Buying Stocks Without a Broker

Think of investing like moving houses. In a move, people need to get all of their belongings from one place to the next. Now, there’s a variety of ways to do so. They can ask friends and family for help, do it on their own, or hire a professional moving company.

Now, how a person decides to move is up to them, but the end goal is moving into a new home. Just like moving houses, investing in the market requires moving funds from one account to the market—the investor has to choose by which means they’ll get there.

Some methods might mean more work on the investor’s end, and others leave it to the professionals.

In the investing world, stockbrokers are like professional movers in the above scenario. They’re professionally trained, with plenty of moves under their belt. Their experience can make them a valuable resource, they know just how to move that box of dishes without breaking a single one.

Why Investors Use a Stock Broker

No one says a person has to use professionals to move successfully, but for some, they can provide a sense of relief. Now, stockbrokers aren’t going to move a persons’ couch down three flights of stairs in the middle of the summer, but they will provide them with a plethora of investment services:

•   They’ll trade securities for their clients, and usually earn a commission off of each trade.
•   Stockbrokers who are also financial advisors may dispense trading advice based on their experience with the stock exchange and education.
•   Give their clients additional tips and suggestions, like what investments they should buy and sell.

The day to day dealings of a stockbroker are not dissimilar to sales. Their salary is largely dependent on commissions, which means they’ve got to be pretty good at what they do to make a living.

Working with a stockbroker can mean building a human relationship within a person’s investment strategy. This way there is someone available to discuss ideas and strategies, and investors can benefit from a stockbroker’s experience.

This isn’t taking a hot investment tip from an uncle or someone at the grocery store–stockbrokers have to pass several licensing exams and work with a registered firm.

That being said, for most stockbrokers, their payment comes from your trades, which means a client has to pay their stockbroker every time they buy, sell, and trade.

For some, the knowledge of a stockbroker is worth the cost of doing business. For others, the idea of DIY-investing is more appealing. It all depends on personal preference–does a person want to move on their own, or pay someone else to do it?

Full Service vs. Online Brokers

Before the development of online brokers, it used to pretty much be a one-horse town when it came to investing. Pre-1970s, if a person wanted to put their money in the market, they had to work with a full-service broker (like those described above), and likely had a relationship with them as they managed a chunk of the investor’s finances.

The world of investing started to change in the 70s with Charles Schwab . Now a big name in investing, it was the first to offer discount trades in the world of investing.

At the same time, technology was becoming a bigger part of life on the trading floor. Brokers started using computers and software instead of landlines and phone calls to execute trades.

As technology evolved, so too did the nature of investing. The development of Electronic Communication Networks (ECNs) and the expansion of the internet into our day to day lives made it easier for anyone to trade.

Now, fast forward to today, and people can quickly and affordably invest on their phone through an app with the tap of a few buttons, no stockbroker required. So how do the online brokers of today differ from the experience with a full service brokerage?

•   The investor is in control. With an online broker, the investor is the one deciding what to buy and sell. They don’t have a stockbroker telling them what to do, meaning they can make trades at the drop of a hat. This is helpful for buyers who like to keep an eye on their investments and enjoy making frequent changes and tweaks to their portfolio.
•   Investors don’t need much money to get started. With online brokers like SoFi Invest®, investors need as little as a $1 to get started, and they can trade for free or little charge, unlike traditional brokerages where each transaction will cost the investor. Additionally, many online brokers allow people to invest in fractional shares, like SoFi Stock Bits, where a person need only buy a portion of a stock instead of the whole thing.
•   The investment tool is in the palm of an investor’s hand. Online brokers of today have simple to use apps where a person can trade anywhere they can take their phone. This is dramatically different from the full service brokers, where someone might need to call to execute a trade.
•   Investors can have a diverse strategy. Most online brokers have a variety of accounts to open available through their services. Someone can invest in ETFs, stocks, bonds, and more, depending on their offerings.
•   The investor has to do their own research. Online brokers make it cheaper, easier, and faster to invest, but that comes with the tradeoff of more legwork on your end. An investor won’t have a dedicated person working on their account like a full service firm so it’s up to them to research and decide which investments are ultimately best for them.
•   Investors are on their own. If a person is using an online broker, chances are they won’t have much human interaction. It’s unlikely there’s an office to visit, or even a specific individual to call if they have questions. This is one of the ways online traders keep costs down, but it does keep an investor from working with humans.

To circle back to the moving metaphor, a person deciding to move on their own is like using an online broker. An independent move means doing all of the packing and moving items from one place to the next.

The person moving is in control of every aspect of the move. They get to decide, through their own research and legwork, what method of moving works best for them.

Buying Stocks Solo

How can a person pull a DIY and buy stocks on their own? There are a couple of routes they can take. Read on to learn about different investment strategies.

Direct Stock Purchase Plans

Direct Stock Purchase Plans (DSPPs), let people go straight to the source to directly invest in a company that’s publicly traded. That means an investor wouldn’t need to use a broker, traditional or online, at all in the transaction.

Not all publicly traded companies offer DSPPs, but some companies that do include well-known names like Walmart, Clorox, or McDonald’s.

Buying DSPPs comes with its own unique set of advantages:

•   Passive investing. Many DSPPs plans allow an investor to set it and forget it—meaning they can invest a set amount on some kind of recurring basis.
•   Lower fees. DSPPs often charge little or no commissions or fees, once the account is set up.
•   An investor might get a discount. Depending on the company a person invests in, they might be offered a slight discount, between 1% and 10%, for investing directly.

While DSPPs have benefits, there are some drawbacks as well:

•   Higher upfront costs. While the DSPPs usually don’t charge commissions or fees, there can be a cost associated with starting the account. DSPPs oftentimes require a $250 to $500 initial investment and they don’t permit the purchasing of fractional shares.
•   It’s another account. DSPPs are held with individual corporations. Investors can’t consolidate your DSPP holdings into a single account, they all live on each company’s individual platform.
•   They’re typically long term investments. DSPPs don’t offer the same flexibility and speed of an online broker. For that reason, they’re typically considered more appropriate for a long term investment.

Investing in a DSPP is going straight to the source for a long term investment. While it’s not for everyone, some investors will find a benefit from the set up.

Dividend Reinvestment Plans

Dividend Reinvestment Plans (DRiPs), share many similarities to DSPPs— some DSPPs offer DRiP programs. Investors are still buying stock directly from the publicly traded company, but a DRiP allows them to reinvest the dividends earned on the stock directly back into the company to purchase additional stock.

So, instead of quarterly cash payouts, that cash is reinvested. DRiPs are not always offered with DSPPs, because some companies don’t pay out dividends on a regular basis.

In addition to the benefits of DSPPs, DRiPs have a few to offer on their own:

•   It’s automated, compounded growth. Reinvesting dividends is not dissimilar to compound interest. DRiPs allow investors to continually reinvest and grow, without having to add funds.
•   Fee-free reinvestment, even in fractional shares. Investing the dividends comes fee-free. Investors are also usually offered the opportunity to buy fractions of a share.

DRiPs share many of the same drawbacks as DSPPs, but also have a few specific to them:

•   Limited selection. Not all companies that offer DSPPs offer DRiPs, which means you’re selecting from a smaller pool.
•   Dividends are still taxable. Although the cash is automatically reinvested in a DRiP, investors will still be taxed on the gains. That means they’ll need to have liquidity elsewhere to pay the tax.

DRiPs, while they share DNA with DSPPs, are a strategy all on their own. Depending on individual financial circumstances, they could be a worthwhile option.

Online Brokerage Accounts

If online brokerage accounts were a restaurant, they’d have counter service. An investor places an order and the brokerage fills it. That means an investor saves on the cost of service, but loses the opportunity for table service or, in this case, the full services offered by a traditional brokerage.

After opening an account with an online brokerage, what an investor does with it next is up to them. They tell their broker what they want to buy, and how much of it. Then the broker completes the order.

Depending on the online broker, there may be low or no fees associated with making a trade. It might sound pretty easy, but online investing has its own share of pros and cons. Here are a few of the advantages:

•   Low fees. When it comes to online investing, people can typically expect to pay lower fees. Recently, many online firms have even eliminated commissions.
•   DIY investing. There’s a lot of freedom that can come with an online brokerage account. An investor gets to choose, creating a customized plan.
•   It’s on-demand. As long as the markets are open, an investor can ask for trades through their e-investor.

Of course, with all the benefits come a few drawbacks:

•   It’s all on the investor. Online brokerages don’t often offer the services that would be available with a full service broker. Online investing can give investors a lot of choice and freedom, but without the expertise of qualified financial professionals, some investors might be left to research and form a strategy on their own. For some, this might feel stressful.
•   It’s for the long term. Since online investing is on-demand, a person can sell whenever they like. That can be a challenge for an investor if patience isn’t their strong suit.

Online brokerage accounts have come a long way, and they’ve helped to remove some of the barriers preventing people from investing. However, they’re not for everyone.

Buying Stocks without a Broker

There are quite a few ways to purchase stocks without the assistance of a full-service broker, and there’s no one right way to do it.

Investors interested in pursuing an online investing strategy might want to consider SoFi Invest, which offers a variety of investing opportunities. With SoFi Invest, people have the option to set up an automated investing account or use an active investing strategy. Investors are also able to invest in ETFs and buy cryptocurrency.

Plus, all SoFi Invest members have access to SoFi Financial Advisors who can offer personalized insights based on individual financial goals.

Interested in investing with SoFi? Learn more about SoFi Invest.

Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.


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What is Market Cap?

A company’s market capitalization, or market cap, provides a good measure of its size and can tell you a lot of important information that can help you build a diversified portfolio.

Market capitalization, commonly known as market cap, is a measure of a company’s value, which is what most investors refer to when they talk about the size of a company.

It represents the value of the total number of outstanding shares. It’s an important figure to consider when comparing similar companies or considering future growth expectations.

To figure out a company’s market cap, all you need to do is multiply the number of outstanding shares by the current price per share. If a company has 10 million outstanding shares of stock selling for $30 per share, the company’s market cap is $300 million.

Share prices fluctuate constantly, and as a result, so does market cap. You should be able to find the number of outstanding shares listed on a company’s balance sheet, where it’s referred to as “capital stock.” Companies update this number on their quarterly filings with the Securities and Exchange Commission (SEC).

In some cases, market cap can change if the number of stocks increases or decreases. For example, a company may issue new stock or even buy some back.

Stock splits do not increase market share, because the price of the stock is also split proportionally. Changes to the number of shares are relatively rare, however. More commonly, investors will notice that changes in share price have the most frequent impact on changing market cap.

What Is Free-Float Market Cap?

Full market cap is calculated using the total number of outstanding shares, including shares selling on the open market, and also those that may not be available yet. For example, it’s common for companies to provide employees with stock options or restricted stock units as part of their compensation package.

These become available to employees according to a vesting schedule. Before vesting, employees typically don’t have access to these shares and can’t sell them on the open market.

The free-float method of calculating market cap excludes shares that are not available on the open market, such as the locked-in shares owned by company insiders and governments. As a result, the free-float calculation can be much smaller than the full market cap calculation.

However, this method could be considered to be a better way to understand market cap because it provides a more accurate representation of the movement of stocks that are currently in play. Many of the major indexes, such as the S&P 500 and the MSCI, that track stock movements use the free-float method.

Market Cap Versus Stock Price

If you’re new to investing, you may assume a company’s share price is the clearest indicator of how large a company is. You may even assume it’s as important in choosing a stock as market cap.

While the share price of a company tells you how much it costs to own a piece of the company, it doesn’t really give you any hints as to the size of the company or how much the company is worth.

Market cap, on the other hand, might give you some hints about how a particular stock might behave. For example, large companies may be more stable and experience less volatility than their smaller counterparts.

Categorizing With Market Cap

There are many thousands of companies investors can buy shares in, and the values of publicly traded companies can range widely from a few million dollars up to a trillion dollars or more.

To help investors keep track of all of this information, stocks are categorized into various buckets, including by market cap.

Analysts commonly sort stocks into small, mid, and large cap stocks, though some include a broader range that goes from micro cap stocks on the small end all the way to mega cap on the large end. The size limits of these categories can vary by company or stock market index. Here’s how each group is commonly broken down.

Large Cap

Companies with a market cap of $10 billion or more make up this category.. You may hear large cap stocks referred to as blue chip stocks. These companies are typically stable industry leaders and have a proven track record that can make them popular with investors.

Mid Cap

The mid cap group comprises companies with a market cap of $2 billion to $10 billion. Mid cap stocks may represent growth stocks on their way to becoming bigger, pricier companies.

As a result of this growth potential, these stocks are considered to be a little bit more risky than their blue chip counterparts.

Small Cap

With a market cap of less than $250 million to $2 billion, small cap stocks typically represent relatively young companies.

There’s growth potential, but these stocks often don’t have a very long track record, so they’re considered riskier than blue chip and mid cap stocks.

Micro Cap

Micro cap stocks have a market cap of less than $250 million.

What Market Cap Tells You

When comparing stocks, it can be helpful for investors to compare apples to apples. If an investor were considering investing in a small and relatively new tech startup, it wouldn’t be very helpful to compare it to a tech behemoth.

Understanding the market cap of a company can help investors evaluate the company in the context of other companies of similar size. For example, an investor choosing between auto manufacturing stocks could look at large cap companies in that sector and compare how they are doing against each other.

If one company is significantly underperforming others of a similar size, it can be a clue to dig deeper into what is hurting its value.

Investors can also evaluate how a company is doing by comparing its performance to an index that tracks other companies of a similar size, a process known as benchmarking. The S&P 500, a common benchmark, is a market cap weighted index of the 500 largest publicly traded U.S. companies.

Within this system, companies with higher market cap make up a greater proportion of the index. You may often hear the S&P 500 used as a proxy for how the stock market is doing on the whole.

Investors can compare large cap companies against the S&P 500 to get a sense of how they are performing relative to a broad swath of their competitors. There are all sorts of indexes that investors can use to compare stocks of different sizes.

The S&P MidCap 400, for example, is a market cap weighted index that tracks mid cap stocks. The Russell 2000 is a common benchmark index for small cap stocks.

Market cap can also clue investors into stocks’ potential risk and reward, in part because the size of a company can be related to where that company is in its business development. Typically, small cap stocks are considered to be riskier investments.

They may be relatively new companies, and the market they are entering may be untested. What’s more, compared to larger companies, they have relatively few resources, such as access to cheaper credit and access to liquidity.

As a result, economic downturns can take a greater toll on them. That said, these companies may offer high long-term growth potential, though investors must be prepared for the possibility of price volatility in the short-term.

Mid cap stocks also potentially offer growth for investors. These companies may be more proven in their respective markets than their small-cap counterparts, and may be actively and successfully increasing their market share.

Mid caps may offer greater stability than small caps and more growth potential than large caps.
Investments in large cap stocks are generally considered to be more conservative than mid and small caps.

These stocks tend to be less volatile than smaller stocks and tend to offer steady returns. Large cap companies tend to be mature and unlikely to offer fast growth. Investors ultimately are deciding between trade growth potential for low risk.

Many investors are also drawn to large cap stocks because companies of this size frequently pay out dividends. When reinvested, these dividends can be a powerful driver of growth inside investor portfolios.

Market Cap and Diversification

So how do you use market cap to help build a portfolio? Market cap can help you choose stocks that could help you diversify. Building a diversified portfolio made up of a broad mix of investments is a strategy that can help mitigate risk.

Different types of investments perform differently over time and depending on market conditions. This idea applies to stock from companies of varying sizes, as well. Depending on market conditions, small, medium, and large cap companies could each beat the market or trail behind.

A diversified portfolio might start with an understanding of your personal goals, risk tolerance, and time horizon. Time horizon is the amount of time you are willing to hold their investments until you need your money, and risk tolerance is how willing you are to hold more volatile investments in return for potentially greater returns.

Based on those factors, investors can set an asset allocation that determines what percentage of their portfolio will include stocks. For example, a common portfolio might contain 60% stocks and 40% bonds.

Inside the stock allocation, investors can use the same factors of goals, time horizon, and risk tolerance to determine what mix of stocks to include based on company size and other factors, such as geography and sector. As market shifts occur, portions of this portfolio can behave differently.

For example, as mid cap stocks are on their way up, large cap stocks could be on their way down. In this case, the positive movement of the mid cap stocks has the propensity to temper the negative effects of the large cap stocks.

How to Use Market Cap to Invest

Investors can use market cap to help them choose individual stocks by comparing like stocks and looking at them in relation to an appropriate benchmark index.

However, building an entire portfolio through individual stocks can also be a time-consuming and potentially tricky endeavor for the average investor as they try to maintain a balanced portfolio. Luckily, there’s a way to outsource some of this work.

Investors have the option to buy mutual funds, and exchange-traded funds (ETFs) that seek to mirror the returns of indexes that track stocks based on market cap. You might start by opening an investing account with SoFi. The type of account you open could be determined by your goals.

If you want to buy individual stocks, you might want to consider using an active investing account, which will allow you to handpick stocks that interest you.

If you’re more of a hands-off type of investor, you might want to consider using an automated investing account. Accounts like these invest in funds that are already diversified across factors such as market cap.

If you’re ready to learn more about online investing with active and automated accounts, visit SoFi Invest®.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.


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What is Asset Allocation?

When the market is volatile, you might be hesitant to put your money into an investment portfolio. What even is a portfolio? It sounds like something complicated and slightly overwhelming. There are lots of things to understand and a lot of terms— What are assets? What is asset allocation? How do you diversify?

Asset allocation is the base principle of building an investment portfolio, and understanding how it works is key to getting started towards your financial goals. Investing doesn’t have to be complicated — unless you want it to be.

Asset allocation is simply how your investment portfolio is divided up into different assets—ie. how your money is allocated across asset classes and within each category.

There are lots of different kinds of assets: stocks, bonds, cash, real estate, commodities, and even private equity or hedge funds. When you invest your money, you typically put it into different kinds of assets.

Determining what kind of asset allocation makes the most sense for you depends on your personal goals, time horizon, and risk tolerance.

Asset allocation also refers to how money is allocated within the asset class. That means you might decide to put a portion of your investments into stocks (an asset class), but you also have to decide which kinds of stocks you’ll invest in depending on what you’re looking for in return, risk, and time frame.

What is asset allocation? It’s just a fancy term for how you decide to invest your money across different kinds of assets or investments.

What is a Good Asset Allocation Strategy for Most Investors?

In his book All About Asset Allocation , Rick Ferri says, “Your investment policy and portfolio asset allocation will be unique. It will be based on your situation, your needs today and in the future, and your ability to stay the course during adverse market conditions.

As your needs change, your allocation will also need adjustment. Monitoring and adjusting is an important part of the process.” His point is there is no one perfect asset allocation. Selecting the best asset allocation to meet your financial goals depends on a number of factors, most importantly your timeframe and your risk tolerance.

For example, if you’re very far away from retirement, then you may be able to handle more risk in your retirement portfolio. But if you’re investing for your teenage kids’ college education, then that’s a shorter time frame and you probably shouldn’t take as many risks.

Your risk tolerance will also affect how you react to ups and downs in the market. Multiple studies have correlated the frequency with which you check your portfolio to losses over time — the more you stress over it, the more likely you are to pull your money out when you should just wait and stick with it.

So if you’re going to be someone who worries about every little blip in your investment portfolio, then you might need less risky investments. No investment is without risk, but you can spread the risk out across different assets and asset classes.

And, in general, higher-risk investments often have higher returns — which is also why you probably want to pick an asset allocation that balances the amount of risk you can handle with the amount of return you’re looking for.

The most common assets you can invest in are:

•   Stocks: Stocks can be volatile, with the market going up and down, but they can also offer a higher return than bonds over the long run, which is generally defined as any period longer than 10 years.
•   Bonds: Bonds, such as treasury or municipal bonds, can be low risk because they’re backed by government entities, but they also offer lower returns. There are higher-yield bonds and corporate bonds, as well, which have slightly higher returns and slightly higher risk, but are typically still lower risk than stocks.
•   Cash or cash equivalents: This includes money in savings accounts or money market accounts, as well as certificates of deposit or treasury bills. Obviously, the returns on these are very low but they’re also very secure. The biggest concern with cash investments is if inflation outpaces the return, then you technically could be losing money (e.g. future purchasing power).

There are other more complicated assets you can invest in, but for most people an asset allocation made up of stocks and bonds and cash is appropriate.

A common rule of thumb is known as The 100 Rule: Subtract your age from 100 and that’s the percentage of your portfolio that should be invested in stocks.

For example, if you’re 25, then the 100 rule would suggest that 75% of your portfolio be in stocks and 25% in safer investments, like bonds, treasury securities, cash or money market accounts.

Target date funds, in fact, are simply funds that more or less follow this style of rule — automatically adjusting the make-up of stocks vs. bonds as you near your target retirement date.

However, there are some caveats to this rule of thumb — people are living longer, your particular situation might be different, and it really only is an asset allocation suggestion for your retirement investments, not any other financial goals you might have. (Some financial advisors have even adjusted it to The 110 or 120 Rule because of increases in life expectancy.)

What Are Other Asset Allocation Strategies?

For investors who want to be more active in their investment decisions or have more complicated financial goals, there are other asset allocation strategies. More complex investments include real estate, commodities (a raw material that can be bought and sold, like gold or coffee), private equity or hedge funds, and direct investments in private companies.

There are even more exotic assets, like cryptocurrencies or even things like fine art. All of these can have a place in your investment portfolio depending on your goals, timeframe, risk tolerance, knowledge and willingness to stay informed.

Just because something is more complex does not mean that it will outperform a simpler strategy. If you don’t understand what’s in your portfolio, you’re actually less likely to stick with it during turbulent times in the market.

There are some asset allocation strategies that involve balancing what you want in returns with the different potential assets. For example, you can decide how much return you want over what time period, and then mathematically work out the average returns expected per asset class and weight the asset classes. Of course, that’s no guarantee of a specific return, but it’s one way to create a portfolio.

Another way is to use a long-term strategic asset allocation, like the ones discussed above, but then adjust it tactically for short-term opportunities — ie. because you want to invest in the short-term in a particular stock or company, or put money into a venture capital fund.

The key to active investing like this is knowing when to adjust your strategy. Active investing requires more active involvement—you have to do your research and know about your investments.

What Does Rebalancing Have to Do With Asset Allocation?

The other factor to consider is when to rebalance your portfolio in order to stay in line with your asset allocation goals.

Over time, the different assets in your portfolio have different returns, so the amount you have invested in each changes—one stock might have high enough returns that it grows and makes up a significant portion of your stock investments.

If, for example, you’re aiming for 70% in stocks and 30% in bonds, but your stock investments grow faster until they make up 80% of your portfolio, then it might be time to rebalance.

Rebalancing just means adjusting your investments to return to your desired portfolio make-up and asset allocation.

There are many rebalancing strategies, but you can choose to rebalance at set times — monthly, quarterly, or annually — or when an asset changes a certain amount from your desired allocation (for example, if any one asset is more then 5% off your target make-up).

In order to rebalance, you simply sell the investments that are more than their target and buy the ones that have fallen under their target until each is back to the weight you want.

Why Is Asset Allocation Important?

The effect of asset allocation has been studied over the years and, while the findings varied, one thing has remained constant—how you allocate your money to different assets is vitally important in determining what kind of returns you see.

Perhaps the pivotal study on the subject found that asset allocation variances accounted for about 90% of variability over a given period from one portfolio to another. When you factor in all the other factors — style within asset classes, asset class timing, fees — asset allocation accounted for 100% of the absolute level of returns.

If you wanted, you could decide to allocate all your money into one asset class, which might make sense for your financial goals depending on what they are, but that’s not a common strategy.

That’s why asset allocation is very closely tied to portfolio diversification. Diversification means spreading your money across a diverse range of assets, and diversifying your money within each asset class.

In a general sense, portfolio diversification and asset allocation are important because you probably don’t want to put all your eggs in one basket. You can’t avoid risk entirely, but by diversifying your investments you spread the risk out across multiple assets.

This is easier to understand in the example of the stock market—just because one stock goes down, it doesn’t mean they all do. If you’re invested in different types of stocks, then it’s more likely in the long run your stock investments will go up.

However, it’s more than just diversifying within each asset class—it’s also about diversifying your entire investment portfolio across asset classes and styles. In general, for instance, stocks are considered riskier than bonds—though there are also different kinds of bonds.

It can be difficult to diversify your portfolio on your own — you would have to buy each individual asset, which can be confusing and can come with fees and minimums.

That’s why investors might choose to use mutual funds or ETFs to easily construct a well-diversified asset allocation. A mutual fund or ETF is essentially a pool of money from many investors, which then invests in a number of assets, allowing investors to own a small portion of all of those assets. It can give instant diversification with one click.

You can invest in funds that index the market or funds with target dates (which change the asset allocation automatically over time in order to target a specific retirement date).

There are many different kinds of funds with different asset allocation, and a fund doesn’t guarantee diversification—especially if it’s a fund that invests in just one sector or market. That’s why it’s important to understand what you want out of your portfolio and find an asset allocation to meet your goals — which may require professional help.

How Does SoFi Use Asset Allocation?

SoFi Invest® uses asset allocation to find the right portfolio mix for your finances and time frame. With automated investing, SoFi matches the asset allocation to your financial goals and risk tolerance.

SoFi invests in a mix of exchange-traded funds (ETFs), which are a type of mutual fund, to create a diversified portfolio that automatically rebalances.

If you want to be more active in your investing, then SoFi also gives you the chance to tailor your asset allocation to meet your needs. There are no account minimums and no fees for making trades.
Plus, you get real-time investing news and updated content about the stocks that matter to you, so you can stay informed about your assets.

Most importantly, you don’t have to be an expert to invest with SoFi Invest. A SoFi advisor can help you figure out what asset allocation makes sense for you. Start by telling us about yourself, your goals, and your other financial obligations, and then be as hands-on (or not) as you want.

Ready to invest in a variety of assets? See if a SoFi Invest account is right for you.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.


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7 Tips for Improving Your Financial Health

Poor financial health can linger like a stubborn cold that just won’t go away. Plenty of fluids and rest might get someone back in fighting shape, but there’s no single cure that’ll bring someone’s finances back to good standing. However, that doesn’t mean throwing in the towel.

Staying in good financial standing means a stronger credit score, peace of mind, and often better terms when applying for loans in the future.

Improving financial health takes time, effort, and often multiple strategies. Take a cue from these seven tips below to help kick that financial cold once and for all.

Making a Budget

For most, the idea of budgeting brings a sense of dread. Budgets conjure the image of fewer meals out, clipping coupons, and generally saying “no.” But in reality, a budget is a tool for efficiency.

It could help determine how much to spend and save in a month, and might actually create a sense of freedom. It might help eliminate that stomach ache that arrives each month when the credit card bill comes in the mail. One way to start budgeting is to collect the previous month’s spending in a single place. Think of it like the Marie Kondo method.

Pull everything out all at once into one big pile to get an idea of each month’s spending patterns and income—taking note of multiple bills for rarely used streaming services might “spark” a budgeter to unsubscribe and save a few bucks a month.

This spending information could be found in bank statements or credit card bills or might need to be logged manually depending on how much cash a person uses. Budgeting might include the following financial information, but this is in no way an exhaustive list:

•   Credit card statements and debt
•   Education loans
•   Car loans and additional expenses, including fuel, insurance, etc.
•   Health care insurance premiums
•   Rent/mortgage, including home or renter’s insurance
•   Utilities
•   Monthly food expenses
•   Child care, child support, or related family obligations
•   Additional transportation (excluding a car)
•   Savings/investments, such as a 401(k), an IRA, or automatic savings deductions
•   Average monthly income from pay stubs or bank account statements

With this information, a budgeter can get a general sense of net expenses month over month. Do months generally net out positive or negative? Is there money left over or is it a close call?

This might be the toughest part of the budgeting process, and once it’s in the rearview, creating a simple budget moving forward could make all the difference. Every budget will look different for every person, but one guideline to keep in mind is the popular 50/30/20 budget.

This budget dictates that:

•   50% of post-tax income goes to essential spending. This includes finances that are required, such as rent/mortgage, groceries, health insurance, and utilities.
•   30% of post-tax income goes to discretionary spending. This is spending that a person could cut if they were in a pinch. It includes things like dining out, Netflix memberships, and fitness classes.
•   20% of post-tax income is dedicated to savings. This money is put toward future spending, whether that be retirement contributions, emergency savings, or larger loan payments.

Sticking close to the 50/30/20 budget at the outset could help illuminate blind spots in spending. It might reveal that a budgeter is spending too much on dining out, going far beyond the 30% discretionary spending.

Or it may show that essential spending, like astronomical monthly rent, doesn’t leave much wiggle room for the 20% savings. Expenses and spending habits might wax and wane with the seasons, but that’s no excuse to keep a person from establishing a budget.

It’s a good idea to start with a budget that’s simple to maintain and easy to stick with but still helps manage money and improve financial health.

Paying Off Debt

The amount of debt a person carries can have a pretty big impact on their overall financial health. Thirty percent of a person’s credit score consists of how much they owe in relation to their credit limits.

To stay in good financial health, it’s a good rule of thumb to use no more than 30% of the credit available.
If a borrower is trending above that 30% limit, they might make paying down debt a top priority to improve financial standing.

There’s no one right way to pay down money owed, but these are some popular strategies that could help eliminate debt faster:

Snowball Method

The snowball method starts small and grows as it picks up momentum. Debtors pay the minimum on all loans, regardless of interest rate and amount. From there, they’ll put any surplus cash in their budget toward paying off their smallest debt.

Once the smallest debt it paid, they’ll roll the amount of that monthly payment into the next smallest balance. This method continues, growing monthly payments toward larger loans as the smallest are eliminated. This method makes for wins early on, knocking out the little guys first, and growing toward those large or intimidating balances.

Avalanche Method

The avalanche method is nearly the reverse of snowball, focusing on interest rates of loans instead of balances. Budgeters ignore the total amount of each loan and prioritize repayment of the highest interest rate loan first.
Like the snowball method, they’ll pay the minimum on each loan every month, but they’ll put the surplus of their budget towards the high-interest bill.

Once the highest interest rate loan is paid down, budgeters will focus on the next highest interest rate, and so on. This method tackles the intimidating high-interest rates, then downshifts to the smaller loans. Like an avalanche, the method starts big, then peters off as it becomes easier to pay off low-interest loans.

Fireball Method

When someone can’t choose between the snowball and avalanche method, the debt fireball method may be the answer.
It’s a hybrid between the two strategies above, asking budgeters to sort between good and bad debt and focus on repaying bad debt first. Bad debt, like credit card debt, is debt that generally has a high-interest rate (above 7%).

Good debt, on the other hand, are things like a mortgage or student loans, they generally have lower interest rates and are good investments to make.

The general idea: Rank the bad debts from small to large based on balance. Make the minimum monthly payments on each debt, but use extra cash to pay off the smallest “bad” debts first.

Once the smallest is knocked out, pay attention to the next smallest, and so on until all bad debt is burned up. Then, budgeters need only to pay off “good” debts normally.

Without a plan to properly tackle it, debt can be crushing. However, once a person decides to torch, roll, or overwhelm their loans with a payment method, they’re in control.

Curbing Spending Habits

When spending money is as simple as swiping a card or tapping a phone, it’s no wonder impulse spending is out of control. While a couple of lattes or convenience store trips don’t feel expensive at the point of sale, they add up over time.

Prime orders make it easy to drop $20 here and $40 there, without leaving the comfort of home.
One way to curb these frivolous spending habits is instituting a “hold” period on all purchases.

Instead of hitting “buy now,” shoppers could consider waiting 24 hours, or even 72, before completing the purchase. Creating a waiting period eliminates that instant gratification dopamine rush and allows for logic and reasoning to take hold.

After the allotted waiting period, shoppers can return to the online cart or boutique to reconsider the purchase. They might just realize they don’t need it.

Automating Savings Transfers

Tackling financial health can be exhausting, and it wouldn’t be surprising if some habits fell through the cracks in the process. There’s a lot to keep track of, and that’s where financial automation can lend a hand.

Setting up an automatic transfer each month from checking to savings account means even the busiest budgeter won’t have to remember to do it manually.

Transferring an amount, even if it’s small, into saving each month might mean there’s less of a temptation to spend. Remember, saving a little is better than saving nothing at all. Making it automatic is one less thing for a busy person to remember.

Paying Bills on Time

Thirty-five percent of a credit score is based on payment history—it’s weighted more than any other factor. When it comes to improving financial health, paying bills on time can have a pretty significant impact.

One way budgeters can ensure timely payment is automating bill payment through a checking account or adding bill due dates to personal calendars. Even if a person can’t afford to pay a bill in full, they should pay the minimum amount due to avoid a penalty.

Starting an Emergency Fund

Only 40% of Americans say they’d be able to cover an unexpected expense totaling $1,000 or more. Without an emergency fund, people are forced to dip into their retirement savings or rack up credit card debt when unexpected finances arise.

A savings account could be set up using an automated savings transfer with a goal of saving $1,000 to start. This probably won’t happen overnight, and that’s okay. Even the smallest savings can build up over time.

Once a budgeter has $1,000 socked away in a savings account, they could start thinking big. With an eye on monthly expenses, they could aim to accrue three to six months’ worth of expenses in a savings account. It’s important these savings stay liquid for easy access in the event of an emergency.

Building up a robust emergency nest egg can create a sense of well-being when it comes to financial health. Budgeters can rest easy knowing they have savings set aside for whatever life throws their way.

Staying up to Date on Credit Reports

Checking a credit score is equivalent to an annual check-up at the doctor’s office. While negative factors such as late payments and collections can stick around on a credit report for up to seven years , they’ll impact a score less and less as time passes.

Pros recommended checking on credit scores at least once a year or more to stay on top of financial health. Federal law allows for one free credit report every 12 months, but budgeters looking to go above and beyond can also try major credit bureaus Experian , Equifax , and TransUnion for free annual credit reports, but not scores. You could also use a credit score monitoring tool like SoFi Relay.

Checking in on credit score regularly will give budgeters not only a sense of how their efforts to improve financial well-being are going, but they’ll also make it easier to find and dispute errors if they arise.
Think of regular check-ins on credit like progress reports on a person’s financial health.

Tracking Financial Wellness with SoFi Money®

Tackling all the steps to improve your financial well-being can be overwhelming, but with a SoFi Money® cash management account, you can track all your spending and saving with a single dashboard. You could set up automatic transfers to savings accounts for different goals, all while earning competitive interest.

With SoFi Money®, it’s easy to save, spend, and earn all in one place. Get started today.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank.


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What is a Direct Stock Purchase Plan (DSPP)?

When you buy vegetables from a grocery store, you know farmers grow the vegetables, then a distributor might buy from the farmer and sell the vegetables to grocery stores, and stores then sell those vegetables to you, the consumer. This is comparable to investors using a broker to buy shares of stock, because there is a middle person involved.

But you can sometimes purchase food directly from growers, perhaps at farmers markets. This direct form of purchasing can be comparable to participating in a direct stock purchase plan (DSPP).

Direct Stock Purchase Plan Explained

At a high level, DSPP is a term that pretty much means what it says. When a company offers a DSPP, individual investors can directly purchase shares of that company’s stock without the need for broker involvement. If someone has a 401(k) retirement account at work and has stock from the employer’s company included in a portfolio, then this process has some similarities.

Briefly returning to our vegetable analogy, buyers can sometimes get a better price from a farmers market, because the distributors and grocery stores may mark up their prices to cover their own costs.

With a DSPP, investors directly purchase shares of stock, sometimes at a small discount, which adds value to the purchase. Discounts can range from 1% to 10% to encourage investors to buy more of the company’s stock.

More specifically, if someone wants to buy stocks in this way, they typically open an account and make deposits into it. Usually, these deposits are automatically made monthly through an ACH funds transfer from the investor’s bank account.

Then, that dollar amount is applied toward the DSPP, meaning toward purchasing shares in that company’s stock, which can include fractions of those shares. For example, let’s say that one share of a company’s stock currently costs $20. If an investor sets up an ACH withdrawal of $50 monthly, then, each month they have purchased 2.5 shares of that company’s stock. (The price of a share of stock can fluctuate, but this is how the process works, overall.)

One of the benefits of investing through a direct stock purchase plan is the ability to incrementally invest in an inexpensive way. This might make it a good choice for some first-time investors with smaller amounts of money to invest, with initial deposits ranging from $100 to $500, usually with very low fees to purchase shares or, sometimes, no fees.

This investment strategy can also work for people who want to focus on a select number of quality stocks, long term. It might be a good strategy for people who simply want to have a direct method of ownership, without an intermediary—and some investors appreciate the DSPP programs that allow dividends to be automatically reinvested into additional shares of stock (something that not all companies that offer DSPP programs do).

Conversely, this may not be the preferred method of choice for investors who value diversification, because buying DSPPs tends to create a portfolio based on a small group of stocks. Plus, not all companies offer this investment option, so focusing solely on DSPPs can limit choices.

Note that there may be restrictions placed upon when shares can be purchased. Companies often put maximum limits on how much an individual investor can purchase, too. One well-known home improvement store, as just one example, puts an annual cap of $250,000 on their DSPP program. And, when selling DSPP stocks, multiple types of fees can be charged that can significantly impact gains made.

Finding DSPP Opportunities

Armed with information about how to buy directly from companies, at least in general, investors may want to explore what specific opportunities exist. Perhaps they follow the stock market and already have a publicly traded company in mind.

In that case, they can go to that company’s investor relations website to see if that company offers this type of investment opportunity. They can also search on Google to see if DSPP information is available.

If investors decide to buy through a direct stock purchase plan, they can use a service like . It provides a listing of companies that sell stocks through a DSPP—these searches can be filtered in several ways to find the opportunities that fit investor parameters.

What to Consider Before Buying DSPPs

When internet investing was new, people typically needed to pay significant fees to brokers to buy stock—so, in that era, DSPPs could be real money-savers for investors. Over time, though, fees for online investing have lessened, making this less distinctive of a benefit.

Plus, many DSPPs charge initial setup fees, and may have other fees, including ones for each purchase transaction or sale. Although they may be small, in and of themselves, these fees can build up over time. And it may be challenging to re-sell shares without the use of a broker, which makes this investment strategy more of a long-term one, rather than one where investors regularly buy and sell.

Not everybody has the same type of investment personality—what’s important is for each investor to be clear about what type they are and act in tandem with that.

What Kind of Investor?

When people are relatively new to investing, they may not know the answer to that question yet—and that’s okay. As part of the process, though, investors will want to determine, at a minimum, their risk tolerance—in other words, the amount of risk a person is willing to take with investment dollars.

People who are risk takers might be what’s called a growth investor. This type of person might be willing to invest in high-priced stocks that have plenty of potential, even if they’d never heard of them before. More conservative investors can be called “income investors,” people who like to invest in stable, “blue chip” companies that are well established.

It isn’t unusual for younger investors to be more willing to go for growth, with older people going the more conservative route. This isn’t universally true, though, and it’s okay to experiment with investment strategies.

Buying That First Share of Stock

People with a retirement plan are probably already investing in mutual funds. When thinking about buying stock outside of retirement account investing, then it can make sense to complete a couple other financial items first, including:

•   Getting rid of high-interest debt
•   Building an emergency savings of three to six months’ worth of salary to cover unexpected expenses

Now, here’s what it means when someone buys a share of stock. Investors are really buying a piece of a company, becoming a partial owner of that company.

Then, when that company does well, investors can be rewarded by having shares of stock increase in value and/or receiving dividends. If the company doesn’t do well, then that can be reflected in a lesser stock value.

There are two main types of shares: common stock and preferred stock. Generally, when people talk about buying and selling shares of stock, they’re referring to common stock that comes with voting rights. Ideally, investors would like for the stock owned to increase in value, which would give them the option to sell their shares at a profit.

And, if the company is doing well, they may issue dividends, perhaps on a quarterly basis. Investors could use that as an income stream or reinvest those dollars into more shares of that company’s stock.

If a company goes bankrupt, common stockholders are placed behind creditors and another type of stockholders in line—preferred stockholders—in getting payment (which means common stock investors very well might lose all of what they’d invested in that company).

Owners of preferred stock, meanwhile, would get preferential treatment if a company was liquidated, being next in line behind creditors. Owners of this type of stock may or may not have voting rights but could benefit more fully when the company is profitable.

Nowadays, nearly all stock trading is handled online, which has made the process less expensive and more hands-on for the typical investor—at least compared to the days when people needed to walk into a stockbroker’s office to place an order.

Today, they simply need to open up an account with an online brokerage firm and then they can typically handle transactions from their computers or mobile devices. This, of course, raises the question about where a brokerage account should be opened. New investors can compare fees, as one step, while noting that it might be worth it to pay a bit more if the service is good.

When it’s time to actually buy that first share of stock, the decision may be made to invest in a company that is already familiar to the investor—and then invest a small amount as a trial.

Any time a share of stock is purchased, at any company, some degree of risk comes along with it—how much depends upon what is happening with that specific company and the overall levels of turbulence in the market.
Here’s something else to consider: When owning stock in just one company, or only a couple of them, portfolios aren’t diversified.

Portfolio diversification is desirable because it helps to spread out the degree of risk—that’s because, if one stock’s value decreases, others may rise to balance out that portfolio. Some investors, for example, have a portfolio with 40 to 50 different stocks to provide diversification.

Researching Investment Opportunities

Before investing in a company, it makes sense to research how well they’ve been performing. How profitable have they been? How do they compare against their competitors?

Most companies must provide information about their financial performance and major corporate changes; this information can be found on a company’s website in the Investor Relations section or at the Securities and Exchange Commission site.

Before investing, it can make sense to look at a company’s quarterly and annual balance sheets, as well as their income statements and cash flow statements. Another strategy is to review their retained earnings statement and shareholders’ equity information.

When reviewing a company’s financial information, check its after-take income—or what’s often called their “bottom line.” This is the number that’s most watched by a typical investor because it’s often directly related to the price of that company’s stock.

This information can be found in quarterly and annual financial statements and, besides looking at how good current earnings are, it can make sense to check the statements to see how consistent earnings have been.

Another idea is to review return on sales, also called operating margins. This will show investors how much a company makes in profit after paying associated costs, not including interest or taxes. To calculate this metric, find the company’s operating profit and then divide it by its net sales. A good (higher) number is a positive sign while a lower number may indicate more risk for investors.

As another strategy, check the cash flow statements—cash flow has been described as the life’s blood of a company’s financial position. Then there’s a calculation known as asset utilization, and it helps people to know how well a particular company is doing when compared to other ones.

If someone is considering investing in Company A, for example, and that company has revenues of $200,000 and assets of $100,000, its asset utilization rate is 2:1. In other words, for every dollar they have in assets, they have $2 being generated in revenue. How does that compare to Company B? Company C?

Investors sometimes also review a company’s debt-to-equity ratio (also called debt-to-capital ratio) to determine how a particular company funds its business operations and pays for its assets. Ideally, a company will have enough short-term liquidity to pay for business operations as well as its growth. This figure does not take into account any long-term debt held by the company.

Are its earnings going up, overall? Are there noticeable patterns—perhaps lower earnings in the winter for outdoor entertainment corporations? When lower earnings exist, does it fit the seasonal pattern observed—or is something else potentially going on?

Besides doing investigative work, investors might want to read financial news, with reputable sources including The Wall Street Journal, Bloomberg, MarketWatch, and CNBC, among others.

Investors can browse through them to see how the market is doing, overall, as well as how individual sectors are performing. If interested in specific companies, they can read about their performances.

Considering Exchange-Traded Funds and Mutual Funds

If someone is new to investing, choosing exchange-traded funds (ETFs) and mutual funds may be a good introduction to the investing world. These types of investment vehicles can offer more diversity, which can help to mitigate risk. One way to think of ETFs is as a basket of securities that gives investors access to a broad variety of markets.

Mutual funds, meanwhile, also provide opportunities for people who want to get started investing with small amounts of money. Because mutual funds are like suitcases filled with different security types, they provide instant diversification.

SoFi Invest

When it’s time to start investing online, that’s also the time when people need to choose their broker.
With SoFi Invest®️, people can invest with ease, no matter what level of investment experience exists.

One option is the active investing route, choosing stocks, ETFs, and cryptocurrency, getting started with as little as $1 and avoiding the high costs associated with some other methods of investing. And, at SoFi, stocks and ETFs can be traded for free.

Because diversity is so important, SoFi makes it easy for investors to spread their money out over different investment vehicles, including Stock Bits, which allows people to invest in their favorite companies without needing to commit to a whole share.

Or, if investing sounds like a good idea but the heavy lifting involved doesn’t, there is the automated investing option.

Recommendations are made through sophisticated computer algorithms and help with goal-setting, rebalancing of portfolios, and diversification. Best of all, when choosing automated investing at SoFi, investors can still have access to human financial advisors.

SoFi Invest allows you to invest your way, all in one place.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.


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