your investments on track.

You can invest through RRSPs, TFSAs or non-registered accounts, all from an intuitive online dashboard or their easy-to-use mobile app.

Trusted by more than 3 million Canadians, Wealthsimple manages over $100 billion in assets and provides $1 million in eligible coverage through the CDIC for chequing accounts and CIPF for investments. Plus, as licensed fiduciaries, Wealthsimple’s advisors must put your financial interests first.

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