Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority.
For individual financial information, click here.
For Small Businesses, including the Paycheck Protection Program (PPP), click here.

9 Popular Investment Trends

April 24, 2020 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

9 Popular Investment Trends

Some investors choose an all-in approach, checking their portfolio daily. Others might be more comfortable with a set-it-and-forget-it approach. Regardless of approach, keeping tabs on the latest financial trends can be illuminating … and fun.

Investors can compare their gut feelings to the “experts,” and see how much influence the top influencers actually have.

More significantly, understanding why things go the way they do might help investors make future investing decisions—and perhaps help keep emotions in check when the markets wobble.

Of course, it helps to do some homework before taking any specific prediction or recommendation too seriously. Studies have shown that timing the market—which means predicting the market based on economic data and technical indicators—doesn’t work.

Consider looking at financial forecasting as the big picture and treat the trendspotters as guides, not gods. As with fashion, you might want to know what the pros predict the trends will be, but you don’t necessarily have to wear all those trends yourself.

With that in mind, here are nine investment trends that are getting noticed right now:

1. FinTech

Financial technology companies continue to innovate with digital tools such as online banking and investing, mobile money-tracking apps, crowdfunding, person-to-person payment platforms, and more—providing products and services that were once only available through traditional financial institutions.

Millennials, especially, embrace personalization and convenience, and you can expect to see startups and established companies working to fulfill their digital dreams.

How disruptive can it get? According to the ABA Banking Journal , new technologies and changing customer expectations are combining to accelerate a cashless trend, and more than 60% of Americans believe they’ll see the death of cash in their lifetime.

2. Robo-Investing:

Technology is also disrupting the financial advice industry, and algorithm-based advisory technology is gaining in popularity.

Offerings vary, but typically these self-guided, online investing services provide an automated portfolio based on personal preferences and goals.

As the money grows, the portfolio is automatically rebalanced, keeping asset allocation within a predetermined range.

Robo-adviser firms have witnessed triple-digit growth since 2013 , according to a team of analysts at Morgan Stanley, and assets under management are expected to keep growing. As data collection and artificial intelligence continue to improve, investors can expect to see a rise in personalization from investing platforms.

But don’t worry about scary cyborgs chasing off human advisers just yet. Some wealth management companies, including SoFi, still offer access to live professionals who can walk you through the investing process, discuss your goals and help with any portfolio tweaks you might want to make.

3. Fee Sensitivity

As technology reshapes the wealth management industry, the cost of investing is falling. Fees for mutual funds and exchange-traded funds have been going down for a while now, and, more recently, the price for advice has been dropping.

“Advice is being delivered at less than 1%,” Jay Shah, chief executive of Personal Capital, told The Wall Street Journal in August 2018 .

With the increase in online advisory services, clients who used to accept fees as the price of doing business are starting to question some of those costs. And, in particular, millennials are looking for fee transparency.

4. Women and Millennial Investors

The financial industry is starting to pay attention to the increasing numbers of women and younger earners in the workforce—and tech is offering a new entry point to those who may not have been drawn to investing in the markets in the past.

Why tech instead of an in-person visit? Less jargon, easier access, no hard sell, lower minimums and fees.

And for younger investors, who were raised with technology, it’s comfortable. There is likely to be an increase in products and services designed to appeal to these important demographics.

5. Socially Responsible Investing

With a new kind of investor comes a new way of investing. Socially responsible investing (also known as environmental, social, and governance investing) isn’t exactly new, but it is catching on with both investors and advisors, as consumers increasingly want to put their money where their values are—for example, a fund that focuses on women’s issues, a way of life, like veganism, or a fund that has faith-based requirements.

A 2018 study from Harvard University’s Kennedy School of Government found that socially responsible investing now accounts for $26 trillion, which is more than a quarter of all assets under professional management worldwide.

Advisors may tell their clients to avoid emotion when investing, but there’s also this to consider: For those who tend to feel apathetic about saving for the future, ethically-minded investing might be the motivation they need to get going.

And, of course, there are apps for that, including Goods Unite Us , which provides information on the political donations made by various companies and their senior employees.

Finally, forecasters are keeping an eye out for activity in these three mysterious worlds:

7. Cybersecurity

Businesses of all types and sizes are suffering data breaches each year, and identity theft has affected nearly 60 million Americans, according to a 2018 survey by The Harris Poll. That’s up from 15 million in 2017.

Those breaches and hacks are costing individuals and businesses a lot of time, money, and trust, leading to a continued search for solutions.

A 2017 PWC poll found that 88% of consumers agree that the extent of their willingness to share personal information is predicated on how much they trust a given company; and 87% said they would take their business elsewhere if they didn’t trust a company to handle their data responsibly.

The importance of cybersecurity is expected to continue and the size of the global cybersecurity market is expected to increase to nearly $281.74 billion by 2027 .

8. Cannabis

Cannabis legalization is rolling out across North America. Eleven states, plus Washington, D.C., have legalized recreational marijuana for adults; a majority of states have legalized medical marijuana; and full legalization came to Canada in late 2018.

(It’s still illegal on the federal level in the U.S., but according to a 2019 Pew Research Center survey , two-thirds of Americans.) It’s a growing industry, but just like any startup, trendspotters warn that investors should watch for hiccups ahead.

9. Cryptocurrency

In 2018, nearly 60% of Americans had heard or read about the world’s largest cryptocurrency, Bitcoin, according to a joint SurveyMonkey and Global Blockchain Business Council poll , but only 5% actually owned the digital coin.

Most forecasters expect that to change: Cryptocurrencies in general have grown from a few million investors to tens of millions.

The crypto market still has its challenges, though. Watch for a continued focus on fraud and renewed efforts toward regulation.

Investing Doesn’t Have to Be Scary

The idea of putting your hard-earned dollars into any investment—whether it’s trendy or traditional—can be daunting. But getting started doesn’t have to be difficult.

Investors will pay zero management fees with SoFi Invest® and they’ll have access to SoFi financial advisors. SoFi builds portfolios from a broad mix of exchange-traded funds (ETFs) that follow more than 20 indexes.

After that, investors can choose a hands-off approach, where portfolios will be automatically rebalanced about once a month, to make sure you stay on track with target asset allocation.

Or investors have the option to choose a hands-on approach and still pay zero in transaction fees. Either way, investors can manage their portfolios completely online.

Interested in the way the markets work and ready to put your money into action? Get started with an invest account with SoFi.



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.
[cd_brand_name]
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.

SOIN19047

All your finances.
All in one app.

App Store rating

Download on the App Store
Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender