What Does Buying the Dip Mean?

What Does Buying the Dip Mean?

A down stock market could create an opportunity for investors to buy the dip. In simple terms, this strategy involves making an investment when stock prices are low.

This is a way to capitalize on bargain pricing and potentially benefit from price increases down the line. But like any other investing strategy, buying the dip involves some risk—as it’s often a matter of market timing.

Knowing when to buy the dip (or when not to) matters for building a solid portfolio while managing risk.

What Does It Mean to Buy the Dip?

To buy the dip is to invest when the stock market is down with the potential to go back up. A dip occurs when stock prices drop below where they’ve normally been trading, but there’s an indication that they’ll begin to rise again at some point. This second part is crucial; if there’s no expectation that the stock’s price will bounce back down the line then there’s little incentive to buy in.

Why Do Stock Dips Happen?

Stock market dips can happen for various reasons, including a macroeconomic downturn, unexpected geopolitical events, or general stock market volatility that causes stock prices to tumble temporarily on a broad scale.

For example, in early 2022, the stock market fell from all-time highs due to several developments, like high inflation, tighter monetary policy, and the economic fallout from the Russian invasion of Ukraine. The S&P 500 Index fell nearly 20% from early Jan. 2022 through May 19, 2022, flirting with bear market territory.

Stock pricing dips can also be connected directly to a particular company rather than overall market trends. If a company announces a merger or posts a quarterly earnings report that falls below expectations, those could trigger a short-term drop in its share price.

What’s the Benefit of Buying the Dip?

If you’re wondering, “why buy the dip?” or “should I buy the dip?” it helps to understand the upsides of this strategy.

Buying the dip is a way to cash in on the “buy low, sell high” mantra that’s so often repeated in investment circles. When you buy into a stock below its normal price, there is a potential – but not a guarantee – to reap significant profits by selling it later if prices rebound.

Example of Buying the Dip

One recent example of a dip and rebound would be the lows the market experienced in the spring of 2020 connected to economic fears surrounding the coronavirus pandemic. The S&P 500 Index declined about 34% in a little over a month, from Feb. 19, 2020, to Mar. 23, 2020. The index then experienced a gradual rise, recouping its losses by Aug. 2020 and increasing 114% through Jan. 2022 from the Mar. 2020 low. If an investor bought at the lower end of the stock market crash, they would have seen substantial gains in the subsequent rally.

On an individual stock level, say you’ve been tracking a stock that’s been trading at $50 a share. Then the company’s CEO abruptly announces they’re resigning—which sends the stock price tumbling to $30 per share as overall investor confidence wavers. So you decide to buy 100 shares at the $30 price.

Six months later, a new CEO has been installed who’s managed to slash costs while boosting profits. Now that same stock is trading at $70 per share. Because you bought the dip when prices were low, you now stand to pick up a profit of $40 per share if you sell. The potential to earn big gains is what makes buying the dip a popular investment strategy for some people.

Risks of Buying the Dip

For any investor, it’s important to understand what kind of risk you’re taking when buying the dip. Timing the market is something even the most advanced investors may struggle with—as it’s impossible to perfectly predict which way stocks will move on any given day. Understanding technical indicators and what they can tell you about the market may help, but it isn’t foolproof.

For these reasons, knowing when to buy the dip is an inexact science. If you buy into a stock low and then are able to sell it high later, then your play has paid off. On the other hand, you could lose money if you mistime the dip or you mistake a stock that’s in freefall for one that’s experiencing a dip.

In the former scenario, it’s possible that a stock’s price could drop even further before it starts to rebound. If you buy in before the dip hits bottom, that can shrink the amount of profits you’re able to realize when you sell.

In the latter case, you may think a stock has the potential to recover but be disappointed when it doesn’t. You’ve purchased the stock at a bargain but the profit you’re able to walk away with, if anything, may be much smaller than you anticipated.

How to Manage Risk When Buying the Dip

For investors who are interested in buying the dip, there are a few things to keep in mind that may help with managing risk.

Understand Market Volatility

First, it’s important to understand how market volatility may impact some sectors or industries over others.

For example, take consumer staples versus consumer discretionary. Staples represent the things most people spend money on to maintain a basic standard of living, like food or personal hygiene products. Consumer discretionary refers to the “wants” people spend money on, like furniture or electronics.

💡 Recommended: How to Handle Stock Market Volatility

In the midst of a recession, people spend more on staples than discretionary expenses—so consumer staples stocks tend to fare better. But that may create a buying opportunity for discretionary stocks if they’ve taken a hit. That’s because as a recession begins to give way to a new cycle of economic growth, those stocks may start to pick back up again.

Consider the Reason for the Dip

Next, consider the reasons behind a dip and a company’s fundamentals. If you’ve got your eye on a particular stock and you notice the price is beginning to slide, ask yourself why that may be happening. When it’s specific to the company, rather than something general happening across the market, it’s important to analyze the stock and try to understand the underlying reasons for the dip—as well as how likely the stock’s price is to make a comeback later.

Buy the Dip vs Dollar-Cost Averaging

Buying the dip is more of a hands-on trading strategy, since it requires an investor to actively monitor the markets and read stock charts to evaluate when to buy the dip or when to sell. If an investor prefers to take a more passive approach or has a lower tolerance for risk, they might consider dollar-cost averaging instead.

Dollar-cost averaging is generally an investing rule worth keeping in mind. With dollar-cost averaging, an individual continues making new investments on a regular basis, regardless of what’s happening with stock prices. The idea here is that by investing consistently over time, one can generate returns in a way that smooths out the ups and downs of the market.

Example of Dollar-Cost Averaging

For example, you might invest $200 every month into an index mutual fund that tracks the performance of the S&P 500. As time goes by and the S&P experiences good years and bad years, you keep investing that same $200 a month into the fund.

💡 Recommended: What Is Dollar Cost Averaging?

You’ll buy shares during the dips and during the high points as well but you don’t have to actively track what’s happening with stock prices. This may be a preferable strategy if you lean toward a buy and hold investing approach versus active trading or you’re a investing beginner learning the basics.

The Takeaway

Knowing when to buy the dip can be tricky – timing the market usually is – but there are times when it may pay off for some. If investors maintain an eye on stock market and economic trends, it may help in determining when to buy the dip and how likely a stock or the market will rebound. However, it’s still important to consider the downside risks of timing the market and buying the dip.

If you’re ready to start investing and take advantage of buying the dip, the SoFi app can help. With the SoFi Invest® online brokerage, you can trade stocks and exchange-traded (ETFs) with as little as $5.

Find out how to get started with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
SOIN21121

Read more
How Midterm Elections Can Influence the Stock Market

How Midterm Elections Can Influence the Stock Market

As the country gears up for midterm elections, many investors are wondering how the results could affect the stock market. Midterm elections can introduce uncertainty and turmoil to the stock market. A change in power in Congress could lead to policy and regulatory changes that could impact the economy and corporate profits. As such, investors will be watching to see which party wins control of Congress and the implications for the stock market.

Historically, the stock market has underperformed leading up to midterm elections and bounced back in the year following the elections. Many investors use this historical precedent to predict how midterms will affect the stock market in the future. However, past performance is not indicative of future results. The midterm elections may be less important on the stock market than other economic factors, like high interest rates, inflation, and rising energy costs.

What are the Midterm Elections?

As the name suggests, midterm elections occur in the middle of a presidential term. Midterm elections are when voters elect every member of the House of Representatives and about one-third of the members of the Senate. The results of the midterm elections determine which political party controls the House and Senate, which could determine the future of economic policy that may affect the stock market.

History of Midterm Elections Results

Historically, the president’s party loses ground in Congress during the midterm elections. Of the 22 midterm elections since 1934, the president’s party has lost an average of 28 seats in the House of Representatives and four in the Senate. The president’s party gained seats in both the House and the Senate only twice over this period.

The flip in power during the midterm elections occurs, in part, because the president’s approval rating usually declines during the first two years in office, which can influence voters to vote against the party in power or not show up to the polls. Additionally, voters of the party not in control are often more motivated to vote during these elections, boosting voter turnout that can help the opposition party outperform the president’s party.

Stock Market Performance During Year of Midterm Elections

Leading up to the midterm elections, the stock market tends to underperform. According to U.S. Bank, since 1962, the average annual return of the S&P 500 Index in the 12 months before midterm elections is 0.3%. In contrast, the historical average return of the S&P 500 is an 8.1% gain.

This underperformance during the midterm year follows the Presidential Election Cycle Theory, which implies that the first two years of a president’s term tend to be the weakest for the stocks.

However, it’s unclear whether this downbeat performance and stock volatility in the year preceding the midterms is a function of investors’ views of potential election outcomes and subsequent policy changes.

Some analysts say that the underperformance occurs due to uncertainty about the election’s outcome and impact, and investors don’t like uncertainty. But others say that the more critical impact on the stock market is the state of the economy; factors like the Federal Reserve’s monetary policy, energy prices, inflation, and the state of the labor market are more important to the stock market.

💡 Recommended: How Do Interest Rates Impact Stocks?

Stock Market Performance Following Midterm Elections

Even though the stock market, as measured by the S&P 500, has historically underperformed leading up to the midterm elections, stocks have tended to overperform in the post-election environment. Since 1962, the 12 months after midterm elections, the S&P 500 has had an average return of 16.3%.

The gains in stocks following the midterm elections have occurred due to no single factor. One reason may be that investors prefer the certainty of knowing the makeup of the federal government and potential policy changes.

Moreover, some believe that because the president’s party typically loses ground in the midterm elections, it reduces the likelihood of policy changes that could have a negative impact on the economy. This, in turn, can provide a tailwind for stocks. The potential for gridlock, rather than sweeping policy and regulatory changes, is usually welcomed by investors.

How Could the 2022 Midterm Elections Affect the Stock Market?

It is difficult to say how the 2022 midterm elections might affect the stock market, as many factors can affect the market, and it is hard to predict the future. However, the most obvious way the midterm elections could impact the markets is that if one party or the other gains control of Congress, that could influence economic policy and the country’s direction. This could lead to tax policy, regulation, and spending changes that could impact businesses and the stock market.

Another potential impact of the midterm elections is that if there is a change in control of Congress, that could lead to more investigations and subpoenas of businesses and individuals, which could create uncertainty that investors and the markets may not like.

However, the impact of the 2022 midterm elections on the stock market may be muted, regardless of the outcome. Going into 2023, investors may be more concerned with the potential of a recession and declining corporate profits in the face of high inflation, rising energy prices, the Russia-Ukraine war, and a global economic slowdown. These factors may affect the stock market more than any political and policy outcome following the midterm elections.

💡 Recommended: SoFi’s Recession Guide and Help Center

The Takeaway

The history of midterm elections is one of cycles: the party in power typically loses ground during midterm elections, and the opposition party typically gains ground. And these cycles are also evident in the performance of the stock market, with muted stock gains in the year of a midterm election and substantial gains the year following the elections. But despite these historical trends, no one can say for sure how the midterm elections will impact the stock market. And investors shouldn’t necessarily rely on these trends when making investing decisions. Instead, investors should maintain a long-term view to reach financial goals, avoiding the short-term noise and uncertainty of elections and politics. Investors should continue to focus on asset allocation, risk tolerance, and the time horizon of a diversified portfolio to achieve financial goals.

And if you want to build your own diversified portfolio, SoFi Invest® can help. With a SoFi online brokerage account, you can trade stocks, exchange-traded funds (ETFs), cryptocurrencies, and IPOs with no commissions for as little as $5.

Take a step toward reaching your financial goals with SoFi Invest.


Photo credit: iStock/Drazen_

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
In our efforts to bring you the latest updates on things that might impact your financial life, we may occasionally enter the political fray, covering candidates, bills, laws and more. Please note: SoFi does not endorse or take official positions on any candidates and the bills they may be sponsoring or proposing. We may occasionally support legislation that we believe would be beneficial to our members, and will make sure to call it out when we do. Our reporting otherwise is for informational purposes only, and shouldn’t be construed as an endorsement.
SOIN1022024

Read more
financial chart recession bar graph

What Is a Recession?

Generally speaking, a recession is a period of economic contraction. Recessions are typically accompanied by falling stock markets, a rise in unemployment, a drop in income and consumer spending, and increased business failures.

Recessions tend to have a wide-ranging economic impact, affecting businesses, jobs, everyday individuals, and investment returns. But what are recessions exactly, and what long-term repercussions do they tend to have on personal financial situations? Here’s a deeper dive into these economic contractions.

Different Recession Definitions

A recession is usually defined as a drop in gross domestic product (GDP) — which represents the total value of goods and services produced in the country — for at least two quarters in a row. However, this is not an official definition of a recession, just a shorthand that many economists and investors use when analyzing the economy.

Moreover, consumers and workers may believe that the economy is in a recession when unemployment or inflation rises, even though economic output may still be growing.

Recessions are officially defined and declared by the Business Cycle Dating Committee at the National Bureau of Economic Research (NBER).

💡 Recommended: Recession Survival Guide and Help Center

NBER’s Definition

The NBER defines a recession as a significant and widespread decline in economic activity that lasts a few months. The economists at the NBER use a wide range of economic indicators to determine the peaks and troughs of economic activity. The NBER chooses to define a recession in terms of monthly indicators, including:

•   Employment. Job growth or job loss can be used to gauge the likelihood of a recession and serve as a litmus test of sorts for which way the economy is moving.

•   Personal income. Personal income can play a direct role in influencing recessionary environments. When consumers have more personal income to spend, that can fuel a growing economy. But when personal income declines or purchasing power declines because of rising interest rates, that can be a recession indicator.

•   Industrial production. Industrial production is a measure of manufacturing activity. If manufacturing begins to slow down, that could suggest slumping demand in the economy and, in turn, a shrinking economy.

These indicators are then viewed against the backdrop of quarterly gross domestic product growth to determine if a recession is in progress. Therefore, the NBER doesn’t follow the commonly accepted rule of two consecutive quarters of negative GDP growth, as that alone isn’t considered a reliable indicator of recessionary movements in the economy.

Additionally, the NBER is a backward-looking organization, declaring a recession after one has already begun and announcing the trough of economic activity after it has already bottomed.

Julius Shiskin Definition

The shorthand of using two negative quarters of GDP growth can be traced back to a definition of a recession that first originated in the 1970s with Julius Shiskin, once commissioner of the Bureau of Labor Statistics. Shiskin defined recession as meaning:

•   Two consecutive quarters of negative gross national product (GNP) growth

•   1.5% decline in real GNP

•   15% decline in non-farm payroll employment

•   Unemployment reaching at least 6%

•   Six months or more of job losses in more than 75% of industries

•   Six months or more of decline in industrial production

It’s important to note that Shiskin’s recession definition used GNP, whereas modern definitions of recession use GDP instead. GNP, or gross national product, measures the value of goods and services produced by a country both domestically and internationally. Gross domestic product only measures the value of goods and services produced within the country itself.

How Often Do Recessions Occur?

Economic recessions are a normal part of the business cycle. According to the NBER, the U.S. experienced 33 recessions prior to the coronavirus pandemic. The first documented recession occurred in 1857, and the last was the Covid-19 recession, which started in February 2020 and ended in April 2020.

Since World War II, a recession has occurred, on average, every six years, though the actual timing can and has varied.

U.S. Recessions Since World War II

Start of Recession

End of Recession

Number of Months

November 1948 October 1949 11
July 1953 May 1954 10
August 1957 April 1958 8
April 1960 February 1961 10
December 1969 November 1970 11
November 1973 March 1975 16
January 1980 July 1980 6
July 1981 November 1982 16
July 1990 March 1991 8
March 2001 November 2001 8
December 2007 June 2009 18
February 2020 April 2020 2
Source: NBER

How Long Do Recessions Last?

According to the NBER, the shortest recession occurred following the Covid-19-related shutdowns and lasted two months, while the longest went from 1873 to 1879, lasting 65 months. The Great Recession lasted 18 months between December 2007 and June 2009 and was the longest recession since World War II.

If you consider the other 12 recessions following World War II, they have lasted, on average, about ten months.

Periods of economic expansion tend to last longer than periods of recession. From 1945 to 2020, the average expansion lasted 64 months, while the average recession lasted ten months.

The most recent expansion, i.e., the one that occurred after the Great Recession between 2009 and the beginning of 2020, lasted 128 months.

Between the 1850s and World War II, economic expansions lasted an average of 26 months, while recessions lasted an average of 21 months.

The Great Recession between 2007 and 2009 was the most severe economic drawdown since the Great Depression of the 1930s. This recession was considered particularly damaging due to its duration, unemployment levels that peaked at around 10%, and the widespread impact on the housing market.

6 Common Causes of Recessions

The causes of recessions can vary greatly. Generally speaking, recessions happen when something causes a loss of confidence among businesses and consumers. The recession that occurred in 2020 could be considered an outlier, as it was mainly sparked by an external global health event rather than internal economic causes.

The mechanics behind a typical recession work like this: consumers lose confidence and stop spending, driving down demand for goods and services. As a result, the economy shifts from growth to contraction. This can, in turn, lead to job losses, a slowdown in borrowing, and a continued decline in consumer spending.

Here are some common characteristics of recessions:

1. High Interest Rates

High interest rates make borrowing money more expensive, limiting the amount of money available to spend and invest. In the past, the Federal Reserve has raised interest rates to protect the value of the dollar or prevent the economy from overheating, which has, at times, resulted in a recession.

For example, the 1970s saw a period of stagnant growth and inflation that came to be known as “stagflation.” To fight it, the Fed raised interest rates throughout the decade, which created the recessions between 1980 and 1982.

2. Falling Housing Prices

If housing demand falls, so does the value of people’s homes. Homeowners may no longer be able to tap their house’s equity. As a result, homeowners may have less money in their pockets to spend, reducing consumption in the economy.

3. Stock Market Crash

A stock market crash occurs when a stock market index drops severely. If it falls by at least 20%, it enters what is known as a “bear market.” Stock market crashes can result in a recession since individual investors’ net worth declines, causing them to reduce spending because of a negative wealth effect. It can also cut into confidence among businesses, causing them to spend and hire less.

As stock prices drop, businesses may also face less access to capital and may produce less. They may have to lay off workers, whose ability to spend is curtailed. As this pattern continues, the economy may contract into recession.

4. Reduction in Real Wages

Real wages describe how much income an individual makes when adjusted for inflation. In other words, it represents how far consumer income can go in terms of the goods and services it can purchase.

When real wages shrink, a recession can begin. Consumers can lose confidence when they realize their income isn’t keeping up with inflation, leading to less spending and economic slowdown.

5. Bursting Bubbles

Asset bubbles are to blame for some of the most significant recessions in U.S. history, including the stock market bubble in the 1920s, the tech bubble in the 1990s, and the housing bubble in the 2000s.

An asset bubble occurs when the price of an asset, such as stock, bonds, commodities, and real estate, quickly rises without actual value in the asset to justify the rise.

As prices rise, new investors jump in, hoping to take advantage of the rapidly growing market. Yet, when the bubble bursts — for example, if demand runs out — the market can collapse, eventually leading to recession.

6. Deflation

Deflation is a widespread drop in prices, which an oversupply of goods and services can cause. This oversupply can result in consumers and businesses saving money rather than spending it. This is because consumers and businesses would rather wait to purchase goods and services that may be lower in price in the future. As demand falls and people spend less, a recession can follow due to the contraction in consumption and economic activity.

How Do Recessions Affect You?

Businesses may have fewer customers when the economy begins to slow down because consumers have less real income to spend. So they institute layoffs as a cost-cutting measure, which means unemployment rates rise.

As more people lose their jobs, they have less to spend on discretionary items, which means fewer sales and lower revenue for businesses. Individuals who can keep their jobs may choose to save their money rather than spend it, leading to less revenue for businesses.

Investors may see the value of their portfolios shrink if a recession triggers stock market volatility. Homeowners may also see a decline in their home’s equity if home values drop because of a recession.

When consumer spending declines, corporate earnings start to shrink. If a business doesn’t have enough resources to weather the storm, it may have to file for bankruptcy.

💡 Recommended: How to Invest During a Recession

Governments and central banks will often do what they can to head off recession through monetary or fiscal stimulus to boost employment and spending.

Central banks, like the Federal Reserve, can provide monetary policy stimulus. The Fed can lower interest rates, which reduces the cost of borrowing. As more people borrow, there’s more money in circulation and more incentive to spend and invest.

Fiscal stimulus can come from tax breaks or incentives that increase outputs and incomes in the short term. Governments may put together stimulus packages to boost economic growth.

For example, stock market volatility increased wildly amid fears of the coronavirus pandemic and its economic fallout. To ward off recession, the U.S. government put together trillions in Covid-19 stimulus packages that included direct payments to citizens, suspended student loan payments, a boost to unemployment benefits, and a lending program for businesses and state and local governments.

💡 Recommended: 5 Common Recession Fears and How to Cope

Recessions vs Depressions and Bear Markets

Recessions vs Depressions

When a recession occurs, it could stir up uneasy feelings that perhaps the economy will enter a depression. However, there are significant differences between recessions and depression. While recessions are a normal part of the business cycle that last less than a year, depressions are a severe decline in economic output that can last for years. Consider that the Great Recession lasted 18 months, while the Great Depression lasted about ten years, beginning in 1929.

The Great Depression is the most recent example of a depression in the U.S. From 1929 through 1933, as many as 25% of Americans were unemployed, and real GDP declined by 29%. In contrast, the unemployment rate peaked at 10%, and real GDP fell by 4% during the Great Recession.

Recessions vs Bear Markets

A recession is also different from a bear market, even though many think the two events go hand-in-hand.

A bear market begins when the stock market drops 20% from its recent high. If you look at the benchmark S&P 500 index, there have been 13 bear markets since 1945.

Yet, not all bear markets result in recession. During 1987’s infamous Black Monday stock market crash, the S&P 500 lost 34%, and the resulting bear market lasted four months. However, the economy did not dissolve into recession.

That’s happened three other times since 1947. Bear markets have lasted 14 months on average since World War II, and the most significant decline since then was the bear market of 2007–2009.

The first thing to understand is that the stock market is not the same as the economy, though they are related. Investors react to changes in economic conditions because what’s happening in the economy can affect the companies in which investors own stock.

So, if investors think the economy is growing, they may be more willing to put money in the stock market. They will likely pull money out of the stock market if they believe it is contracting. These reactions can function as a sort of prediction of recession.

💡 Recommended: Bear Market Investing Strategies

Is It Possible to Predict a Recession?

Economists and investors try to predict recession, but it’s difficult to do, and they often end up wrong. Economists usually frame the possibility of a recession as a probability. For example, they may say there’s a 35% chance of a recession in the next year.

There are several methods economists use to try to predict recessions. Some of the most common include analyzing economic indicators, such as employment and inflation, as well as consumer and business confidence surveys. Economists build models with these economic indicators as inputs, hoping the data will help them determine the path of economic growth. While these methods can indicate whether a recession might be on the horizon, they are far from perfect.

One issue in predicting a recession is that a lot of data analysts use to forecast the economy are backward looking indicators. These data, like the unemployment rate or GDP, present a picture of the economy as it was a month or more prior. Using this data to paint a picture of the present economy becomes difficult and adds to the complexity of predicting a recession.

However, many analysts believe the yield curve is the best indicator to help predict a recession. When the yield curve inverts, meaning that the interest rate on short-term Treasuries is higher than on long-term Treasuries, it is a warning sign that the economy is heading to a recession. An inverted yield curve has occurred before all 10 U.S. recessions since 1955.

Is the US Heading Into a Recession?

There are debates about whether the U.S. is heading into a recession in 2022 or 2023 due to several factors.

The U.S. economy has been in a precarious situation during 2022. Inflation has been running hot due to supply chain issues related to the economic fallout of Covid-19 and fiscal and monetary policy stimulus. The Federal Reserve started raising interest rates at a historic pace to combat the rising prices. The Fed began an attempt to curb inflation with the hope of a soft landing, in which an economy slows enough that prices stop rising quickly but not so slowly that it sparks a recession.

These factors made the chance of a recession more of a reality. Economic growth, as measured by GDP, declined in the first half of 2022. Because of this, some economists and analysts believe that the economy entered a recession because of the shorthand definition of two straight quarters of negative GDP growth.

However, other commentators note that the unemployment rate was 3.5% as of September 2022, the lowest in 50 years, and hiring was still robust. The strong labor market suggested that the economy couldn’t be in a recession. Economic indicators like industrial production and consumer spending are also growing, showing a potentially resilient economy.

Nonetheless, the U.S. economy faces several headwinds due to inflation, rising energy prices, and a global economic slowdown. So even if the economy is not in a recession as of October 2022, it could still be heading into one in the coming months.

The Takeaway

The possibility of a recession can be unsettling, causing you to think of economic hardships and spark fears of personal financial troubles. However, recessions are a regular part of the business cycle, so you should be prepared for one if and when it comes. When it comes to investing, this means building and maintaining a portfolio to meet long-term goals. The resulting portfolio likely holds a balanced mix of assets that accounts for an investor’s time horizon and risk tolerance.

The key to riding out a recession is for investors to stick to their long-term plans, only rebalancing when it will help them reach their long-term goals. With a SoFi online brokerage account, you can start building a portfolio that meets your long-term financial needs. You can trade stocks, ETFs, cryptocurrency, and IPOs with no commissions for as little as $5.

Take a step toward reaching your financial goals with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
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.
SOIN1022005

Read more
father and son on laptops

How Much Money Should Be in Your Emergency Fund?

Having an emergency fund is a good safety net if you get hit with an unexpected car repair bill or get laid off. You know you’ll have cash available. But how much should you actually have in the bank? Most experts recommend that you have at least three to six months’ worth of living expenses, but that can vary on factors like your age, your health, how many dependents you have, and your cost of living.

An emergency fund is one of the best ways to make sure you’re not relying on credit cards to make ends meet if a worst-case situation were to crop up. Just knowing it’s there might even help you sleep better at night. To help you determine how much you need in the bank, read on. You’ll learn about how to tuck away the right amount, and answer such questions as:

•   What is an emergency fund?

•   What is the issue with not having an emergency fund?

•   How can I start saving for an emergency fund?

•   How much should an emergency fund be?

•   What are the factors that influence how much I should have in an emergency fund?

•   How can I build my emergency fund?

What Is an Emergency Fund?

An emergency fund is money set aside in case an urgent and unexpected expense comes your way. This could be a medical or dental bill, a car repair, or travel to visit a family member who is ill or injured. The money can also be used in situations where a person is laid off or their hours are reduced and they don’t have enough cash to make ends meet.

Financial experts typically recommend that people prioritize saving an emergency fund and have at least three to six months’ worth of basic living expenses covered. In some cases, you may want to stash away more.

Also worth noting: An emergency fund needs to be liquid and accessible. When an emergency strikes, you want to be able to access your money quickly, without penalties for making a withdrawal. This is why a high-yield savings account can be a good choice. Your money will earn some interest and be available when you need it, unlike, say, a certificate of deposit (CD), which ties up your money for a period of time.

Also, an emergency fund should be in an account that is insured by either the Federal Deposit Insurance Corporation (FDIC) or NCUA, the National Credit Union Administration. Due to its volatility, the market is not a good place for an emergency fund.

How Much Should You Have in an Emergency Fund?

As briefly mentioned above, most experts recommend that you have at least three to six months’ worth of basic living expenses in the bank. This means that if you were, say, injured and unable to work or is you lost your job, you could keep going for a few or several months.

So let’s say you typically spend $4,000 a month on housing, food, utilities, and debt payments. In that case, the answer to “Is $20,000 enough for an emergency fund?” would be yes. That sum would see you through five months if you needed it.

However, if your monthly living expenses are $10,000, then $20,000 would only last two months. Instead, $30,000 would be enough for an emergency fund in your situation. Some experts would say even more, up to $60,000, would be a better figure.

This amount can seem daunting, but remember, you aren’t expected to have it set aside in one lump sum. You will save up to reach this goal. And you are not alone in needed time to build an emergency fund. Barely half of Americans surveyed could pay an unexpected bill of $1,000 (you’ll learn more on that in a moment).

Also know that if, due to other expenses or life circumstances, you can’t accumulate that amount in savings, something (anything) is better than nothing. Don’t feel defeated and not save at all. If you can put away $1,000 over the course of a year, do it.

How to Calculate Your Emergency Fund Amount

If you’re convinced of the value of an emergency fund, it’s time to drill down on just how much to save. Figuring out how much money should be in your emergency fund is a fundamental step in building your financial plan for the future. Here are some ways to calculate your goal and achieve it:

•   Conventional wisdom says you should have between three months and six months’ worth of living expenses set aside for an emergency. To calculate your expenses, you might create a line-item budget. It will also give you a clearer view of how much money you have coming in and going out. Once you’ve determined what your take-home pay is, calculate all your monthly necessary expenses including rent or a mortgage, insurance, healthcare, utilities, phone, car, etc. And of course, factor in student loan or credit card debt.

   After you tally all your expenses, deduct that amount from your take-home pay and then see what is left. This is where you’ll need to figure out how much you can realistically set aside each week or pay period for your emergency fund. Aim to accrue your goal amount in a year, if possible.

   Let’s say you’re a recent grad whose minimum monthlies total $2,000. In this case, $10K is a good emergency fund. It could float you if it took you, say, five months to find a job.

•   Another method for saving is to look at your insurance deductibles for your medical, dental, household, and car policies. Although it’s no fun, imagine having some kind of accident that triggered your needing to pay a few or even all of those deductibles at once. This is especially daunting if you have a high deductible health plan (HDHP); if you need to cover that amount all of a sudden, you could wind up with debt. Make sure you have enough in the bank to cover that amount.

•   You might also see what unemployment would pay you per month if you were to lose your job. See how that compares to your living expenses, calculate the shortfall monthly, and work towards saving, say, six times that amount.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 3.75% APY on your cash!


Factors That Determine How Much to Save for an Emergency Fund

When considering how much an emergency fund should be, three to six months’ worth of living expenses is a good baseline. That said, there are certain situations that may require a bit more saving, as in at least six months’ worth and possibly a year’s worth. Also, when you are thinking “How much emergency savings should I have?” know that the figure will likely vary, person by person. Even if you have an identical twin, your goals will probably differ. Here are some factors to consider.

Health

If you or a member of your immediate family has a medical condition, you probably will want to save a bit more in your emergency fund. You might have additional doctors’ or lab expenses. The price of prescription drugs could increase. Or you could be dealing with a situation where your insurance doesn’t pay or takes a long time to do so. An emergency fund can be your lifeline.

Also, if you have a medical condition that could have you out of work for a period of time, your emergency fund could help you pay the bills.

Amount of Debt

If you have more than minimal debt in your life, it can be a good thing to have an extra cushion of money in your emergency fund. Let’s say you have student loan debt, car payments, a mortgage, and credit card debt, as many Americans do. An unexpected expense or loss of work could mean that all of those payments can’t be met. That can trigger considerably late charges, possibly non-sufficient funds or overdraft charges as well, and can also lower your credit score. Having money in the bank can keep you afloat in an emergency situation.

Cost of Living

It’s no secret that inflation has been extremely high lately. Many people’s raises at work don’t come close to offsetting the uptick they have seen in the price of groceries, gas, heating, and more. An emergency fund can help make ends meet if a big bill hits amidst this situation.

Also, if you live in an area with a high cost of living, you may be more vulnerable and need emergency funds. For instance, in major metropolitan areas, rents have recently seen a sizable uptick. A significant rent increase could mean it’s a challenge to afford your monthly bills until you recalibrate. An emergency fund could help if a huge rent hike comes your way.

Recommended: What Is Cost of Living?

Job Security

While there are no guarantees in life or in work, some jobs are more secure than others. If you have a very specialized skill set that would make it hard to quickly find another job should you need one, save a bit more. Also, if you are a freelance or seasonal worker, your income may be less predictable than those with salary jobs. You may want to make sure you have the higher end of the range for emergency funds.

Children or Dependents

If you have children or dependents, you know how important it is to keep all the plates spinning and pay for their needs. This level of responsibility means it would likely be wise to save extra. You are also more vulnerable to having emergency expenses if you have dependents as well: A child could have more medical or dental bills than you expected, or an elder could be sick and you might have to take unpaid leave to care for them.

Having Financial Support

Some of us have a support network that could lend us money or otherwise help out in case of an emergency. For others, there is no one in their immediate family or friends group that could provide a loan or gift if an urgent expense were to crop up. If you are more of the “all by myself” type in this regard, that’s another reason to add a bit more to an emergency fund.

Your Age

Typically, your saving goals vary by age, and so should the amount in your emergency fund. If you are retired or nearing retirement age, you probably should set aside more for an emergency fund. As you age, medical expenses tend to rise, and you might also be on a fixed income. These variables make having more money available a wise move.

The Issues With Not Having an Emergency Fund

When it comes to having an emergency fund, Americans struggle with what would appear to be a simple, commonsensical idea.

The average person does not put enough in an emergency fund. In fact, 56% of Americans said they could not cover an unexpected $1,000 emergency expense, according to a recent survey. That means they would likely have to either put the amount on their credit cards (which is a form of high-interest debt which can be hard to pay off), borrow, or sell something to cover the cost.

But you could be faced with a much more serious financial hardship than $1,000. Or you might endure a long-term stretch of unemployment or a medical misfortune that could have a nasty impact on your finances.

In circumstances like these, an inability to pay your bills could potentially damage your credit score and keep you in debt for years to come.

Tips for Building an Emergency Fund

If you’ve figured out how much emergency savings you should have (or at least a ballpark figure), it’s time to start saving! Here are some pointers to help you bulk up your account and know where to keep it.

•   Set up automatic deductions. Let’s say you have figured out how much per paycheck you can put into your emergency fund. Whether it’s $25 or $250 or more, know that any amount will get you on a path to meeting your goal and having peace of mind. If you have a linked savings account, set up payday automatic transfers so the cash is whisked into your rainy day fund. You don’t want it sitting in your checking account, tempting you to spend it.

•   If you don’t have a savings account you can use for your emergency fund, it’s likely a good idea to open one. A high-yield one can help you earn a bit of interest. Whether you choose an online vs. traditional bank is up to you, though online ones tend to offer higher interest rates. (Incidentally, some people keep their emergency fund as a mix of checking and savings accounts; the choice is yours, as long as that money is sitting in case it’s needed.)

•   Consider growing your savings by depositing windfall money in your emergency fund. Perhaps you’ll receive a tax refund, a bonus, a rebate, or other unexpected source of funds. It can go into your account.

•   If you are having a hard time finding room in your budget to enrich your emergency fund, see if you can challenge yourself to make temporary, rotating budget cuts (going to the movies one month, buying clothes the next). Then put the saved money into your account. Or take up a side hustle, and put your earnings into the emergency fund.

Recommended: How to Manage Your Money Better

The Takeaway

Having an emergency fund is an important element of your financial fitness. It’s a cushion of money socked away, to be used if you have unexpected, urgent bills or face a loss of income. The amount you should save will vary depending on a variety of personal factors, such as whether or not you have dependents and how easily you could find a new job if laid off. Whatever the amount you want to have in your emergency fund may be, it’s important to start saving, little by little, so you can enjoy the peace of mind that this account can bring.

Wondering where to start and grow your emergency fund? SoFi has a simple, accessible, and top-notch solution. If you open a bank account online for your emergency fund with us, with direct deposit you’ll earn a competitive APY and pay no account fees. That can help your money increase faster.

If you’re ready to start saving for your emergency fund, see how SoFi Checking and Savings can help.

FAQ

Can you have too much in an emergency fund?

It’s wise to have at least three to six months’ worth of basic living expenses in an emergency fund. Depending on your specific situation, you might even want twice that. However, since emergency funds are usually held in savings accounts, which don’t earn all that much interest, you might look elsewhere if you have more than that sum to invest and grow.

Do you need an emergency fund if you are rich?

Everyone needs an emergency fund. People who are rich may have bigger expenses and bills than those who have less money, so they definitely want funds accessible if an emergency were to strike. What’s more, a wealthy person may have their money in investments like real estate, meaning it’s not liquid nor easily tapped, which is all the more reason to have some cash in the bank.

Can you have financial freedom without an emergency fund?

For most people, having an emergency fund is part of financial freedom. When you know you have enough cash to manage a worst-case scenario, it takes away a layer of worry. Many financial experts recommend having at least three to six months’ worth of living expenses in the bank and available.


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® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 3.75% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 2.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 12/16/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
SOBK1022021

Read more

5 Common Recession Fears and How to Cope

The onset of the 2022 recession has affected many Americans, sparking fears about possible job loss, paying for basic necessities, and seeing their investments suffer. These worries are normal, and fortunately there are ways to cope in the short-term.

The first step is overcoming the fear itself. While it’s normal to be worried about a recession — how long it might last, how dire the consequences might be — the truth is that the financial world is cyclical. This recession will end, as others have ended, and a bull market will follow.

💡 Recommended: SoFi’s Recession Help Guide

5 Common Recession Fears

In many ways, the best mantra during a recession might be the saying: “Keep Calm and Carry On.” That’s because when it comes to making financial decisions, emotions are rarely your friend. As a vast and growing body of financial behavioral research suggests, when people make impulsive choices about money, things rarely turn out well.

1. What If This Recession Lasts for Many Years?

While it’s possible that a recession could last for a long time, it helps to have some historical context.

How long do recessions last? Since the end of World War II, there have been 11 recessionary periods — including the short, sharp decline in early 2020 sparked by the pandemic. While that one only lasted a couple of months, U.S. recessions have averaged about 11 months in duration, according to data from the National Bureau of Economic Research (NBER).

There have been outliers: Notably, the Great Recession of 2008 lasted for 18 months; and the Great Depression of the 1930s lasted about four years, although the repercussions extended that financial crisis until 1938.

That said, bull markets tend to last longer than bear markets. Equally important to remember is that every financial crisis has also informed new monetary policy and new fiscal tools that help protect consumers and investors.

2. What If Unemployment Soars?

It’s true that the potential for job loss is higher during a recession, when companies may be forced to lay off some of their workforce. While this is a common occurrence — as demand for goods lessens and output drops, companies typically need to cut expenses — there is a potential upside.

NBER data shows that unemployment numbers lag a bit; joblessness typically rises to its highest level at certain points during the recession, and recovers to prior levels after the recession has ended. This means that some workers may have a window of opportunity to either look for new jobs now, or shore up their savings (in case of a layoff).

Be open and flexible to changes in responsibility. Lower your expectations around raises and bonuses. Try to bring value to the company, by going above and beyond, or by learning a new skill.

Make connections with your coworkers and network with people in your industry. It might be helpful to spruce up your resume too. That way, should you be laid off you can hit the ground running.

Take advantage of the shift to the gig economy, e.g. becoming your own boss, and relying on various income streams rather than a single full-time job. Not only are part-time positions becoming more common, it’s possible that your employer may be open to a gig arrangement, rather than completely letting go of a qualified employee.

A common rule of thumb is to keep three to six months’ worth of income in an emergency fund.

3. What If You Lose Your Savings?

Emergency savings are important in any circumstances, as life is full of curveballs and unpredictable expenses. To that end, it’s smart to keep at least one month’s worth of expenses in a rainy day fund — three to six months is better, of course, but always have a cushion for life’s inevitable emergencies.

A recession, especially one where inflation is playing a big role as it is in 2022, can hit your savings hard. But it’s better to spend down your emergency fund than to panic and make financial moves you’ll later regret. At all costs, try to avoid the following:

•   Covering expenses with your credit card, and incurring debt that you have to pay off at high interest rates.

•   Taking out a home equity loan. While the interest rates may be lower on these loans, it’s still an additional monthly expense. And if your home value dips, you could put yourself in a precarious position when you need to sell.

•   Taking a loan from your 401(k). While borrowing from a 401(k) has its pros and cons, and a loan is usually better than taking an early withdrawal, there are still a number of risks. The biggest being: If you do get laid off, the entire loan could be due within a 12-month period.

In short: Build up your savings while you can, especially if you’re concerned about losing your job. And don’t be afraid to spend some or even all of that emergency money if things go south. That’s what the money is there for.

4. What If You Can’t Cover All Your Bills?

A recession can mean that money is tight, and that your bills may go up. If a job loss is looming, you may have real fears of being able to cover your expenses. Fortunately, one area where you have some control is how much money you spend.

The first step in lowering your expenses is to get to know them, especially the bills and subscriptions you pay automatically (or are on an auto-renewal system).

Take a look at your current spending habits by examining your bank statements (you can usually get a transaction history right on your phone). You don’t have to read through months of expenditures. What you spend in one month is probably similar to what you spend any other month (despite some seasonal differences).

As you examine what, where, and why you spend, note that some expenses are easier to control than others. Here are some common areas where it’s often possible to make cutbacks:

•   Food (eating out, snacks) and groceries are generally the biggest household expenses, after mortgage or rent — but they’re also easy to rein in.

•   Utilities (e.g. use less gas, oil, electricity).

•   Clothing and other “nice-to-haves” (limit spending to necessities).

•   Subscriptions (you’re likely paying for several streaming or music services you rarely use; it’s easy to forget what you signed up for a year ago).

•   Examine your insurances. Sometimes you can lower premiums by switching providers or calling and asking for a discount.

Once you trim your expenses, you may realize there are other ways you can cut back that aren’t on the above list — but not everyone has these options. You could change your commute to save money. You could take on a roommate who can split expenses.

5. What If Your Investments Lose Value?

It’s likely that your retirement account(s) and investment portfolio could lose value when the markets are down, or fluctuating. As discussed above, you don’t want to react strongly and pull your money out of the market impulsively. That’s when you lock in losses that can be hard to recover from.

If you have a financial advisor, or you’re thinking of working with one, you may want to discuss sooner rather than later how well-diversified your portfolio is. Diversification can help protect against volatility in some cases. But portfolio diversification is ideally something you do before a recession sets in.

A better approach during a recession is to stay the course. Continue to invest; continue to save for retirement. Rather than impulsively change your financial behavior, intentionally keep doing what you’ve always done. One way to do this is by using a robo advisor, which incorporates highly sophisticated technology that uses automation to help you stick to your own plan. You’ll likely find yourself in better shape when the recession ebbs and the markets rise once more.

The Takeaway

It’s natural to feel worried about the onset of a recession. Most people have fears about how long a recession could last and what the possible consequences could be in terms of their jobs, their bills, their long-term savings and even retirement.

That said, there are a number of ways to cope. While headlines may sound dire, the reality of a recession is that it may not last as long as you fear. Also, it can take some time for ordinary people to feel the impact. That can give you time to be proactive, including giving your job options (and spending habits) a careful review, beefing up your emergency savings, and reminding yourself to stay calm above all.

Making impulsive decisions — like cashing out your 401(k) or using your credit card to cover bills — may not be necessary, and will almost certainly leave you in worse shape.

Even though it feels counterintuitive, during a recession your best move is often to stay the course, which is easy when you open a robo advisor account with SoFi Invest. You can set investment goals, and SoFi’s highly regarded automated platform helps you establish a diversified portfolio with automatic rebalancing. There are no SoFi management fees, and you can get started with as little as $1.

See why SoFi is this year’s top-ranked robo advisor.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SOIN1022007

Read more
TLS 1.2 Encrypted
Equal Housing Lender