Mar
21
2023
What Are Asian Options and How Are They Priced?

What Are Asian Options and How Are They Priced?

By | Growing Wealth, invest, Investing | Comments Off on What Are Asian Options and How Are They Priced?

Asian options (also known as average strike options or average options) are a type of exotic option that is priced according to the average price of the underlying commodity, as opposed to the spot price.

Read on for how they’re priced, how they work, pros and cons, and more.

What Is an Asian Option?

Asian options are a type of exotic option that trade differently than standard American or European options.

American and European options allow the holder to exercise an option at a strike price known on the purchase date. They differ in when the option can be exercised.

American options can be exercised at any time up to and including the expiration date. European options can only be exercised on the expiration date.

Asian options, on the other hand, are priced based on the average price of the asset over a period of time and like European options they are exercised on the expiration date.

The various parameters of an Asian option are negotiable, but there are two different types of Asian options, average strike options and average price options.

Average strike options are sold with an unknown strike price. The strike price will be determined based on the average price of the underlying asset at selected time intervals.

Average price options are sold at a known strike price. The exercise price will be determined based on the average price of the underlying asset at selected time intervals.

In addition, both types of Asian options may be priced according to arithmetic or geometric averages.

Who Buys Asian Options?

Asian options are usually purchased to solve a particular business problem:

  1. A buyer wants to lock in an average price or exchange rate over a period of time.
  2. A buyer wants to protect against price manipulation in the market.
  3. A buyer wants to protect against volatility in the price movement of the underlying asset.
  4. A buyer wants to mitigate against inefficient pricing due to an asset being thinly traded.

How Asian Options Work

Like standard options, the price of a call or put in Asian options depends on the price of the underlying asset when the option expires. But unlike standard options, the price of an Asian option will depend on the average price of the underlying over a specified period of time.

Different kinds of Asian options will define average in different ways, so make sure that you check the details of the contract before investing. It’s common for Asian options to define average either as an arithmetic or geometric mean over a period of time.

One example might be for an Asian option to be priced as the arithmetic mean of the underlying stock’s price as measured every 30 days.

Maximum Payoff

Like standard options, the maximum payoff for an Asian option will depend on whether it is a call or put option. Even though the prices in an Asian option are determined by the average price instead of the spot price, the maximum payoff for Asian options works in the same way.

For a call option, the maximum payoff is unlimited, since there is no limit on how high the stock’s price can go.

For the purchase of a put option, the maximum payoff will be if the stock’s price goes to zero.

Maximum Loss

Losses on Asian options are limited to the premiums paid at initiation of the trade. Because of average pricing and lowering the volatility of large price swings, the purchase premiums are also typically lower than available with regular options.

Breakeven

The breakeven price of an Asian option depends on the strike price of the option and the amount of premium that you paid for the option originally. If you paid $1.50 for a call option with a strike price of $50. Your breakeven price in this scenario will be $51.50 (the strike price of 50 plus the $1.50 in premium paid originally).

If the stock’s average price when the option expires is above $51.50, you will earn a profit on the option investment.

It’s more complicated to know in advance what the breakeven will be on an Average strike option but the calculation is the same.

Finally, user-friendly options trading is here.*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

*Check out the OCC Options Disclosure Document.

Pros and Cons of Asian Options

Here are some of the pros and cons of trading with Asian options:

Pros

 Cons
Less volatility than standard options due to the averaging of the price Not supported by all brokers
Generally less expensive than standard options due to lower volatility Lower liquidity than standard options
Useful for traders who have exposure to the underlying asset over time, like suppliers of commodities More complicated to price than standard options

Asian Option Pricing

Because Asian options are priced based on an average price instead of the closing price on the date of expiration, they experience lower volatility. This makes intuitive sense, since averaging several price values over time will tend to dampen out extreme values. Because volatility is a key measure of the price of an option, the lower volatility of Asian options generally means lower prices for options.

How Asian Option Pricing Works

The pricing of Asian options is calculated using an average value. Different types of Asian options calculate the average in different ways, and it’s important to understand how the average will be calculated before you purchase the contract. The two most common ways that an average is calculated with Asian options are the arithmetic mean and the geometric mean.

Asian Options Pricing Example – Average Price Option

On March 1, you buy a 90-day call option for stock XYZ with a strike price of $50. This option costs you $1.25 and the average price is defined as the arithmetic mean of the underlying asset price taken every 30 days.

XYZ has a price of $51.00, $48.50 and $52.00 at the 30, 60 and 90 day mark. The arithmetic mean of those 3 prices is ($51 + $48.50 + $52) / 3, or $50.50. Since the option has a strike price of $50, the option closes with a value of $0.50 (calculated price at expiration less spot price, $50.50 – $50).

Because you purchased the option for $1.25 originally, in this scenario you would take a loss on the position.

As with standard options, if the average price of the underlying asset is below the strike price (for a call option), the option expires worthless.

Asian Options Pricing Example – Average Strike Price Option

On March 1, you buy a 90-day call option for stock XYZ. This option costs you $1.25 and the average strike price is defined as the arithmetic mean of the underlying asset price taken every 30 days.

XYZ has a price of $51.00, $48.50 and $52.00 at the 30, 60 and 90 day mark. The arithmetic mean of those 3 prices is ($51 + $48.50 + $52) / 3, or $50.50. Therefore, at expiration the strike price will be $50.50. The option closes with a value of $1.50 (price at expiration less calculated spot price, $52 – $50.50).

Because you purchased the option for $1.25 originally, in this scenario you would have a gain on the position.

The Takeaway

Unlike standard options that are valued based on the spot price of the underlying asset when the option expires, Asian options are valued based on an average price taken in discrete time periods before expiration.

Because the value of an Asian option is based on an average of prices, there is less volatility in the prices. Lower volatility leads to generally cheaper prices than standard options.

If you’re ready to try your hand at online stock options trading, You can set up an Active Invest account and trade options from the SoFi mobile app or through the web platform.

And if you have any questions, SoFi offers educational resources about options to learn more. SoFi doesn’t charge commissions, and members have access to a complimentary 30-min session with a SoFi Financial Planner.

With SoFi, user-friendly options trading is finally here.

FAQ

Are Asian options cheaper?

Asian options are usually (but not always) cheaper than standard American or European options. This is because Asian options are priced using an average price rather than the spot price of the underlying commodity on the date of expiration. Because an average price is used, this makes Asian options less volatile, and consequently, generally cheaper.

How are Asian options priced?

Rather than using the spot price of the underlying stock or commodity on the date of the option’s expiration, Asian options are priced using an average price over the preceding period of time. While there are different methods for calculating the average price, it’s usually calculated as either the arithmetic or geometric mean of the underlying stock or commodity.

Why can’t Black-Scholes models value Asian options?

The Black-Scholes pricing model is one of the most common ways to price standard American or European options. To price options, the Black-Scholes method makes a variety of assumptions about the price of the underlying stock. One assumption required by Black-Scholes is that the stock’s price will move following something called Brownian motion. Because arithmetically-priced Asian options do not follow Brownian Motion, the standard Black-Scholes pricing model does not apply.

Photo credit: iStock/Boris Jovanovic

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit 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.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Feb
15
2023
Options Chain: Definition & How to Read an Options Chain

Options Chain: Definition & How to Read an Options Chain

By | Growing Wealth, invest, Investing, Terminology | Comments Off on Options Chain: Definition & How to Read an Options Chain

An options chain is like a menu of all the available options contracts for a specific security. The options chain, or options matrix, shows the listed puts, calls, the expiration dates, strike prices, and volume and pricing information for the underlying asset, within a given maturity.

An options chain provides detailed quote and price information, and is usually divided into calls vs. puts and categorized by expiration date.

Understanding the Options Chain

To understand what an options chain is, you first need to understand how options trading works. With this knowledge, you can build options trading strategies and attempt to profit in the market.

Options may allow you to profit on movements in the price of an underlying asset that you don’t own directly, by giving you the right, but not the obligation, to buy or sell a stock or other asset at a certain price (the strike price) at a certain date in the future (expiration date). But options trading strategies can be quite risky and are typically undertaken by experienced investors.

While options can get quite complex, there are basically two kinds of options: calls vs. puts.

Calls are options that allow you to buy a stock at a preset price (the strike price) until some point in the future (the expiration date), while puts give you the ability to sell an option at a specific price until the expiration.

Call Options

A call option is a contract that typically allows an investor to buy 100 shares of an underlying stock or other security at the strike price. A call option can be appealing because it gives an investor a potential way to profit from a stock’s increase in price without having to pay the full price for 100 shares.

The investor pays what’s known in options terminology as the “premium” on each share, which is typically much less than the current price of the stock.

Put Options

By contrast, a put option is a contract that allows the investor to sell shares at a certain price at a specified time in the future. The seller of the put option has the obligation to buy the shares from the put buyer, if the put buyer chooses to exercise the option.

If call options are a way to profit from a stock going up in price without having to own the stock itself, then put options are a way to profit from the fall of a stock’s price without having to short the stock (i.e. borrow the shares and then buy them back at a lower price).

In-the-Money and Out-of-the-Money Options

Options can be “in the money” (ITM) or “out of the money” (OTM). The terms refer to the relationship between the options strike price and the market value of the underlying asset.

Knowing the difference between being in or out of the money allows the options holder to gauge whether they might see a profit from their option, and to decide if and when to exercise the option.

•   A call option would be in the money if the strike price was lower than the current market price of the underlying security. An investor holding such a contract could exercise the option to buy the security at a discount and sell it for a profit right away.

•   An out-of-the-money call option would be when you purchase an options contract that would allow you to buy a stock at a price higher than it is trading at right now. That means the option doesn’t have any intrinsic value. Any value the option has is based on the possibility that the price of the underlying security will go up in the future.

The reverse applies to puts. A put would be in the money if the strike price is higher than the current market price of the underlying security, and out of the money if the strike price is lower.

What Is an Options Chain?

Option chains are basically charts that list different options and the information that differentiates them. The options chain can vary, depending on who is providing it, but some of the terms can include:

•   the strike price

•   last price

•   trading volume

•   the bid

•   the ask

•   net change

Once you understand basic options concepts like calls vs. puts, an options chain will be pretty easy to read.

Then you can move on to more complicated options trading strategies like options trading straddles.

Finally, user-friendly options trading is here.*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

*Check out the OCC Options Disclosure Document.

Options Chain Example

Here is a hypothetical example of an options chain for Company ABC.

Calls for January 27, 2023

Contract name

 Last Trade Date

 Strike

 Last Price

 Bid

 Ask

 Change

 Volume

 Open Interest
ABC230127C00240000 2022-12-16 3:37PM EST 240.00 15.22 12.95 15.00 -2.58 15 54
ABC230127C00245000 2022-12-16 3:53PM EST 245.00 11.00 9.10 12.15 -3.33 68 111
ABC230127C00250000 2022-12-16 3:59PM EST 250.00 8.80 8.20 10.80 -2.55 96 175

Options chains aren’t standardized, so your options chain provider may include more or less information.

Additional information could include more detail on price fluctuations, such as percentage price changes. Some sites include information on the characteristics of the option itself, such as implied volatility.

Reading the Options Chain

Once you understand the terms listed in the options chain, it’s relatively easy to decode. Reading from left to right in the hypothetical options chain above:

•   Contract name: Just as the fictional ABC company has a stock ticker, options have an alphanumeric identifier. For instance, “ABC230127C00240000” refers to an option to buy ABC shares by January 27, 2023 for $240. In other words, this is a call option with a strike price of $240 that expires on January 27, 2023.

•   Last trade date: The date and time when the option was last traded.

•   Strike: The price at which the option may be bought (calls) or sold (puts) before the expiration date.

•   Last price: The most recently traded or posted price of the option.

•   Bid: The highest price someone is willing to pay for the option.

•   Ask: The lowest price someone is willing to sell the option.

•   Change: How the price has changed since the close of the previous trading session.

•   Volume: The number of options contracts traded the most recent day that trading has been open.

•   Open interest: These are the options contracts that haven’t been closed — meaning exercised (i.e. the stock has been bought or sold at the pre-arranged price) or otherwise settled.

How Options Chains Can Help You Trade Options

Options chains are a key tool in trading options. How they directly lead to options trading depends on how the specific brokerage you use utilize options chains, and how certain factors might fit into a trader’s overall strategy.

For example, an experienced trader would be able to gauge the market in terms of price movements and higher and lower liquidity. These are key points to know for efficient trade executions and potential profitability.

For example, a trader wanting to assess market conditions for the first call option in the matrix above, might consider the last price, the bid, ask, and net change.

Any brokerage that allows you to trade options will provide the type of information seen in an options chain, as it is necessary for options to be priced and for investors and traders to make informed decisions about options trading.

Brokerages typically also have various deposit and educational or knowledge requirements for options trading as well.

The Takeaway

Options are highly complex derivatives, and investors need to be skilled and experienced enough to digest a series of critical data points in order to have an effective options strategy. One tool that can be effective for traders is using an options chain, or options matrix.

An options chain is similar to a master list of available options contracts for a specific security (the underlying). It shows the puts, calls, expiration dates, strike prices, and volume and pricing information for the underlying asset. By reading these charts, traders can decide which options fit their strategy.

If you’re ready to try your hand at options trading, SoFi can help. You can trade options online from the SoFi mobile app or through the web platform. And if you have any questions, SoFi offers educational resources about options to learn more.

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit 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.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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Jan
10
2023

Investing Survey: 85% of Investors Plan to Change How They Invest in 2023

By | Growing Wealth, invest, Investing | Comments Off on Investing Survey: 85% of Investors Plan to Change How They Invest in 2023

We don’t need to tell you that 2022 has been a challenging year for investors — what with interest rates soaring, the stock market plummeting, and the onset of another crypto winter.

What you might be surprised to know: There’s some good news here. In a recent survey, we asked 1,000 investors how they managed their portfolios in 2022, how they’re feeling about the market, and what their predictions are for 2023*.

While you might expect some anxiety or pessimism (and there was some), investors overall remain positive after a difficult year. Here’s what they had to say about stocks, crypto, how they coped with investing stress — and more.

Note: We rounded percentages to the nearest whole number, so some data sets may not add up exactly to 100%.

*The survey was completed on October 5, 2022 and was conducted using a general U.S. population data set of 1,000 adults age 18 and older. Survey did not include known SoFi members or a SoFi member data set.

Key survey facts and findings

2022 SoFi Investing Survey

Before we dig into the details, here are some of the standout results.

•  93% of survey respondents continued to invest, despite the current market conditions.

•  Men were more likely to invest than women, and invest more money as well.

•  78% of crypto investors are generally optimistic that values will rebound.

•  And remarkably: 1 in four (25%) of investors had no regrets about 2022

Last highlight: How did investors cope with stress in 2022? Hobbies!

In general, investors stayed the course in 2022.

While the market hasn’t been kind to investors over the past year, it certainly hasn’t stopped many of them from investing. 93% of our respondents kept invested in 2022.

2022 SoFi Investing Survey

93% of respondents have invested in 2022

When it comes to the amount people have invested so far this year, men were more likely than women to invest — and invest more money when they did:

•  $0 – $499: 24%

◦  Male: 44%

◦  Female: 56%

•  $500 – $999: 23%

◦  Male: 50%

◦  Female: 49%

•  $1000 – $4999: 26%

◦  Male: 57%

◦  Female: 43%

•  $5000+: 21%

◦  Male: 68%

◦  Female: 32%

Many investors are still hoping to cash in on crypto.

It’s no secret that the crypto market has taken a beating, especially with the crash of FTX . Nonetheless, people are still holding on to their crypto investments.

45% of respondents say they have cryptocurrency in their portfolios. 65% of them even said they invested more than $500 in 2022. Most crypto investors (65%) are male and under the age of 55.

45% of respondents have cryptocurrency in their investment portfolio.

Over the past few years, cryptocurrency has become a more widely-accepted investment vehicle. Many investors have invested in crypto this year. Of these investors:

•  65% have invested $500 or more in 2022

•  Less than 3% haven’t invested any money into crypto in 2022

•  Only 7% of respondents aged 55 or older are invested in crypto

•  65% are male

And of those who invested $5000 or more in crypto in 2022, 80% are male.

While the crypto market is currently in a steep decline, most investors with cryptocurrency in their portfolios have invested at least $500 in 2022. Here’s what crypto investing looks like in 2022.

•  $0 – $499: 32%

•  $500 – $999: 23%

•  $1000 – $4999: 26%

•  $5000+: 16%

Only 3% of investors who have cryptocurrency in their portfolio haven’t invested anything into cryptocurrency this year.

78% of investors are either confident or cautiously optimistic the crypto market will bounce back

2022 SoFi Investing Survey
The crypto market remains volatile as rumors of a global recession continue to swirl. Despite this financial climate, most investors are hopeful of the future.

Of the 45% of respondents who have crypto in their portfolio:

•  78% of investors are at least “cautiously optimistic” that the crypto market will bounce back

•  Only 5% of respondents believe crypto is “dead.”

Overall, the crypto market still has plenty of believers. Whether that optimism will pay off remains to be seen.

Nearly 90% of people have invested in non-stock market-related assets.

2022 SoFi Investing Survey

Non-traditional market assets are on the rise due to stock market volatility. In fact, nearly 90% of our respondents invested money into a non-stock-market-related asset. Crypto was the most common non-traditional investment choice.

Certificate of deposits (CDs), Real estate investment trusts (REITs), and gold were the next most popular options. One respondent even told us they invested in Magic the Gathering trading cards—definitely a niche investment choice, but representative of investments that aren’t directly impacted by the stock market.

Here’s a full list of all the responses we received:

•  Certificate of deposits (CDs): 24%

•  Real estate investment trusts (REITs): 20%

•  Gold or other commodities: 20%

•  Crypto: 48%

•  Private equity funds: 22%

•  Government bonds: 19%

•  Other or none: 11%

Here’s what investors’ portfolios look like right now.

2022 SoFi Investing Survey

Nearly a third (32%) of respondents have less than $25,000 in their investment portfolio. Here’s a breakdown:

•  $0 – $24,999: 32%

•  $25,000 – $49,999: 22%

•  $50,000 – $99,999: 21%

•  $100,000 – $199,999: 12%

•  $200,000+: 14%

Most investors (nearly 75%) also invest highly into stocks. Cryptocurrency, mutual funds, and cash were the next most popular investment types.

•  Stocks: 72%

•  Cryptocurrency: 45%

•  Mutual funds: 41%

•  Cash or cash equivalents: 38%

•  Bonds: 31%

•  Exchange-traded funds (ETFs): 30%

•  Real estate: 23%

•  Index funds: 21%

•  Private equity: 14%

•  Other: 2%

Market volatility has impacted investors’ purchase and investment decisions.

Market volatility has impacted investors at all ages and stages, but it hasn’t slowed them down. Not only have many people continued to invest during these uncertain times, market volatility has inspired investors to adjust their strategies and spending.

More than a third of respondents (37%) say market volatility has caused them to make impulsive investment decisions.

2022 SoFi Investing Survey
Market volatility has caused some investors to respond emotionally, with over a third of respondents (37%) saying market volatility has caused them to make impulsive investment choices.

31% of these impulse decisions were made by investors aged 18-24. In fact, the younger you are, the more likely you are to make impulsive or emotion-driven financial decisions. Here’s the age breakdown of those who made an impulse move due to market volatility:

•  18-24: 31%

•  25-34: 23%

•  35-44: 23%

•  45-54: 17%

•  Older than 54: 7%

Of all the people who made impulsive investment decisions, 54% of our respondents say they’re happy with their choice. Specifically, only 20% of them regret them.

Maybe these rash decisions taught investors important lessons about the market. Maybe some are confident they’ll rebound.

One third of respondents (33%) had to cancel or delay plans or purchases in 2022 because of money lost on investments.

Many investors’ finances were impacted by the bear market: 33% said they had to cancel or delay plans in 2022 because they lost money on investments.

Ultimately, these mistakes prevented some investors from going on vacations, buying homes, and starting businesses. When we asked those who had to cancel or delay plans specifically which plans were impacted, here’s what they said:

•  Going on a trip: 27%

•  Making a major purchase (home, vehicle, etc.): 22%

•  Home renovations: 19%

•  Starting a business: 15%

•  Growing my family (getting married, having a baby, etc.): 10%

•  Retiring: 6%

•  Other: 2%

Over half of respondents did not make any major investment changes.

2022 SoFi Investing Survey
Market volatility still isn’t scaring investors away. Over half, or 55% of respondents held on to their assets during this year’s economic crisis.

When we asked investors how they reacted to market swings this year:

•  29% said they bought a lot of investment

•  17% said they sold a lot of investments

•  55% said they did not buy or sell investments

The investors that did sell some of their assets (45%) ultimately relinquished less than half of their portfolio. Only 7% sold 76% or more of their total investments.

Many investors have investment regrets about 2022 and are looking toward 2023.

With 2023 on the horizon, many investors are planning to adjust their strategies based on the lessons they learned this year.

People are split on how inflation makes them feel about their investment strategies in 2022:

Inflation can be a thorn in the side of investors. Our respondents were split in how they approached inflation in 2022:

•  39% of respondents said they want to invest more, despite inflation.

•  33% said inflation makes them want to leave their investments alone.

•  28% said inflation makes them want to invest less.

Of the 39% who want to invest more, Gen Z appears to be the most optimistic (27% of that subgroup are between the ages of 18 and 24).

One thing is for certain — confident investors will continue to engage with the market despite inflation.

In general, people have mixed emotions about their investments in 2022, but the most common feeling was optimism (26%).

2022 SoFi Investing Survey

There was also some variance in how respondents feel about their investments. Most were optimistic, and fewer felt stressed, disappointed, and content.

•  Optimistic: 26%

•  Stressed: 19%

•  Disappointed: 19%

•  Content: 15%

•  Excited: 14%

•  Regretful: 5%

•  Angry: 3%

Very few felt regretful or angry, which could be welcome signs of more market participation in the coming year.

While 5% of respondents feel regretful, a full 25% — or one in four investors — have zero regrets about 2022.

That said, 75% of respondents have some type of investment regret this year. And many have learned major lessons this year. Mainly, many wish they had bought more assets at lower prices.

Some of the most common investing regrets respondents expressed:

•  They should’ve bought more crypto when prices were at their lowest (18%)

•  They should’ve bought more stock when the market started to decline (16%)

•  They should’ve sold stock before the market started to decline (15%)

Not everyone was regretful about their investing activities: As noted, 25% of respondents have no regrets at all. And of those that have no regrets, 60% are 45 or older.

Here’s the breakdown of the investment regrets respondents had this year:

•  I have no regrets: 25%

•  I should have bought more crypto while prices were their lowest: 18%

•  I should have bought more stock when the market started tanking: 16%

•  I should have sold stock before the market started tanking: 15%

•  I should have sold my crypto early in the year: 10%

•  I should have bought gold: 9%

•  I should have held onto stock when the market started tanking: 7%

People use a variety of tactics to cope with the stress of market fluctuations:

We got a lot of interesting responses about how investors have dealt with the stress that came from market fluctuation.

•  41% took their mind off their portfolios by engaging in hobbies.

•  37% did their own investment research.

•  31% of them simply stopped checking their balances.

•  22% of respondents talked with their brokers for reassurance. 17% participated in online forums.

And on a positive note, 14% said the markets simply didn’t stress them out.

Nearly a third of respondents (30%) check their investment portfolios every day. And 75% check at least once a week.

Although one coping mechanism of market stress was to avoid checking balances, 30% of our respondents (65% of whom were male) check their investments every day.

Most respondents check their portfolio’s performance at least once a week. Here’s how often investors are checking their investment performance.

•  Every day: 30%

•  2 to 3 times a week: 29%

•  Once a week: 17%

•  A few times a month: 12%

•  Once a month: 7%

•  Less than once a month: 7%

Looking forward to 2023

2022 is almost over and many investors are already looking forward to next year. Let’s see how our respondents plan to adjust their strategies in 2023.

85% of respondents plan to make some changes to how they invest in 2023.

While most respondents have agreed to change their plans, 21% of them want to invest more into the market.

Here are other ways people plan to change their investment strategies next year:

•  19% plan to do more of their own investment research

•  14% plan to work with a financial advisor

•  10% plan to buy into a new type of investment

•  9% plan to change the asset allocations in their portfolio

•  6% plan to decrease how much they invest overall

•  5% plan to use a robo-advisor or automated investing

•  15% don’t plan to change anything.

If this year has taught investors anything, it’s to adapt their strategies and stay optimistic. When asked how they planned to change their strategies, here is how investors responded.

Key Takeaways

Historically, market volatility tends to even itself out, and investment values typically rebound. Investors’ attitudes and behaviors tend to mirror this pattern. While markets have been low in 2022, there are signs of recovery as the year draws to a close, and people appear to be optimistic about an upswing and plan to continue investing.

If you’re ready to take advantage of buying when the market is low, online investing with SoFi Invest is an easy way to get started.

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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit 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.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

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.

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Understanding Stock Market Corrections

By | Growing Wealth, Investing | No Comments

A stock market correction occurs when the market hits a new high, and then falls by at least 10%. A correction is similar to a dip or crash, but not as severe as a “bear market,” which is when the market sees a decline of 20%.

Stock market corrections are normal and it’s important to be aware of why they happen and what you might consider doing the next time the market sees a correction.

What Is a Market Correction?

A stock market correction happens when the market reaches a new interim high and then falls by 10%. Some other stock market terms for market downturns include dips or crashes, which may be temporary or quick drops in the market that don’t see the market fall past 10%.

Corrections vs Bear Markets

A bear market is a longer decline in the stock market, and refers to the market after it declines 20% from a previous high. These terms can also apply to individual stocks (“Stock X is in correction territory,” for example), but individual stocks can see much more volatility than the overall market.

The most severe stock market correction in history, in terms of points, happened in 2018, when the Dow declined 1,175 points in a single day. Previously the record had been a 777-point decline. However, the 2018 4.6% drop wasn’t the biggest decline in terms of percentage. In 1987, on a day called Black Monday, the Dow dropped by 22%. That would be equivalent to 5,300 points in today’s market.


💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

The Nature and Frequency of Market Corrections

Stock market corrections happen every once in a while. They are, in fact, a normal part of the market cycle — that’s important for investors to keep in mind, as it’s not unusual at all for the market to experience a correction.

How Common Are Market Corrections?

Dating back to the mid-1900s, stock market corrections have typically happened three to four times every year. Although it’s nerve-wracking every time, these corrections are a normal part of the market cycle, as mentioned.

Duration and Impact of Corrections

When a correction occurs, you will likely see the media speculate whether it’s a crash or a correction, how long the correction will last, and perhaps, if the economy is going into a recession. This speculation is just that — here is no way of knowing exactly how big a correction will be or how long it will last.

A stock market correction is not typically the cause of a recession, nor is it a predictor of a coming recession. Stock market corrections can be stressful for investors and companies, but they are not necessarily signs of a poor economy.

Although there is no way of predicting how long a market correction will last, you can look to past data as some indicator of possible trends. For example, since the 2008–09 financial crisis, the past four corrections have had an average decline of 15.3% over a time period of three and a half months.

Navigating Through Market Corrections

Given that market corrections are common, investors would do well to know how to handle them. That may or may not involve making any changes to your portfolio.

Preparing Your Investments for a Correction

Unless you exclusively own stocks in an S&P 500 index fund, your portfolio will perform differently from the overall market. When a stock market correction occurs, the percentage drop is generally referring to the performance of the S&P 500 index. This is an index of the largest U.S. companies in the stock market.

The stocks in your portfolio may fall in value more or less than the overall market. Some of your stocks may even go up in value. It’s important to remember that if your portfolio drops by a certain percentage, it will need to go up more than that percentage to recoup your losses.

Strategies for Investing During Corrections

Generally, a good rule of thumb is to stay invested through a market correction — or, stick to a buy-and-hold strategy. If, for example, someone sells off their stocks during a panic, they could see them go back up in value again in a few days or weeks. If anything, depending on your strategy and goals, you may want to consider buying stocks during a market correction, because prices will have lowered.

You could consider whether you have available funds you’d like to invest during a downturn, and decide if you want to purchase more shares of stocks you already own or if you want to find new stocks to buy. Diversifying the stocks in your portfolio may help you weather the storm of a market correction.

If you do choose to purchase stocks during a market correction, be aware that their value may continue to decline before it recovers again. There’s also no guarantee that it will.

Also remember that the market has bounced back from some severe corrections and crashes over the years. Corrections happen every year and can be healthy for the market.


💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.

Identifying Causes and Signs of Market Corrections

There can be numerous reasons that the market experiences a correction. And they typically can’t be predicted with any real sense of accuracy.

Key Factors Leading to Corrections

Since so many things could potentially lead to a market correction, it’s hard to say with any certainty what, exactly, is or was the catalyst. But generally, things like rising prices (inflation), slow economic growth, bad or disappointing corporate earnings reports, or even surprising news — say, a war breaks out, or some sort of political upheaval takes place — can cause the market to see a steep decline into correction territory.

Can Market Corrections Be Predicted?

As mentioned, market corrections can’t really be predicted. While it’s almost certain that there will be corrections in the future, discerning when, exactly, they’ll happen is nearly impossible — nobody has a crystal ball.

Coping With Market Corrections as an Investor

Market corrections are going to happen — it’s a near certainty. But that doesn’t mean investors need to panic every time the market has a hiccup.

What to Do During a Market Correction

The first step in knowing what to do during a stock market correction is to find out why it’s happening — if possible. Next, look into your individual portfolio and see how it’s being affected by the correction. This will help you decide whether to buy, sell, or hold on to the stocks in your portfolio.

Remember that stock market corrections are normal. If you have a long-term investing strategy, you will likely see market corrections, bear markets, and recessions during your years of investing. Try to stay calm and reconsider decisions that might be made based on fear or panic. It may not help to obsess over the value of your portfolio on any particular day.

Long-term Strategies for Handling Market Volatility

In terms of handling market volatility over the long term, here are some things and overarching principles investors can try to incorporate into their investment strategy.

•   Have a plan: Blindly buying stocks and then getting upset when they fall in value isn’t ideal. Know what your goals are and plan for them. Even when the market corrects, you can still reach your goals for the year if you plan properly. If you’re investing money to use in just a few months versus for your retirement, your strategy may look very different.

•   Diversify: One way to protect yourself from significant market crashes is to spread out investments over different types of assets. This is called diversifying your portfolio, and this tactic may help lower your risk of losses while still exposing yourself to potential gains. You can diversify into many different types of investments, including bonds, real estate, commodities, and simply by holding cash.

•   Consider cashing out: Investors can be afraid to cash out of a particular stock because it may continue to rise in value. If you own a stock which has gone up significantly, you may want to cash out some of the investment and diversify it into other investments.

•   Keep risk tolerance in mind: If you are growing your portfolio for long-term use, you can likely handle a few ups and downs in the market cycle. However, if it causes you too much stress to see your portfolio go down in value a lot in one day, perhaps it’s better not having so much invested in stocks.

•   Don’t try to time the market: On the same note, selling off your investments because you think the market is going south may not be a great strategy. The stocks you’re holding may continue to go up in value, and even if they do crash, trying to time your reentry can be just as challenging as timing your exit.

•   Think long term: Day trading and short-term investing are risky. If you build a diversified portfolio which you plan to keep invested for a long time before using it, it may be able to withstand cycles in the market and still continue to grow.

Real-World Examples of Market Corrections

As noted, corrections are common. In fact, the S&P 500 entered correction territory three times during 2022. It also happened more than once in 2023, and as of writing, the most recent market correction occurred during October 2023, as the market slid for a few months after topping out at a previous high in July 2023.

In December 2023, the market rebounded, and was near all-time highs.

The Takeaway

Stock market corrections are when the market falls 10% from a previous high, and they’re common parts of the market cycle. As you build your portfolio and mentally prepare for the next stock market correction, remember that you are not alone. Market crashes, dips, and corrections are stressful for everyone, and there are tools and specialists to help you navigate them.

Working with an investment advisor may help you stay calm throughout economic cycles. Planning your portfolio for diversification and long-term growth may also help you ride the waves of the market.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What happens in a stock market correction?

During a stock market correction, the market slides at least 10% from a previous high due to any number of factors.

Are corrections good for the stock market?

Corrections can be good for the stock market in a similar way that a wildfire can be good for a forest — they can serve as a reset to valuations that may have gotten too high, and lower security prices for investors looking to deploy capital.

How long do stock market corrections last?

There’s no telling how long a correction could last, but it’s important to keep in mind that historically, the market has always bounced back given enough time.

What is the biggest stock market correction of all time?

The biggest drop in the S&P 500 in a single day was in October 1987, when the index fell more than 20% into a bear market.

How often should you expect a stock market correction?

Since the 1950s, the S&P 500 has experienced dozens of market corrections, and that means that one occurs less than every two years, on average.

How many corrections have there been throughout history?

In the modern era, since World War II, the stock market has experienced 24 market corrections, with an average market drop of more than 14%.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit 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.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.

Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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Do I Need a Financial Advisor? Essential Considerations

By | Growing Wealth, Investing | No Comments

Financial advisors can help their clients to define their financial goals, prioritize them, and develop a plan to achieve them. But depending on the specific individual, a relationship or level of engagement with a financial advisor can vary, as different investors have different needs.

Generally, deciding whether you need a financial advisor will come down to whether you feel you need some advice or a guiding hand in handling your finances. There are important considerations to make, too, as financial advisors don’t typically work for free — but they can help with a variety of finance-related issues.

Understanding the Role of Financial Advisors

Financial advisors can offer many services, but broadly, they’ll dissect a client’s financial picture, discuss their goals with them, and create a plan as to how to move forward.

What Financial Advisors Do

Financial advisors can help clients zero-in on specific financial goals, put together plans for investing or getting out of debt, and more.

An advisor can provide financially based education, which can help their clients identify whether they’re on track for achieving their goals. They can also help clients determine whether their habits are causing problems for their overall financial wellness.

Further, financial advisors can guide their clients through paying off debt, saving for the future, investing in a diversified portfolio, and aligning an investment approach with specific goals, timelines, and risk-tolerance levels.


💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Assessing Your Need and Readiness for a Financial Advisor

There are numerous things to consider when trying to determine if you’re ready or in need of a financial advisor and their services.

When to Consider Hiring a Financial Advisor

As clients make their decision about whether to use a financial advisor or not — and, if so, which one will offer what they want and need — here are some items they could consider:

•   What type of help is needed from an advisor? Education? Coaching? Management?

•   What services can the financial advisors provide?

•   How well does this match up with your specific needs?

•   How does the advisor charge? In other words, how does your advisor get paid?

•   What context can be provided about fees? How does a percentage translate into real dollars, both today and in the future?

Evaluating Net Worth, Earnings, Spending, and Financial Goals

It’s important to note that not everyone’s financial situation will warrant professional financial advice. As such, you’ll want to take some time to try and evaluate your net worth, earnings, and goals — do you feel that you can keep a grasp on those aspects of your financial picture? Or do you feel like you’re in over your head?

If you feel like you could use some advice, then it may be a good idea to reach out to a financial professional and see how they may be able to help.

Life Events and SituationsThat Warrant Professional Advice

Also keep in mind that your situation will change over time. You may get a new job, a big promotion, or a big raise — all of which can drastically change your financial situation. In such cases, if the change is significant enough, it could be a good idea to reach out for guidance.

Types of Financial Advisors and Their Services

“Financial advisor” is a broad term that describes several different specialties. Accordingly, it can be helpful to understand the different types of financial advisors out there.

Different Financial Advisor Specializations

Here are some (but not all) of the different types of advisors:

•   Certified professional planners (CFP®): CFPs are advisors who’ve earned a specific designation, and that can help people with a large range of financial services.

•   Wealth managers: Wealth managers take a broad approach to helping individuals with their finances, and typically offer a range of services.

•   Investment advisors: Investment advisors focus on providing advice and management related to investment portfolios.

•   Retirement planners: Like investment advisors, retirement planners tend to focus on a specific area of a person’s financial picture: Retirement.

Choosing the Right Type of Advisor for Your Needs

The specific type of financial advisor that is a good particular fit for any individual will vary depending on the person’s specific situation. As such, there’s no “one-size-fits-all” for financial advisors, and you’ll likely be best off giving some serious thought as to your needs, and how an advisor can help you.

It may be worth speaking with several different advisors to get a better sense of how they could help, and then making a decision as to which, if any, to work with.

Understanding Advisor Fees and Payment Structures

There are many types of fees and payment structures that may apply to financial advisors.

Commissions

When advisors are compensated on a commission basis, they receive pay based on the products they sell. The amount of commission paid can vary widely depending upon the product and the company.

Multiple arrangements can exist for advisors paid on commission, including receiving a percentage of a client’s assets before money is invested or being paid by the financial institution involved after a transaction takes place. Or, the client might be charged each time that stocks are bought or sold.

Advisory Fees

When an advisory fee is charged by the advisor, the general charge for the client is a percentage of the assets they manage. It’s reasonable to expect that an advisor can explain the reasoning behind the fee being charged, given a client’s specific circumstances — and if it’s higher than expected, it’s also reasonable to ask what added value the client is receiving.

Perhaps, for example, the advisor also helps with tax planning, or estate planning. They may be investigating a client’s financial vulnerabilities or otherwise going beyond standard money management services.

Actively managed portfolios may come with a higher fee because the advisor may charge more for putting more effort into getting the best value for their client.

Planning Fees

With this type of fee, the advisor would charge an upfront fee, or a subscription-based one, to provide either a financial plan or ongoing advice. As a potential client considers financial advisors, they may find themselves talking to someone who charges a fixed planning fee to create an initial plan and then uses a different fee structure to actually manage the portfolio. What’s most important is to be clear about what will be charged, and how.

Hourly Fees

In this case, the financial advisor charges a straight hourly fee for their services. On the one hand, having an advisor charge an annual fee means that a client may not need to worry as much that their advisor is recommending products because of the income the advisor would earn off of that recommendation.

Choosing a financial advisor that charges per hour can be costly, though, especially if more investigation needs to be done to find a product that fits a client’s needs. This may or may not be a huge concern, but if resources are limited these fees can potentially be hefty.

How to Choose the Right Financial Advisor

There’s no “right” financial advisor for everyone, but there can be some who may be better fits for your specific situation than others.

Tips for Finding and Selecting an Advisor

Starting broadly, it can be helpful to try and discern what types of services you need, or what type of advice you think would be most beneficial. From there, you’ll want to winnow down the types of advisors you’re looking for — you can review the short list above, or dig even deeper — and think about how those types of advisors can address your needs.

Then, consider the fees and costs, also as discussed. Some may not necessarily be worth the cost of retaining their services — but again, it’ll depend on the individual.

You can also look at, or search for advisors through various trade groups — there are many for financial professionals. It can be helpful to narrow down your search to a few selections, meet or interview them, and then make a decision.

Red Flags and Key Factors to Consider

A few things to look out for when you’re shopping around for financial advisors or planning services: Conflicts of interest, a lack of credentials or qualifications, and high-pressure sales tactics. While these aren’t necessarily deal-killers, they can be things to look out for. And remember, if you feel uncomfortable, you can always move on and talk to other advisors – there are hundreds of thousands of them in the U.S.!


💡 Quick Tip: The best stock trading app? That’s a personal preference, of course. Generally speaking, though, a great app is one with an intuitive interface and powerful features to help make trades quickly and easily.

Working with a Financial Advisor

Working with a financial advisor should be a rewarding experience. Here’s what to expect.

What to Expect in the Relationship

You should anticipate that your relationship with your advisor will be close — but not too close. They’ll take a hard look at your finances, consider your goals, and (hopefully) do their best to give you actionable advice and guidance. They may not want to get too personable, though, as emotion can enter the picture and make the process a bit murkier.

You should be ready to share fairly detailed aspects of your financial life, your career, family and personal goals, and more. That may be uncomfortable for some, but it’s important for an advisor to get the whole picture and map out a way to help you reach your goals.

The Takeaway

Financial advisors help individuals reach their financial goals by offering advice and guidance. There are many different types of financial advisors, and many different ways in which they are paid or charge for their services. As such, there’s no catch-all “financial advisor,” and not every type of advisor will be right for each individual.

For that reason, it’s important that you take the time to figure out your needs, and determine what type of advisor, if any, is the best fit for your situation. It may take some time to figure it out, but if you want the most bang for your buck, it could be worth it down the road.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Is it really worth having a financial advisor?

It can be worth having a financial advisor, but it’ll ultimately depend on each individual. Some people may not feel that an advisor is worth it, while others will say the opposite – there’s no clear, one-size-fits-all answer.

Does the average person need a financial advisor?

Whether someone needs a financial advisor depends on several factors, and while many “average” people feel they can handle their finances perfectly fine without a professional, others might not.

Do I need a financial advisor for my 401(k)?

You don’t necessarily need a financial advisor for a 401(k), but they may be helpful if you want to add an element of active management into the mix. That said, not everyone will feel that they need an advisor to oversee or help manage one retirement account.

Why don’t people use financial advisors?

Some people may not want to use financial advisors because they don’t feel that they have enough money or wealth to warrant it, and because they want to avoid the fees and costs associated with professional advice.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit 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.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.

Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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