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Investing

May 03, 2022 When you're looking for a safe way to invest your money, things don't typically get any more solid than government-backed securities. The U.S. Department of Treasury offers several different low-risk options, including notes, bonds and bills. Treasury bills, or T-bills, can be appealing because you're not required to tie up your money for a long period of time. However, they're not necessarily right for every kind of investor. You may want to consult with a financial advisor, who can advise you about T-bills, stocks or any other type of investment. Read More...

Apr 29, 2022 Wealth management firms are all different, with their own specializations and services. As a result, the process for choosing a wealth manager is a very personal one. Wealth managers work closely together with their clients to identify financial goals and map out a plan for achieving them that's built around choosing solid investments that'll grow over time. If you're ready to build wealth, there are a number of guidelines you should follow for choosing a firm. You can also use SmartAsset's free matching tool to help you find financial advisors who serve your area. Read More...

Jan 07, 2023 Investing can intimidate a lot of people because there are many options and it can be hard to figure out which investments are right for your portfolio. This guide walks you through ten of the most common types of investments, from stocks to commodities and explains why you may want to consider including each in your portfolio. If you’re serious about investing it might make sense to find a financial advisor who can guide you and help you figure out which investments will help you reach your goals. Read More...

Dec 29, 2022 If you're looking to invest $100,000, you have a lot of options -- but some are absolutely better than others. You could also invest in real estate, or put some of the money into a diverse basket of stocks on the market. No matter what you do, you always want to make sure you're smart and consider all of your options. One way to make things a bit easier, of course, is to find a financial advisor to help you invest your $100,000 (and to manage the money as it grows.) Read More...

Jan 05, 2023 Passive investing is an investing strategy that involves buying and holding investments for a long period of time, rather than making frequent trades to try to beat the market. It is a go-to strategy for long-term investors because it capitalizes on the typical upward trend of the overall market over many years, which tends to be favorable. Minimizing trades also ensures that transaction costs are as low as possible. Consider speaking with a financial advisor if you're trying to decide how to take a more active approach to managing your investments. Read More...

Jan 24, 2023 Whether you're new to investing or have been doing it for years, mutual funds offer a great way to invest your money. It allows you to invest in multiple stocks and bonds without the hassle of choosing and buying each individually. Plus, mutual fund companies can do all this work for you. While convenient, mutual funds aren't always accessible to all investors due to their potentially high minimums. You may have a minium that requires anything from $0 to thousands of dollars. You may want to work with a financial advisor who can help you determine whether mutual funds are right for you and where they may fit into your overall portfolio.  Read More...

Jan 25, 2023 Warren Buffett said it best: “Read 500 pages like this every day. That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.” Whether you're a beginner or a seasoned investor in need of a refresher, reading some of the best investing books is a great way to sharpen your knowledge. With these books, you can pick Peter Lynch's brain, learn the history of Wall Street or simply figure out if you're ready to use that spare money tucked away in your savings account to start investing. And if you want some extra guidance as you apply your newly acquired knowledge to your portfolio, consider enlisting the help of a financial advisor. Read More...

Feb 28, 2022 A wealth manager is a subset of financial advisor that primarily offers  high-net-worth and ultra-high-net-worth clients wealth management services. But a wealth manager's role is far more comprehensive than just offering investment advice. They focus on a holistic suite of services that encompasses all parts of a person's financial life. This can include investment management and financial planning, as well as accounting and tax services, retirement planning and estate planning. SmartAsset's free tool can help you find a financial advisor who serves your area. Read More...

Sep 24, 2018 When it comes to investing, millennials aren't known for being a reckless bunch. According to a study published by UBS earlier this year, Americans aged 21 to 36 are the most fiscally conservative generation since the Great Depression. Their better-safe-than-sorry attitude can be chalked up in part to the economic turmoil of the last few years and the unique financial challenges they face. Read More...

Feb 08, 2018 Everyone makes mistakes and when it comes to your investment strategy, some wrong moves can be worse than others. Whether you're dipping your toes into the investment game for the first time or you've been playing the market for years, there's always the possibility that your strategy may backfire. Maxing out your returns means knowing what you should and shouldn't do with your money. Here are some of the most common pitfalls investors should try to avoid. Read More...

Jan 26, 2023 Vanguard has released its January 2023 investment and economic forecasts, and there are some interesting projections that all investors should consider. The forecast predicts faster economic growth in China than in the U.S. or Europe. When looking at investments, Vanguard predicts global equities to have the highest return projection for the year amongst all equities. Vanguard also projects a solid year for bonds, with U.S. high-yield corporate bonds and emerging markets bonds having the highest potential projected return. It should be noted, however, that they both also have double-digit median volatility, nearly doubling all other fixed-income projections. Read on to learn more about Vanguard's top projections as well as what investments you may want to consider avoiding. If you're looking to change up your portfolio in 2023 and don't yet have a financial advisor, you may want to think about changing that. It is expected to be a difficult investment year to predict, and a financial advisor can help you strategize your positions. Read More...

Jan 25, 2023 If you put your money to work by investing, you can profit daily from passive investments. Passive income-generating investments that don’t require your active involvement include exchange-traded funds, individual stocks and bonds and real estate investment trusts. You can accumulate funds to start investing, as well as generate some daily income, by saving money and putting it into bank savings accounts and certificates of deposit. Talk to a financial advisor before starting to invest to get insight into your personal situation. Read More...

Jan 24, 2023 The calendar recently switched from 2022 to 2023, but if you didn’t do a year-end review of your financial portfolio, don’t worry -- there’s still time to take a look and fix anything that isn’t quite right before we get too far into this year. If you’re not sure where to start, financial services form Morningstar has a list of seven steps you can take right now to review your portfolio. If you want more help making sure you’re ready to go, consider working with a financial advisor. Read More...

Jan 23, 2023 It's no secret that 2022 was a difficult year in the market for stocks, but dividend stocks actually delivered solid returns for investors. And that's good news for retirees who rely on dividend stocks as a source of income. With last year's impressive performance from dividend stocks, we'll take a look at what's in store for 2023 and the best dividend mutual funds and exchange-traded funds (ETFs) to monitor. Consider working with a financial advisor to create an investment plan for yourself. Read More...

Jan 20, 2023 Though the inflation rate has slowed in the past six months, there is no denying that Americans are still living in an inflationary environment. This impacts people day-to-day -- when they go to the grocery store and consider taking out a second mortgage to buy a box of cereal, for instance -- but it also has more nuanced impacts, such as on retirement savings. Investing is always difficult, but figuring out which investments to make during a period of high inflation can be particularly challenging. Asset management firm Morningstar, though, has laid out some solid options for investors looking to hedge their portfolios against inflation. For more help with managing your portfolio in the times of high inflation, consider working with a financial advisor. Read More...

Jan 19, 2023 Multi-asset strategies are styles of investment that provide for including a variety of different financial assets such as stocks, bonds and cash in a portfolio. Multi-asset strategies can provide greater diversification and less downside risk while also adding income and growth potential compared to strategies focused on a single asset class. Professional investment managers overseeing funds labeled as balanced, diversified growth and target date may employ multi-asset strategies. To select an investment strategy that’s right for you, consider talking it over with a financial advisor. Read More...

Jan 17, 2023 If you have $500 that isn't earmarked for bills, that’s enough to get started in investing. It may or may not feel like a fortune to you. But with the right investments, it can certainly be used to start one. So if you’re looking to take $500 and turn it into something more, here are two basic questions you'll need to answer if your goal is to start long-term investments and build long-term wealth. A financial advisor can answer your questions, while also helping you build a financial plan for the future. Read More...

Jan 17, 2023 After-hours trading happens outside the standard hours during which a stock exchange (such as the Nasdaq or New York Stock Exchange) is open. This trading can fall under post-market trading, which happens between 4:00 p.m. and 8:00 p.m., or pre-market trading that occurs in the morning before 9:30 a.m. A  financial advisor could be better equipped to help answer any questions about how after-hours trading and investing might fit into your larger financial goals and plans. Here's a breakdown of how after-hours trading works. Read More...

Jan 17, 2023 Most real estate investors are familiar with traditional tax-deferred exchanges. They require you to sell your current business property before you can purchase another. However, there’s an alternative route that allows you to take some extra control in the unpredictable real estate market. A reverse 1031 exchange is a tax-deferred method that provides a variety of potential benefits. But it requires a careful strategy and knowledge of legal guidelines. Here’s what you need to know about them before diving in. Read More...

Jan 17, 2023 Real estate investment trusts, or REITs, can be a great addition to a well-diversified portfolio. These investments offer a solution to those looking to benefit from real estate assets. However, they also come with their own unique tax implications. Here’s a look at how REITs are taxed and what you can expect to owe Uncle Sam if you own these investments. Consider working with a financial advisor as you prepare your taxes on REIT dividends. Read More...

Jan 17, 2023 Survivorship bias isn’t a term you likely hear often, but you know exactly what it is. Ever listened to a sales pitch that opened with the most optimistic information, yet neglected to include the less-than-flattering details? This is a type of selection bias known as survivorship bias. If you are contemplating an actively managed investment plan for your assets, it's important to understand how survivorship bias can be used against you. Without knowledge of how financial planners and fund managers can skew their data, you can easily fall into the trap of overly-optimistic returns. Cover your bases by starting with a financial advisor. While investment management is for risk tolerance and asset allocation, a vetted advisor can help you with effective estate plans, retirement and general financial advice. Read More...

Jan 12, 2023 Wealthfront and Vanguard specialize in two different types of online trading platforms. While Vanguard offers a full-service trading platform, it specializes in mutual funds. Wealthfront, on the other hand, is what is known as a robo-advisor service. This means that you don’t select any specific security at all. Instead the firm helps you to select financial priorities and goals, and based on these choices it allocates your money among a series of pre-made portfolios. Each firm's online service is an excellent choice for long-term, hands-off investors, yet each approaches this subject in a different way. Coming up with long-term financial goals is something a  financial advisor can be extremely helpful with.  Read More...

Jan 12, 2023 A stock that is expected to outperform other stocks in its market sector gets an Overweight rating. Financial analysts who are employed by investment firms research  stocks and provide their opinions to investors about their possible future performance. Their opinion takes the form of a rating. An Overweight stock rating indicates to investors that it may be a good investment. A financial advisor can help you figure out whether an Overweight stock is a good fir for your portfolio. Read More...

Jan 12, 2023 Want to grow wealth but don’t want to have to spend hours poring over your investment portfolio or investment decisions? If so, a lazy portfolio may be right for you. Lazy portfolios are designed to generate returns without requiring constant maintenance or attention. It’s a 180-turn from active investing and day trading, which are decidedly more hands-on. If you prefer a passive approach to investing or you lean toward a buy-and-hold strategy, then building a lazy portfolio could be a simple way to achieve your financial goals. Finding the kind of portfolio that fits your goals, timeline and risk profile is best done by working with a financial advisor. Read More...

Jan 12, 2023 Fixed-income securities play an important role within individual investment portfolios and the economy at large. But like other securities, fixed-income instruments come in a myriad of variations, from short-term Treasury bills that only pay interest when the bill matures, to long-term Treasury bonds, whose investors receive interest twice yearly. Below, we’ll specifically examine the similarities and differences between Treasury bills, Treasury bonds and other types of bonds. If you’re interested in investing in fixed-income securities, a financial advisor can help you build a balanced portfolio. Read More...

Jan 12, 2023 Like most investors, you’ve probably watched your investment account balance fluctuate depending on market conditions, company or fund performance and other factors. Of course, you’d likely prefer to see your account balance grow rather than shrink. It’s exciting to see the value of your investments increase. But unless you sell those assets for cash, any increases are considered unrealized gains. We'll discuss how unrealized gains work, why they matter for tax purposes and how to calculate them. Consider working with a financial advisor to analyze possible capital gains on your investments. Read More...

Jan 11, 2023 As you begin investing, you’ll likely hear about two popular online investing companies: Vanguard and TD Ameritrade. These are two of the largest brokerage firms in the U.S. While the companies have a few similarities, they each cater to vastly different investors. In either case, it's wise to work with a financial advisor to develop financial goals and realistic steps to reach that goal. Here is what you need to know before deciding to work with Vanguard or TD Ameritrade. Read More...

Jan 11, 2023 Investing in nickel is a bet on the prospects of the industrial and manufacturing sectors, both of which use lots of this base metal. Nickel investing, and investing in other base metals like zinc, iron, aluminum and uranium, is different from  investing in precious metals like gold and silver. Base metals' prices move with the economy; precious metals' prices often move in the opposite direction of the economy. If you want to include nickel in your investment portfolio, consider working with a financial advisor. Read More...

Jan 11, 2023 When a loved one passes away, you may receive an inheritance. This money is a token of the person's appreciation for you and often represents a lifetime of savings. When you've received a large sum of money, there is a temptation to splurge on dream vacations, shopping and other fancy items. While it may be okay to spend a portion of it that way, the best option is to save and invest the money for your future. Here's how to invest your inheritance to become set for life. A financial advisor can give you valuable guidance on how to make the best use of an inheritance. Read More...

Jan 11, 2023 Publicly traded companies can offer shares of preferred stock or common stock to investors to raise capital. Both can pay dividends, though there can be differences in how much is paid out and when those payouts occur. Between the two, more companies typically offer shares of common stock than they do preferred stock. Whether it makes sense to choose preferred stock or common stock can depend on your objectives for investing and whether you’re interested in having voting rights as a shareholder. Working with a professional financial advisor can be a great way to make sure you've fully considered all the factors that go into choosing which kind of stock to buy. Read More...

Jan 11, 2023 Special purpose acquisition companies or SPACs for short are formed to raise capital through an initial public offering (IPO). The capital raised from investors is then used to acquire a private company. Also called shell companies or blank check companies, SPACS have become an increasingly popular alternative to the traditional IPO process. For example, between Jan. 1, 2020, and Aug. 21, 2020, SPACs raised $31 billion across 78 transactions, surpassing the capital raised by IPOs over the same time period. Interested in how to invest in SPACs? It’s important to weigh the pros and cons before diving in. Read More...

Jan 10, 2023 The phrase quadruple witching brings to mind stories that begin, "It was a dark and stormy night..." or folkloric visions of witches flying chaotically on broomsticks across the brightness of a moon. In the context of investing, quadruple witching also refers to possible chaos but chaos in the financial markets. Such chaos can erupt due to four different types of contracts on financial assets expiring on the same day. The quadruple witching hour is the last hour of the trading session on that day. The question is whether investors can make abnormally robust profits on quadruple witching days due to market fluctuations. If you want to trade off quadruple witching, run your plans by a financial advisor to ensure you don't end up casting a spell on your portfolio. Read More...

Jan 10, 2023 Nearly half of all Americans depend on secondary work to get by. This is largely hidden from BLS and Census bureau data. According to the Census, 7.8% of Americans work more than one job. Having multiple streams of income is rapidly becoming how people save for retirement, get out of debt or just build up some spending money. That Etsy store might not pay all the bills, but done right it could certainly help a six-month emergency funde stretch a lot longer. Here are a few rules of thumb on creating multiple streams of income. Consider working with a financial advisor on how best to augment your income. Read More...

Jan 10, 2023 The volatility smile is a visual representation of the implied volatilities of options contracts that expire on the same date. The appearance of a volatility smile indicates that options traders are willing to pay more for options that are in the money or out of the money than for options that are at the money, and that the further they are in or out of the money, the more traders will pay. It is a relatively rare occurrence that sometimes shows up during extreme market downturns. A financial advisor can explain whether and how options trades can be part of your investing strategy. Read More...

Jan 10, 2023 The owner of a Roth IRA can trade options using funds in the account, but restrictions and risks make the strategy unlikely to meet the objectives of most investors. A Roth IRA is a tax-advantaged account designed for long-term retirement savers who typically invest in low-cost passively managed index funds. Options trading, on the other hand, calls for lots of attention and knowledge of markets and involves sometimes-complex strategies as well as significant risks. Despite this apparently poor fit, options trading in a Roth IRA account can generate income and also hedge against market declines. A financial advisor can help you decide how to pursue your investment goals. Read More...

Jan 10, 2023 If you want to be rich, many financial experts will suggest you invest. You can become rich in other ways than investing, of course, such as inventing something useful or starting a business. But the genius behind investing is that the money you earn is passive income. While you’re working or living your life or even sleeping, your money is earning more money for you. If you want to get rich through investing, you’re going to need to think carefully about where to put your money. You can also work with a financial advisor who can help create the right plan that can help you achieve that goal as well.  Read More...

Jan 08, 2023 Investing is frequently filled with complicated jargon that can make it difficult to understand how your investments are actually performing. The Capital Gains Yield is one of these terms. While most brokerages calculate this number for you on all of your stocks, you should still learn what that calculation is based on and how to use it when determining which stocks to buy, keep and sell. You can also work with a financial advisor who can use their years of experience and skills to manage this process for you.  Read More...

Jan 06, 2023 Wheat is one of the world’s most widely grown crops, which can make it an attractive investment. Investors use wheat to diversify, as a hedge against inflation and in search of profit as the cultivation and use of wheat increases in many countries. Investing in wheat can be accomplished by purchasing wheat exchange-traded funds, shares of companies in businesses related to wheat and by trading wheat commodity futures contracts. A financial advisor can help you decide how and whether to include wheat in your portfolio.   Read More...

Jan 06, 2023 Stockbrokers get paid more than most workers. Estimates of the median combined salaries and commissions received by people who sell stocks and other securities to investors range from $62,910 to $149,664 a year. The estimates vary depending on the source of the estimate and the method used to gather data, with estimates derived from self-reports and job postings by employers running considerably higher than government data collectors. Brokers with more experience, and those working certain areas of the business, may also earn more. Here's what you need to know. A financial advisor can help you get the best value from your transactions handled by a stockbroker. Read More...

Jan 06, 2023 If you have $200,000 to invest, there are many ways to make your money grow. Let's take a look at how you can invest in the stock market, real estate and other common investments, while keeping a few practical tips in mind. A financial advisor can help you create a financial plan for your investment needs and goals.  Read More...

Jan 05, 2023 The simple moving average, or SMA, is one of the most common pieces of technical data that investors rely on. In the case of the 200-day SMA, it shows you the stock’s average price over the past 200 trading days. Here’s how it works. A financial advisor can help you create a financial plan for your investment needs and goals.  Read More...

Jan 05, 2023 Municipal bonds, or “munis,” are popular investments for a few reasons. Most notably, as a government bond, they can be the closest thing to a safe asset that the market offers. And, investors typically pay no federal taxes on the income that these bonds generate, creating an effective boost to their otherwise relatively low rate of return. Ordinarily, this can be a very stable section of the market. But during Federal Reserve interest rate hikes, bond payments can rise and prices fall. This can result in higher yields and lower returns overall, although municipal bonds don’t always follow this rule. Here’s how it works. A financial advisor can help you create a financial plan for your investment portfolio needs and goals.  Read More...

Jan 05, 2023 A stash of $250,000 can earn you a considerable income, given the right mix of assets. From real estate to corporate debt, assets are available that can turn your money into even more money with minimal risk. There are numerous ways to invest $250,000, depending on your goals. Here is how you can invest your money to produce regular income. You can also work with a financial advisor who can either make recommendations on making income-bearing investments or can manage your assets for you. Read More...

Jan 05, 2023 There are several metrics you can use to evaluate whether a rental property investment has potential, including the 2% rule. When used with the property's capitalization rate this rule helps investors get a sense of what a property’s rental income should be as a percentage of the purchase price. Understanding this rule and how to use it can make it easier to evaluate whether a particular rental property may be right for you. A financial advisor can help you create a financial plan for your real estate investment needs and goals. Read More...

Jan 05, 2023 Investing in rental properties can be a great way to generate a passive income stream. A key part of the puzzle is identifying properties that have the potential to be profitable. That’s where knowing how to calculate gross rent multiplier or GRM comes in as it can help you better manage and profit from any potential rental property. A financial advisor can also help you create a financial plan for your real estate investing needs and goals. Read More...

Jan 04, 2023 There are a lot of reasons an investor might be interested in putting their money into agriculture. For one, it may seem like a safe bet since during a recession, people may cut back on haircuts or hold off on getting their car repaired but nobody stops purchasing food. You may also simply be interested in the agriculture industry or perhaps you’ve always romanticized the idea of farming. If you want to raise money by helping farmers raise crops, then keep reading. Before you invest in anything, it’s always prudent to first talk to a financial advisor who can look at your portfolio and help you manage any risk. Read More...

Jan 03, 2023 A common number that people generally seek to save is $1 million. It's a good start to long-term retirement and is a threshold that people view favorably as they seek to reach their financial goals. Saving $1 million is doable, but it becomes more challenging the fewer years you have. You'll need to take into account a number of factors to maximize your savings and make certain investments in order to save $1 million in 10 years. You can also work with a financial advisor who can manage your assets for the future. Read More...

Jan 03, 2023 Investors can diversify their portfolios and potentially achieve higher returns investing in small businesses. Purchasing equity stakes or lending money to the nation’s more than 30 million small enterprises provides an alternative to more conventional investments such as stocks, bonds and real estate. It can be hard to identify good opportunities. However, and federal regulations also limit the amount most investors can invest into small businesses. The practice involves significant risk of loss and lengthy commitments as well. A financial advisor could help you create a financial plan to protect your investments and identify new opportunities to make money. Read More...

Jan 03, 2023 Depending on your investing strategy and financial resources, there are many things you can do with $25,000. We discuss four steps to prepare for investing this sum of money and then several options you may find appropriate given your goals, risk profile and timeline. A financial advisor can help you create a financial plan to protect your investments and identify new opportunities to make money. Read More...

Dec 27, 2022 With the market in a downturn, it's no secret bonds haven't been the hero many investors were expecting in 2022. Typically when stocks are down, bonds are where most investors flock to. But not this time. However, that doesn't mean aren't any other alternatives for investors to seek shelter. Morningstar recently identified funds that can provide safety-nets. And that safe place comes in the form of alternative funds. We'll discuss what alternative funds are and which can protect investors from volatility. A financial advisor could help you create a financial plan to protect your investments and identify new opportunities to make money. Read More...

Dec 20, 2022 Cash in lieu of fractional shares is a type of payment where investors get cash instead of a fractional share or a partial share of a stock. Let's break down what that could mean for your investments and how it can affect your taxes. A financial advisor can help you create a financial plan for your investment needs and goals. Read More...

Dec 19, 2022 Typically, Americans start investing for retirement through their first full-time job. As a result, their investments grow gradually. However, $10,000 can give a helpful jolt to your portfolio, whether you started investing last week or you’re close to retirement. There is an abundance of profitable assets you can invest $10,000 in today, depending on your goals. Here are seven common ways to help that money grow. If you have $10,000 to invest, a financial advisor can help you create a financial plan for your investment needs and goals. Read More...

Dec 19, 2022 New financial challenges and opportunities confront investors each year, but what's not new is the optimal time to jump on many of these challenges and opportunities. Financial services firm Morningstar released a month-by-month guide of specific financial tasks to tackle in 2023 covering investments, retirement and taxes. Some of the tasks involve simply monitoring a particular aspect of your finances to see if a change or adjustment needs to be made; other tasks involve making a needed change or adjustment. Consider working with a financial advisor as you prepare to tune up or completely redo your investments, retirement planning and taxes. Read More...

Dec 15, 2022 The most successful companies in history don’t just have legendary profits. Generally, they build a substantial lead over their competitors, known as an economic moat. This scenario gives rise to wide-moat stock, a type of sustainable competitive advantage a business possesses. A wide-moat  stock is a share of that type of business. Here’s what it means. If you need help picking an investing strategy, a financial advisor can help. Read More...

Dec 15, 2022 While a stock split doesn’t change the value of your investment, it’s generally a good sign for investors. In most cases it means that the company is confident about its position going forward, and that it wants to seek additional investment. A stock split usually makes it easier for your investment to gain value -- though it generally doesn't mean a sharp increase right away. For help managing your own stock portfolio, consider working with a financial advisor. Read More...

Dec 14, 2022 Investing in passive income can allow you to make money with minimal portfolio management. There are many types of investments to make passive income. If you have $10,000, here are eight common passive investments to consider. A financial advisor can help you create a financial plan for your passive investments. Read More...

Dec 14, 2022 Margin rates are a financial concept the average investor might not be informed about -- and this lack of knowledge could be costly. As a general rule, new investors should stay away from investments that have a margin rate, as they tend to be more complicated options better suited for someone with more experience. A financial advisor can help you make sense of margin rates and make the right investment choices for you. What Is a Margin Rate? A margin rate refers to the cost of the money that you borrow from a broker to buy stocks. Though new investors may sometimes find themselves having to pay a margin rate, it is generally the providence of professional stock traders and sophisticated investors. Frequently, investors who have been at this for some time will purchase stocks, bonds and exchange-traded funds using a mix of their own assets and money that they’ve borrowed from the broker. The money that the investor borrows is referred to as the margin. The margin rate is how much the broker charges to borrow that money. Why do investors borrow money to buy stocks, bonds or ETFs in the first place? The same reason an investor does anything -- it gives them the chance to make more money. However, if things do not go well, you could also lose your proverbial shirt. Buying investments on margin always involves more risk. The payoff, though, can end up being significant. If you have a brokerage account and aren’t sure what type of account you have, it’s probably a cash account. You send money from your bank and that money purchases securities. You borrow nothing to fund your investments. You will only be dealing with margin rates if you have opened a margin account. How Are Margin Rates Determined? Typically, margin rates are 3% to 12% of the notional value of the contract. Your brokerage will decide how much to charge, but as you can imagine, brokers are competing with each other and trying to attract investments – and so they tend to be fairly close to each other and offer whatever the market demand will support. Margin rates also generally line up with whatever the Federal Reserve is doing. If the Fed is in the midst of raising interest rates, your margin rates are probably going up as well. Other factors can play a part in deciding the margin rate as well, such as how much money you have in your margin account. The more you invest, the less your margin rate may be, depending on the brokerage you are working with. Margin Rates FAQ There are a few more pieces of information about margin rates that may come in handy to know, if you do decide to take out a margin loan. For instance: Margin rates accrue daily and are charged on a monthly basis. The more you pay in margin rates, the more than eats into the profits you’re making when investing. That’s why investment traders often engage in short-term trading purposes when they take margin loans. It's typically considered not a good idea to take out a margin loan for a long period of time. Typically, when it comes to setting a margin rate, a brokerage will establish a base rate and then add another percentage. Depending on the assets you have with the brokerage will determine how high or low that percentage is. So if a brokerage has a base rate of 10.25%, everybody who applies for a margin loan will pay that rate – plus something else. For instance, if you have $10,000 in your margin account, you might pay a base rate + 1.825%, while the borrower with $100,000 in an account pays the base rate + 0.325%. The investor with half a million in the account will pay a base rate and may pay an even smaller additional percentage, like 0.075%. Margin rates can change at a moment’s notice. You could have a margin loan with a brokerage and the rate could go up or down – and you might not even be alerted by your brokerage. That's another reason to be wary of investing with margin loans. The Bottom Line Newcomers should stay away from opening a margin account until they have a good feel for investing. Margin loans often pay off handsomely for some investors – that’s why they exist, after all – but if you're new to this, or even if you're an established investor, you could end up owing and losing a significant amount of money. When it comes to understanding margin rates, there’s really no margin for error. Investing Tips For help managing complex investments, consider working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. To see what your investments could look like down the road, use SmartAsset's free investment calculator. Photo credit: ©iStock.com/mediaphotos, ©iStock.com/BongkarnThanyakij, ©iStock.com/Neyya Read More...

Dec 14, 2022 Stock prices are set by what’s known as the secondary market, which is the technical term for investors trading shares among themselves. This is opposed to the primary market, when a company sells shares of stock directly to investors. A stock’s price is set by supply and demand in a secondary market. So when more investors want shares of stock, and fewer are available, prices go up. But when less investors want to buy shares, and there are more shares than demand, prices fall. Let's take a deeper look at how it works. A financial advisor can help you create a financial plan for your investing needs and goals. Read More...

Dec 13, 2022 Building a tax-efficient portfolio so you can keep more of your investment income and capital gains is a concern of investors the world over. In India, for example, the government has created a "tax-saving mutual fund" with tax benefits in mind. In the United States there are several fund-focused ways to save on taxes, which are described below. Consider working with a financial advisor to build a comprehensive tax planning strategy. Read More...

Dec 13, 2022 For many investors, 2023 might be the first time to consider bonds in their adult lives. That’s the takeaway from an insight published recently by Goldman Sachs, which forecasts that 2023 bond yields will exceed stock dividends. This, the paper says, hasn’t happened since the height of the Great Recession in 2008. Per the report: “Bond yields trended down following the global financial crisis, making stocks seem like almost the only choice for investors seeking attractive returns. In fact, equities have materially outperformed bonds since 2008 and especially since the COVID-19 crisis — the relative performance of the S&P 500 Index versus U.S. 30-year Treasury bonds has reached new peak levels this year, much above those during the tech bubble.” Now, to be clear, this report refers specifically to yields rather than returns. That is, Goldman is writing about the interest payments on bonds relative to the dividend payments from a stock portfolio. Capital gains returns are a separate area, one in which stocks tend to outperform bonds during most economic environments. However to see stocks reliably outperform bonds on income has been an unusual feature of the past 14 years. Bond interest often exceeds stock dividends because of their reliability. A stock might issue strong dividends at any given time, but bonds issue steady, fixed payments. That stability tends to add up to greater overall yields for bonds, although it hasn’t been the case for a long time. So it it time to dip into bonds? Read on for more insights, and as always, consider matching with a vetted financial advisor for free to strategize whether increased bond exposure makes sense for your particular financial plan. Read More...

Dec 12, 2022 It's no secret that equities and bonds have taken a shellacking in 2022. The downdraft from the highest inflation in four decades, sharply rising interest rates and persistent supply chain disruptions combined to hammer the S&P 500 some 25% by midyear. And approaching yearend, the benchmark index has trimmed those losses to about 17%, which is still a painful correction. Nevertheless, not everyone's losses can be laid exclusively at the feet of macroeconomic trends. Fidelity Investments says there are three sometimes-ignored factors that may have compromised your investments. We explain them below. Consider working with a financial advisor to ensure your portfolio's performance is not unnecessarily burdened. Read More...

Dec 12, 2022 The battle between passive and actively managed funds continues to rage on. Some of the top investing minds legends have consistently promoted the reliance on passive index investing to grow your wealth and the avoidance of actively managed funds. Between their fee structures and skewed data, actively managed funds are much maligned. But actively managed funds may be breaking through this long-held stigma based on clear results. Let’s look at how T. Rowe Price is touting the virtues of actively managed funds and whether they're right for your portfolio. To determine what investing strategy might work for you, cover your bases by starting with a financial advisor. While investment management is for risk tolerance and asset allocation, a vetted advisor can help you with effective estate plans, retirement and general financial planning. Read More...

Dec 07, 2022 Bonds are one of the two most basic investment options, along with stocks. While stocks are fairly well understood -- you buy a piece of a company and make money when the company does well and becomes worth more -- bonds are a bit more mysterious. You aren’t buying a part of the company, but rather you’re essentially lending the company -- or, in the case of municipal and federal bonds, the government -- money, with the expectation that you will get paid back with interest after a set period of time. The bond market has been strongly impacted by the economic volatility that has cropped up in 2022. Anyone looking to start investing in bonds right now should understand the current state of the market and how to get the most out of bond investing at this particular time. This page will walk you through what you need to know. For more help investing in bonds or with any other financial considerations, consider working with a financial advisor. Read More...

Dec 07, 2022 Real estate can create diversification in a portfolio while also acting as a hedge against inflation. Having a higher net worth could make it easier to invest in multiple properties in order to create passive income for yourself. High net-worth real estate investors are individuals who have $1 million or more in investable assets. If that definition applies to you, it’s helpful to have a strategy when adding real estate to your investment portfolio. Any time you have a portfolio of assets with a significant value, you may want to work with a financial advisor to help protect and grow those assets. Read More...

Dec 07, 2022 Companies use stock splits to reduce the price of their shares, which can help attract new investors. Reverse stock splits, which increase the price of shares on the market, can help keep a company from being delisted by a stock exchange. Splits and reverse splits don’t change the company’s total market value of its shares in an individual investor’s portfolio. Share prices are adjusted to reflect the ratio of the split, so after a 2-for-1 split shares trade at half the previous price. Consider talking to a financial advisor before investing in a company that has announced a stock split to see if it's a good fit for your portfolio. Read More...

Dec 07, 2022 If you're looking to receive passive income with your investments, there are many ways to do it. While your best choice will depend on certain factors, such as your age and risk tolerance, there are many ways to invest $20,000. The right investment options for you are going to depend on what your goals are for the long haul. You can also work with a financial advisor to help you pick your investment options.  Read More...

Dec 06, 2022 Passive losses can be used like most losses. You can deduct them from your gains on your taxes, allowing you to pay taxes only on the resulting profits. The catch is that in most cases you can only use passive losses to offset passive gains. This rule only changes if you liquidate your position in the passive activity, allowing you to take a one-time capital gains deduction. Here’s how it works. For for specific guidance focused on your particular financial situation, consider matching for free with a vetted financial advisor. Read More...

Dec 06, 2022 You may be familiar with the tax implications of capital gains, but what about capital loss? A capital loss refers to the money that your investments lose. You can write off your capital losses from your taxes and do it year after year by using the capital loss carryover.  This way you only have to use the portion of the loss every year that helps you with your taxes. Consider working with a financial advisor if you're looking for more tax planning strategies for your specific situation.  Read More...

Dec 01, 2022 An initial public offering, or IPO, occurs when a company first offers shares of its stock for sale to the general public. In most, if not all, cases retail investors cannot buy IPO stock. They can legally do so, but typically don’t have access to stock in its initial offering. Companies sell these shares to banks, funds and other institutional investors. Those investors, in turn, resell stock on the open market. Determining if it's a good investment is completely up to your individual portfolio and long-term goals. You may want to work with a financial advisor to help you determine if it's a good fit.  Read More...

Nov 30, 2022 Saving money is central to nearly any plan for achieving personal financial health. But while planning to save is almost always a good idea, all savings plans are not created equal. Plinking coins into a piggy bank probably isn’t the optimal approach for a variety of reasons, including the fact that it earns no interest. The actual best places to put your money vary depending on your savings goals and time line, among other factors such as safety and liquidity. However, a solid list of candidates for almost any saver will likely include high-yield savings accounts, certificates of deposit, money market funds, Treasury bills and Series I savings bonds. Ask a financial advisor for detailed saving guidance. Read More...

Nov 30, 2022 If faced with the proposition of owning one share of company stock for $50 or two shares for $25, you might wonder what difference it makes. In a reverse stock split, the amount of shares decreases, but your investment doesn’t lose value. However, reverse stock splits can be ominous for investors as a company tries to inflate its stock price and keep investors engaged. If you're looking for help with investment choices, consider working with a financial advisor. Read More...

Nov 30, 2022 Losing money can be inevitable even if you haven’t been investing for long. A string of unfruitful investments in quick succession can lead to short-term capital losses, which accrue as you sell assets that have plunged in value. Short-term capital losses refer to investments you held and sold under twelve months. You can use them to offset future short-term capital gains. Consider working with a financial advisor if you're wondering how a short-term capital loss can help your finances. Read More...

Nov 29, 2022 If you've begun saving for retirement, there's a good chance you've heard of target date funds. They're a common investment vehicle, often used in employer-sponsored retirement plans like 401(k)s or 403(b)s. More specifically, target date funds are exchange-traded funds or mutual funds that are designed to target returns over a specific time frame (typically until an investor's planned retirement), instead of ad infinitum. While a target date fund that targets your approximate retirement date may seem like a good idea, new research shows that there are often flaws in target date funds that may not make them a particularly good investment option for all retirement savers. Instead, it's a good idea to critically examine your financial profile and retirement goals and make decisions from there. A financial advisor may be able to help you figure out if a target date fund makes sense for you. Check out SmartAsset's free advisor matching tool to find advisors in your area. Read More...

Nov 29, 2022 When it comes to investing online or on your phone, Stash, Acorns and Robinhood are three names at the top of the industry. Each was designed to simplify investing for retail investors, offering straightforward apps that are easy to use and understand. While there are larger players in the brokerage space, these companies are certainly some of the most dynamic. All three offer many ways to invest your money, but it’s important to note the differences, especially the fact that only two of the three allow you to invest in individual stocks. The differences don’t stop there, and you should know what you’re getting into before you sign up with any of them. For questions about investing, consider  working with a financia advisor in your area. Read More...

Nov 29, 2022 Alpaca Trading is not a trading platform. This company offers two services: a brokerage and an application programming interface (API). As a brokerage, Alpaca offers exchange-based products. It does not offer a client or other form of trading platform. Instead, its API allows third parties to trade with it. A financial advisor can help you find the most suitable trading platform or brokerage service, given your financial goals, risk profile and time horizon. Read More...

Nov 29, 2022 When prices rise rapidly and persistently during an inflationary spiral, dollars lose purchasing power and investors can see the value of their portfolios decline. Inflation-hedging strategies try to counter the wealth-eroding effects of inflation by selecting investments that can potentially counter the effects of inflation. Many investing experts recommend strategies involving a mix of equities, short-term fixed-income investments and holdings related to commodities and real estate. Special-purpose vehicles such as Treasury Inflation-Protected Securities (TIPS) also can play an important role. Consider working with a  financial advisor to boost your portfolio's protection from inflation. Read More...

Nov 29, 2022 If you’re looking to invest money, you may want to consider high-dividend stocks. Dividends are regular distributions that companies dole out to their shareholders. High dividends simply mean that whatever money is returned to shareholders, generally each quarter tends to be substantial. What will follow momentarily are 10 high-dividend stocks to consider. While their annual dividend yield may change by the time you read this, all of these companies are currently rock-solid brands. A financial advisor can help you find the right asset allocation mix to potentially achieve your long-term financial goals.  Read More...

Nov 28, 2022 Airbnb has been a game-changer for the travel industry, revamping the way people book stays away from home. It’s also created opportunities for everyday people to make passive income with short-term rentals. Is an Airbnb investment right for you? Taking a closer look at the advantages and disadvantages can help you to decide. A financial advisor can help you with real estate investing. Read More...

Nov 28, 2022 Many people wonder whether they should be investing in qualified or non-qualified dividends and what the differences are. The largest difference is in how each is taxed. To help you determine what stock paying dividends could have a place in your individual portfolio, you should examine the company's financial statements, dividend yield, prospects for the future and your own risk tolerance. You also determine if the dividends are regular dividends or qualifying dividends. That makes a significant difference in what stocks you invest in due to differences in taxation. A financial advisor can help you find the best dividends for your portfolio and even manage your assets on your behalf. Read More...

Nov 28, 2022 Bonds have taken a beating in 2022, but the damage to your portfolio may be less than meets that eye, provided you handle those losses in a tax-smart way. That's because a technique more commonly associated with equities can ease the pain of this year's fixed-income losses. That technique is tax-loss harvesting, although when applied to bonds there are some key differences from the way the process is used with stock losses. Here's what you need to know. A financial advisor can help you adjust your financial plan to deal with investment losses in bonds and other assets. Read More...

Nov 28, 2022 Investors, whether beginner or seasoned professionals, all have a threshold for risk. Some prefer to play it safe and favor a low-risk investment plan while others are more advantageous with a “high risk, high return” mindset. No matter where you find yourself on this scale, understanding how to gauge a stock and portfolio's level of sensitivity to market fluctuations is a beneficial skill to have. The determining basis used by investors to gauge an investment’s risk and sensitivity is Beta (𝛃). This article will assist you in understanding the importance of beta as well as the two best ways to perform the calculation for a portfolio. For assistance with key metrics like beta, a financial advisor could help you identify good investments for your portfolio. Read More...

Nov 23, 2022 If book runners didn’t exist, they would have to be invented. They’re a crucial component of initial public offerings, or IPOs -- and play an important part of the loan process, reducing risk for the investor. Book runners accept and minimize the financial risk associated with loans, insurance and investments by poring over all of the details and making sure that the financial vehicles being promoted are financially sound. They earn a hefty fee for this. While you don’t need to know what a “book runner” is to make an investment, take out a loan or buy insurance, knowing what one is and how book runners work will make you a more informed investor. For help managing your own investment portfolio, consider working with a financial advisor. Read More...

Nov 23, 2022 One of the most momentous occasions in the business world is when a private firm goes public, starting to offer shares of the company on a stock exchange. This is known as an initial public offering (IPO) and there are various reasons why a company might choose to have one. This page will walk you through how an IPO works and the reasons companies have for going to market. For help investing, including in companies in the middle of an IPO, consider working with a financial advisor. Read More...

Nov 23, 2022 Bonds are a popular security for fixed-income investors and people seeking stability for their portfolios. Understanding how bonds, which are essentially corporate or government IOUs, provide income requires a grasp of the price of a bond and its yield, both of which can fluctuate. Here is how to understand bond prices and bond yields. If you're looking for a fixed-income component for your investments, work with a financial advisor to find the security that best matches your risk profile, time horizon and goals. Read More...

Nov 22, 2022 Owning a rental property can be an excellent way to create a passive income stream. Before you buy, however, it’s helpful to know how to calculate ROI on a rental property to make sure it’s a smart investment. There’s more than one way to determine a rental property’s expected ROI when gauging how profitable it’s likely to be. For help figuring out how rental properties could work into your financial plan, consider working with a financial advisor. Read More...

Nov 22, 2022 A company’s times interest ratio indicates how well it can pay its debts while still investing in itself for growth. A higher ratio suggests to investors that an investment in the company is relatively low risk. Lenders also use times interest expense ratio when evaluating credit decisions. A company’s executives may compare its times interest ratio to similar companies in the same business to see how well they are doing. Ask a financial advisor for assistance evaluating the strength of companies you might like to include in your portfolio. Read More...

Nov 18, 2022 Solvency and liquidity are related, but very distinct, terms that are valuable to investors. When a company is solvent, it means the company has the ability to pay its debts and liabilities over the long run. When a company is liquid, this means the company has significant cash on hand to pay short-term debts or the ability to get cash quickly. Here’s how the two concepts work. A financial advisor can help you evaluate the health of companies whose shares you may be interested in. Read More...

Nov 18, 2022 Real estate is a popular investment, either for capital appreciation or as income. However, there are challenges. Buying land is expensive. Unless you have a lot of up-front capital to stake, you may be locked out, and once you make that purchase you have a lot to lose if the investment goes poorly. Then, once you own the land, you need to manage it. If you want to sell, that means refurbishment and upgrades. If you want to generate income, that means property management. There are ways, though, to invest in real estate without actually owning property. For help investing in retail, consider working with a financial advisor. Read More...

Nov 18, 2022 An exchange-traded fund (ETF) deducts its expenses from the total value of the shares. These fees are typically expressed as a percentage of the fund’s average net assets and referred to as the operating expense ratio (OER). They pay the fund managers’ salaries as well as other costs, including marketing, distribution and administration. OERs vary by fund and most range from about 0.10% to as much as 0.75%. ETF expense ratio fees, while small relative to fees levied on some other investments, can significantly impact the long-term performance of an ETF investment. You can work with a financial advisor if you need help assessing the effect ETF expense ratios have on your portfolio. Read More...

Nov 17, 2022 Online payments are increasingly important as many transactions happen entirely online today. Online payment processors like PayPal are becoming an essential part of the business world. If you want to become a PayPal investor, we’ll explain some easy ways to add it to your portfolio. For help investing in PayPal or anything else, consider working with a financial advisor. Read More...

Nov 17, 2022 There are many investing strategies out there. One popular way of going about investing for those who want to earn income is to invest in dividend stocks. These are stocks that pay out money to investors regularly -- often quarterly, but sometimes in other increments. Investing in dividend stocks works the same way as other investments, but does require a certain strategy. For help investing in dividend stocks and other income-producing securities, consider working with a financial advisor. Read More...

Nov 17, 2022 If the financial meltdown of 2008 taught investors that land isn’t necessarily a surefire asset, the market’s subsequent rebound shows that land continues to be a lucrative investment. By understanding your options and doing your homework, you can find a land investment ideal for your portfolio. Whether it’s an apartment building or an exchange-traded fund for wheat, a land investment can bolster your financial returns. Here are your options and how they work. For more help with investing in land, consider working with a financial advisor. Read More...

Nov 16, 2022 When you buy stock in a company, you hope that the underlying company will do well and cause the share price to rise. When you invest in an index fund, you hope the entire sector of the market that the index tracks will do well and cause all of the companies in it to gain value, thus boosting the value of your index fund holdings. That’s the difference between index funds and stocks in a nutshell. Now let’s dive into the details. Read More...

Nov 16, 2022 Building wealth has grown more accessible than ever, thanks to declining trading costs and fractional share investing. Many brokerage firms already offer zero-commission online and exchange-traded fund (ETF) trading, and now, behemoth financial firm Fidelity Investments has brought one more such tool to the masses. Fidelity Investments, which administers $11.1 trillion in assets, filed documents with the Securities & Exchange Commission on January 19, 2022, to launch the first professionally-managed direct-indexing product for retail investors. Called Fidelity Managed FidFolios, Fidelity’s newest offering aims to combine direct indexing with fractional shares – opening a once capital-heavy investment strategy to any investor who can meet the $5,000 account minimum. Investors often leverage direct indexing to reduce their tax burden or implement a specialized investment strategy, enabling them to save more for retirement and build wealth faster. A qualified financial advisor can help you determine if such strategies are an appropriate option for you. Read More...

Nov 16, 2022 Retaining talented employees continues to be an issue for businesses across the economy. As employers look to improve company culture and employee benefits, equity compensation is becoming increasingly common. Although this incentive is not direct financial compensation, it allows employees to own company shares and profit from the company’s success. If you're considering a job offer or a company offer to provide you with equity compensation then you may want to ask a financial advisor if it's a good move for your financial portfolio. Read More...

Nov 16, 2022 What do Spotify, General Motors and Uber have in common? Each had an initial public offering (IPO), generating billions of dollars and loads of press. Plus, investors finally had the opportunity to buy shares in these renowned companies. IPOs can create profitable new investments – but can also be tremendous flops. Here’s what investors should know about what to expect when investing in an IPO. You can also work with a financial advisor to help analyze how investing in an IPO could impact your personal financial situation and overall portfolio. Read More...

Nov 16, 2022 Since this past Spring, Elon Musk has been trying to purchase Twitter, changing the company from a publicly traded company to a privately owned company. That deal has been done. As of Nov. 8, the company was delisted from the New York Stock Exchange. If you own stock in the company, you will want to know what happens to your Twitter shares. We cover that here. You can also work with a financial advisor to analyze how your portfolio is impacted or to help you create a new plan for your investments moving forward.  Read More...

Nov 15, 2022 Adding real estate to your investment portfolio can be an excellent way to generate strong returns and hedge against market downturns or inflation. If you’re not interested in purchasing and managing a property on your own, though, there are alternatives. Both REITs and platforms like Fundrise make real estate investing easier and more accessible to investors. However, while Fundrise may seem very similar to basic REITs, these two investment options have important differences to note. Here's what you need to know. With all the options you have to invest in real estate assets, it may make a lot of sense to work with a financial advisor as you pick such securities. Read More...

Nov 15, 2022 Adding real estate to your investment portfolio can be a smart way to diversify, boost returns and even hedge against the risk of inflation. When it comes to choosing how you’ll invest in real estate, though, there are a few options to choose from. Two of the most common real estate investment routes include rental property and real estate investment trusts (REITs). Like any investment, each of these offer their own pros and cons. Investing in real estate is undoubtedly an attractive proposition. Consider consulting with a financial advisor beforehand, though. Read More...

Nov 15, 2022 Rebalancing an investment portfolio is the process of making sure the proportion of asset types in your portfolio reflects your goals. It builds on two tenets of investing, diversification and consistency. It's a necessary process because various securities rise and fall at different rates so that over time the asset allocation you chose when you created your portfolio will change. Consider working with a financial advisor on rebalancing. Here's an overview of why, how and when to rebalance your portfolio.  Read More...

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