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Apache is functioning normally

June 16, 2023 by Brett Tams

This monochromatic Parisian apartment brings new meaning to the idea that your home should be your oasis. Decked in various shades of the same custom gray hue dubbed “craie,” is gorgeously soothing, sophisticated and full of fluidity and detail. This balance of making a modern space look cozy and inviting has been on the top of our must-master list for a long time. So when we got the chance to pick the designer, Guillaume Alan’s brain about transforming this apartment into a work of art – poetry even – we jumped on it. There are some great pointers in our interview, so get ready to take notes!

About The Space

For this particular project, it was really a meeting between the uniqueness and perfection of the homeowners and of the place and me, both trying to reach excellence while sharing a common passion for Asia. Two apartments were joined together and we did a complete renovation of the space to follow the light and sun during the day. Everything has been designed with a calm and relaxing [mood in mind] according to the owners’ needs.

Purity is a way of life. I think this is exactly what this project embodies. This space can be summed up in three words: luxurious, calm and poetic. It has a feeling of great simplicity and absolute purity. It’s austere yet there is no coldness, as we know how to add softness with a discreet range of tones and monochromatic shades. The architecture, as well as the decor, gives birth to a calm, pure space where luxury and rigor coexist without being ostentatious.

His Favorite Element

I think [my favorite piece is] the Tamon ensemble. It’s a long dining table that has a monastic and very pure aspect about it and you can see that from several points of view. I was inspired by calligraphy drawings, so we started from a calligraphy piece – drawings with a fine brush that are very gentle and convey movement – and actually incorporated it by cutting it into the material. The result was that we managed to give this specific piece a nobility that is both vibrant and sophisticated though the use of the calligraphy, through the proportions of the table and through the mat satin finish.

On Monochromatic Decor

The tone in the whole space is a very light grey, we call “craie”, our very own bespoke color, which is represented in the entire apartment on different materials and textures (walls, ash wood, corian, silk curtains, wool, pattern fabric in wool and silk, linen rugs). It gives a very harmonious feeling to the space and a certain depth as each surface captures the light differently.

For example, the way the very “crunchy” curtains in silk capture the light creates a beautiful contrast in texture with the very modern Corian material of the dining table. The silk curtains are totally bespoke, handmade by a parisian seamstress who follows the same rules as Haute Couture manufacturing.

Design Advice

Remember 5 words:

Timeless: I am very attached to the tradition of French classicism, but I am trying to rewrite it using pure lines. When I launched my first collection, it was 18th century architecture and furniture with a 21st century style. I choose this aesthetic because I know it will never go out of style, it’s timeless.

Serenity: In a very quick world and when lives are very busy, it is so important to have havens of peace that are calming and pure. Think soft monochrome color palettes and degraded shades.

Elegance: This is fundamental to a beautiful home or apartment. I use it in all aspects of the design process: in lighting, in materials, in shapes, in colors. When decorating your home, always have elegance as your main focus.

Precision: Although in many ways simplicity is very hard to achieve, precise simplicity is what makes a stunning interior. Perfect and simple lines executed with precision. Incorporating hard-to-find pieces and working hand in hand with the most advanced craftsmen to select the wood and perfect finishes all tie back to a passion of precision.

Poetry: Just because forms are pure and structured and austere, doesn’t mean a space has to feel cold. It’s always about balance, alchemy. Try to bring softness and poetry in to arouse emotions. I think this is this stamp of our work and interiors.

So what do you think?? So good, right?! We’re literally keeping bits of Guillaume’s interview in plain view as daily decorating reminders. The idea that elegance should be a main focus in design really resonated with us. Personal style evolves and after going through more room facelifts that one wants to admit, I’ve noticed that the pieces that I keep all have a special and timeless quality to them. And while it can be really difficult to execute, curating with the precision Guillaume talks about is something we all could be more aware of when choosing a new piece for a space. It sure would save a lot of money over the years and help to create the oasis we’re all looking to come home to!

images c/o Guillaume Alan

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Source: apartment34.com

Apache is functioning normally

June 16, 2023 by Brett Tams

There has been a seismic shift in the mortgage industry, and it has redefined how mortgage originators must approach the new market, as mortgage rates have more than doubled from their 2022 lows. Over the past few years, 90% of new business has come from refinances, but the landscape has flipped, and we are in a purchase product-driven market, forcing the entire industry to be agile and adjust to a new normal.

In a rising rate environment, we often see the industry hone in on the ultra-competitive business of trying to get the lowest rate possible. While this may work in the agency space, the low number of borrowers in the market means many originators are stuck with navigating half, or less than half, of the volume they were doing last year. Because of this, more and more originators are turning to the non-qualified mortgage (non-QM) sector to grow their pipeline and revenue.

The challenge is that the rate-chasing game doesn’t apply in the non-QM space. Rather, relationships and referrals are the keys to success. In order to foster these relationships and better serve borrowers, originators must work with trusted lenders with expertise in this niche sector.

Non-QM loans can lead to more referrals

The current housing market has necessitated a new approach for mortgage professionals who want to increase the number of loans on their desks. Non-QMs could present a new revenue channel for the originators facing reduced loan volume.

In recent surveys, about 75% of originators claimed not to have originated a non-QM loan in the past 12 months — or ever. Yet non-QM loans continue to grow as an overall component of the purchase market.

Non-QM loans allow originators to serve a largely untapped market and expand their offerings to realtors and borrowers. In times when overall industry transactions are dwindling, non-QM loans can drive new business and open the door to a new subset of potential clients.

For example, self-employed borrowers often struggle to show substantial income and don’t qualify for agency products, and are a great niche to complement your existing business. An originator who’s well-educated in non-QM products can utilize their expertise to stand out among industry peers, connect with new agents who are key referral sources, and build on their network.

What matters in non-QMs is not the lowest rate — it is the best service and the ability to deliver quickly. Given the individuality of each non-QM loan, working with a trusted originator who understands this space is critical. Surety of execution is critical to building relationships, and unlike in the agency space, it isn’t black and white. That’s why, if you’re going to add non-QMs to build new relationships and grow your referral base, you need to work with a trusted lender and not go for the lowest rate.

Many novice non-QM lenders have popped up in recent years, and one mistake could cost you an important referral partner or ruin a relationship with a long-standing contact.

The right technology isn’t a perk; it’s a necessity

Differentiation requires a combination of exceptional service, unique value propositions, and effective communicating of your expertise. Excellent client service and surety of execution are pillars of a successful originator’s business, but technology has increasingly become a necessity in the mortgage industry.

In the non-QM space, technology has advanced rapidly since the beginning of the pandemic— nearly to the point where leaders in this space could help process and qualify non-QM borrowers as fast as qualified borrowers. Document management systems and automated prequalifying tools can streamline your processes and make them more efficient, potentially allowing you to get back to borrowers in hours, not weeks.

This, in turn, improves the overall customer experience by reducing paperwork, speeding up approvals, and providing a seamless digital interface. Clients appreciate a smooth and hassle-free mortgage process, which can lead to positive reviews, referrals, and repeat business.

If you think non-QMs are still a paper-and-pen business, think again. You are an originator and technology is your friend. If you are going to turn to non-QMs to help drive business, work with a lender that has the tech stack that makes your life — and ultimately your client’s life — easier.

The next steps for success

In order to excel in the transforming mortgage industry, originators must shift their focus back to the basic business principle of customer service. Ongoing volatility in the market will continue to reshape the needs and demands of buyers, resulting in a call for mortgage professionals to rise to new challenges and deliver better service.

Overall, utilizing good technology and establishing partnerships with trusted originators can be significantly beneficial in expanding networks and winning new business. By leveraging efficient processes, accessing a wider range of products, and enhancing credibility, originators can position themselves as reliable, tech-savvy professionals in the mortgage space, attracting more clients and fostering long-term success.

Tom Hutchens is the executive vice president of production for Angel Oak Mortgage Solutions. He has more than 25 years of experience in leading sales for a wholesale and correspondent lending platform and with proven success in expanding a lending footprint nationwide.

Source: housingwire.com

Apache is functioning normally

June 16, 2023 by Brett Tams

Despite a 40% year-over-year increase in market share to 1.4% during the first quarter of 2022, Doma Holdings was unable to produce a net profit.

During the first quarter of 2022, Doma recorded a GAAP net loss of $50.026 million, compared to a net loss of $11.8 million a year prior. In addition, the title insurer’s revenue was down 12% year over year from $127.8 million in Q1 2021 to $112.2 million in Q1 2022.

Executives attributed the lower revenue and increased net loss to an overall downturn in the mortgage market.

“In the first quarter, the mortgage market rapidly readjusted with refinance transactions down industry-wide by 63% year over year, per the Mortgage Bankers Association,” Max Simkoff, the CEO of Doma, said during the firm’s first-quarter earnings call with investors on Tuesday. “Based on the recent trend in rates it is likely we will see a continued negative impact on the overall mortgage market. While the market could always change for the better, we believe the challenges the mortgage market faces will continue at least through the rest of 2022.”

In the first quarter of 2022, Doma opened 35,192 title orders and closed 27,347 orders, compared to 41,084 opened orders and 32,650 closed orders during the first quarter of 2021. When separated into purchase and refinance, Doma executives said that purchase orders were down 13%, while refinance orders had dropped by 20%.

Due to the decline in the refinance market, Simkoff said Doma is refocusing its efforts on increasing its purchase volume. Unlike refinance transactions completed with Doma, as of Q1 2022 not all purchase title orders are completed through the Doma Intelligence platform, which is something Simkoff said the company plans to change by the end of next year.

Staying nimble in a fast-paced market with the right mortgage technology

In the rapid-fire, volatile mortgage marketplace, lenders need technologies to help them remain nimble and successfully navigate constant change. Advanced product, pricing and eligibility technology creates efficiencies and helps lenders compete in a fast-paced market.

Presented by: Black Knight

“We are refocusing resources from other areas of the company to a narrower set of strategic initiatives that will ensure we rise to solve the biggest pain points in a purchase focused market while also keeping the company on our previously communicated timeline to achieve adjusted EBITDA profitability in 2023,” Simkoff said.

Although Simkoff stressed that he was confident that Doma’s technological offerings will be enticing enough to lenders and other consumers for the company to increase purchase transaction volume, the firm announced a 15% work force reduction last week. A total of 310 positions were cut, with 259 coming from the fulfillment department, reducing the department’s workforce by 28%.

“We have recently made significant reductions to our cost structure across every part of the company in service of helping us act more nimbly and to protect our healthy cash flow position,” Simkoff said. “We expect this reduction will result in an annualized cost savings of $30 million.”

When discussing the firm’s previously announced goals of expanding into appraisal and home warranty, executives sounded far more cautious than in the past.

“In this current market, our investments in Doma Intelligence solutions for the home purchase market become even more critical,” said acting CFO Mike Smith. “Nonetheless, given our outlook for the mortgage market overall in 2022, we are prudent in our spend in other parts of the business to preserve our healthy cash position. This has entailed some tough decisions, including rescoping our entry into the appraisal and home warranty adjacent markets to make better use of our partner resources and provide better returns on investment.”

Cautious and conservative also describe Doma’s outlook on the future of the mortgage market.

“I think we have reacted pretty quickly to what we see as a longer-term market down turn,” Simkoff said. “We are certainly prepared to take further action if we see further deterioration, but we feel like the actions we have taken recently, and a more conservative outlook are the right approach today.”

Source: housingwire.com

Apache is functioning normally

June 15, 2023 by Brett Tams

Nursing home care can be extremely expensive. According to Genworth’s 2021 Cost of Care Survey, the median monthly cost of a private room is a nursing home is $9,034. That’s over $100,000 a year! And most people will need nursing home care or something similar in their old age: A study from the Urban Institute and the U.S. Department of Health and Human Services found that 70% of Americans who reach the age of 65 need some long-term care during their remaining years.

But there are ways to get some of these costs covered, as well as strategies that can help cover any out-of-pocket expenses. We’ll examine four ways to pay for nursing home care, some of which you can implement early in your life to ensure a financially secure retirement. Consider working with a financial advisor if you want more personalized retirement and savings advice.

What Government Programs Will Cover

There are three government programs intended to insure and help cover medical costs for Americans ages 65 and older. Let’s take a look at how each of these may be able to help you pay for nursing home care.

Medicare: Medicare typically doesn’t pay for nursing home stays because it doesn’t cover custodial care. Custodial care is defined as “non-skilled personal care, like help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom.” Medicare will only cover nursing home care when you need more advanced medical care — like regular injections that can only be administered by a medical professional. Medicare has additional restrictions and limits, and shouldn’t be counted on as a way to pay for long-term care in a nursing home.
Medicaid: Medicaid will cover 100% of your nursing home care so long as you meet the program’s financial eligibility requirements, according to the American Council on Aging. Individuals typically must have a low enough income and few financial resources to qualify for Medicaid. States limit the amount of income you can earn while qualifying for Medicaid and also typically put a $2,000 cap on the amount of cash and other assets you can have (beyond your home’s value). Additionally, the services must be deemed medically necessary by a physician.
PACE: Some states offer a Program of All-Inclusive Care for the Elderly (PACE), which is a joint Medicare-Medicaid program that can help those who need nursing home care. If you’re eligible and there’s a PACE program in your area, you can apply for care.

What Specialized Insurance Will Cover

Long-term care insurance is a fantastic option that can help you pay for nursing home care if you don’t qualify for government programs. This product is intended to cover the exact kind of care that isn’t often covered by Medicare — custodial care — as well as any specialized care or rehabilitation therapy you need.

Long-term care insurance isn’t cheap, but it can be a lot cheaper than paying out of pocket. The American Association for Long-Term Care Insurance found in its 2023 analysis that a 55-year-old man purchasing long-term care insurance with $165,000 in immediate benefits can expect to pay $900 a year. A woman in the same situation can expect to pay between $1,500 and $3,600.

How Tax Deductions Can Help

According to the IRS, you can deduct some or all of your nursing home expenses on your tax return. A tax deduction is a provision that allows some of your income to go untaxed. For instance, if you make $40,000 in income and qualify for a $5,000 tax deduction, you’ll only pay taxes on $35,000 of your income. While these tax provisions won’t necessarily help you pay for nursing home care up front, they can save you money after the fact.

The IRS specifies that if you’re in nursing home care primarily for medical reasons rather than custodial care, you can deduct the total cost. If you’re in nursing home care primarily for non-medical reasons, you can deduct the cost of any medical care, but not the cost of services such as lodging and meals. To figure out your tax deduction amount, most taxpayers will simply need to total up all of their qualifying medical costs, then subtract 7.5% of their adjusted gross income.

How to Cover Out-of-Pocket Costs

Even if you have long-term care insurance or another plan for covering your nursing home care, you will still want to have some money on hand to finance any uncovered expenses or surprise costs. Plan ahead for these out-of-pocket expenses by setting up a tax-advantaged retirement account.

A good option is to open a Roth IRA to use for these costs. Since you fund a Roth IRA with after-tax money, you won’t be taxed when you withdraw the money as long as you have reached age 59 ½ and the account has been open for five years. And unlike a traditional IRA, you won’t be subject to required minimum distributions (RMDs) at a certain age, so that money can remain invested until you need it.

An annuity is another smart way to cover out-of-pocket expenses or anything insurance won’t cover. An annuity is an insurance product where you pay a certain amount in exchange for receiving payments at a later date. You can specify when you want the payments to start, what schedule you want them to follow and how much you want them to be. You can also purchase an annuity with a long-term care rider to help cover some specified conditions requiring medical care.

Bottom Line

Nursing home care is expensive, but there are ways to plan for it and programs that can help you cover the costs. See how much government programs can help you, look into insurance options and make sure to take advantage of medical expense tax deductions. Lastly, set aside some savings for the costs that won’t be covered by government programs or insurance.

Retirement Planning Tips

Consider talking to a financial advisor about your options for preparing for long-term care costs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three qualified 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.
A related concern is how much life insurance you may need. SmartAsset’s life insurance calculator will give you an estimate of how much life insurance you should have.

Photo credit: ©iStock.com/Drazen Zigic, ©iStock.com/SolStock, ©iStock.com/Wavebreakmedia

Source: smartasset.com

Apache is functioning normally

June 15, 2023 by Brett Tams

An exchange-traded fund, or ETF, bundles many investments together to be bought and sold in one neat and tidy package. The purchase of one ETF provides exposure to dozens or even hundreds of different investments at once, and there are numerous types of ETFs on the market.

ETFs are an investment vehicle that allows even small and less-established investors to easily build diversified portfolios, and to do so at low relative costs. But before you start buying ETFs, it’s important to understand how they work, and their pros and cons.

What Is an ETF?

An ETF is an investment fund that you can buy and sell like a stock, but that pools together different assets, such as stocks, bonds, commodities, or currencies, and then divides its ownership up into shares.

This means that it is possible to buy one fund that provides exposure to hundreds or thousands of investment securities. ETFs are often heralded for helping investors gain diversified exposure to the market for a relatively low cost.

This is important to understand — the ETF is simply the suitcase that packs investments together. When you invest in an ETF, you are exposed to the underlying investment. For example, if you are invested in a stock ETF, you are invested in stocks. If you are invested in a bond ETF, you are invested in bonds.

Most ETFs are passive, which means to track a market index. Their aim is to provide an investor exposure to some particular segment of the market in an attempt to return the average for that market. If there’s a type of investment that you want broad, diversified exposure to, there’s probably an ETF for it.

Though less popular, there are also actively-managed ETFs, where a person or group makes decisions about what securities to buy and sell within the fund. Generally, these will charge a higher fee than index ETFs, which are simply designed to track an index or segment of the market.

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How Do ETFs Work?

Most ETFs track a particular index that measures some segment of the market. For example, there are multiple ETFs that track the S&P 500 index. The S&P 500 index is a measure of the stock performance of 500 leading companies in the United States.

Therefore, if you were to purchase one share of an S&P 500 index fund, you would be invested in all 500 companies in that index, in their proportional weights.

What Is the Difference Between an ETF And a Mutual Fund?

ETFs are similar to mutual funds. Both provide access to a wide variety of investments through the purchase of just one fund. But there are also several differences between ETFs and mutual funds:

• ETFs trade on an open market exchange (such as the New York Stock Exchange) just as a stock does, so it is possible to buy and sell ETFs throughout the day. Mutual funds trade only once a day, after the market is closed.

• ETF investors buy and sell ETFs to and from other ETF investors, not the fund itself, as you would with a mutual fund.

• ETFs are typically “passive” investments, which means that there’s no investment manager making decisions about what should or should not be held in the fund, as with mutual funds. Instead, they aim to provide the average return in the market for which they are invested. For example, an ETF for technology stocks would mimic the returns of technology stocks overall.

What Are the Advantages of ETFs?

There are a number of benefits of ETFs in an investment portfolio, including:

• trading

• fees

• diversification

• accessibility

Trading

ETFs are traded on the stock market, with prices updated by the minute, making it easy to buy and sell them throughout the day. Trades can be made through the same broker an investor trades stocks with. In addition to the ease of trading, investors are able to place special orders (such as limit orders) as they could with a stock.

Fees

ETFs often have low annual fees (called an “expense ratio”) — typically lower than that of mutual funds — and no sales loads. Brokerage commissions, which are the costs of buying and selling a stock within a brokerage account, do apply, though they are typically less than 0.25% per year.

Diversification

Using exchange traded funds is one way to achieve relatively cheap and easy diversification within an investment strategy. With the click of a button, an investor can own hundreds of investments in their portfolio.

Accessibility

Investors should be able to find what they want and build a diverse portfolio across all markets. The broad range of ETFs covers stocks, bonds, commodities, real estate, and even hybrids that offer a mix.

What Are the Disadvantages of ETFs

There are some potential downsides to trading ETFs, too, including:

Trading Might Be Too Easy

With pricing updated instantaneously, the ease of ETF trading can encourage investors to get out of an investment that may be designed to be long-term.

Extra Fees

Even if ETFs average lower fees than mutual funds, a brokerage might still charge commissions on trades. Commission fees plus fund management fees can potentially make trading ETFs pricier than trading standalone stocks.

Lower Yield

ETFs can be great for investors looking for exposure to a broad market, index, or sector. But for an investor with a strong conviction about a particular asset, investing in an ETF that includes that asset will only give them indirect exposure to it — and dilute the gains if it shoots up in price relative to its comparable assets or the markets as a whole.

What Are the Most Common Types of ETFs?

The ETF market is very diverse today but much of it reflects its roots in trying to capture a broad swathe of large public equities. The first US ETF was the “Standard & Poor’s Depository Receipt,” known today as the SPDR. It was launched on the American Stock Exchange in 1993 — and today, ETFs that cover the S&P 500 are one of the largest sectors of the industry.

Since the SPDR first debuted, the ETF industry has gotten more diverse as ETF trading and investing has gotten more popular with individual investors and institutions. But even so, market or index ETFs play a major role.

These are some of the most common types of ETFs.

Market ETFs

These provide exposure to a representative sample of the stock market, often by tracking a major index. An index, like the S&P 500, is simply a measure of the average of the market it is attempting to track.

Sector ETFs

These ETFs track a sector or industry in the stock market, such as healthcare stocks or energy stocks.

Style ETFs

These track a particular investment style in the stock market, such as a company’s market capitalization (large cap, small cap, etc.) or whether it is considered a value or growth stock.

Foreign Market ETFs

These ETFs provide exposure to international markets, both by individual countries (for example, Japan) and by larger regions (such as Europe or all “developed” countries except the United States).

Bond ETFs

Bond ETFs provide exposure to bonds, such as treasury, corporate, municipal, international, and high-yield.

Commodity ETFs

Commodity ETFs track the price of a commodity, such as a precious metal (like gold), oil, or another basic good.

Real Estate ETFs

Real estate ETFs provide exposure to real estate markets, often through what are called Real Estate Investment Trusts (REITS).

In addition, there are inverse ETFs, ETFs for alternative investments, and actively-managed ETFs. (While most ETFs are passive and track an index, there are a growing number of managed ETFs.)

ETFs designed for the modern investor.

Distributor, Foreside Fund Services, LLC

What Is ETF Trading?

ETF trading is the buying and selling of ETFs. To know how to trade ETFs, it helps to understand how stocks are traded because ETF trades are very similar to stock trades.

Stocks trade in a marketplace called an “exchange,” open during weekday business hours, and so do ETFs. It is possible to buy and sell ETFs as rarely or as frequently as you could a stock. You’ll be able to buy ETFs through whomever you buy or sell stocks from, typically a brokerage.

That said, many investors will not want to trade ETFs frequently; a simple ETF trading strategy is to buy and hold ETFs for the purpose of long-term growth. Whether you choose a buy and hold strategy or decide to trade more often, the ease of trading ETFs makes it possible to build a broad, diversified portfolio that’s easy to update and change.

When it comes to trading flexibility, ETFs can be used in different, more innovative ways than mutual funds. For example, advanced investors might choose to leverage or short markets using ETFs. ETFs also trade in such a way as to avoid short-term capital gains taxes, giving investors more control over their annual taxes.

3 Steps to Invest in ETFs

If you want to start investing in ETFs, there are a few simple steps to follow.

1. Do Your Research

Are you looking to get exposure to an entire index like the S&P 500? Or a sector like technology that may have a different set of prospects for growth and returns than the market as a whole? Those decisions will help narrow your search.

2. Choose an ETF

For any given market, sector, or theme you want exposure to, there is likely to be more than one ETF available. One consideration for investors is the fees involved with each ETF.

3. Find a Broker

If you’re already trading stocks, you’ll already have an investment broker that can execute your ETF trades. If you don’t have a broker, finding one should be relatively painless, as there are many options on the market. Once your account is funded, you can start trading stocks and ETFs.

How to Build an ETF Portfolio

Are you willing to take more risk to attempt more growth? How will you handle market volatility? Investment strategies vary based on criteria like personal risk tolerance and age. Once you have determined your desired asset allocation — that proportional mix of different asset classes — ETFs can help fulfill the exposure to those markets.

For example, if you decide that you would like to invest in a traditional mix of stocks and bonds at a ratio of 70% and 30%, you could buy one or several stock ETFs to gain exposure to the stock market with 70% of your money and another few ETFs to fulfill your 30% exposure to the bond market.

For diversification purposes, some investors like to have both U.S. and foreign stock ETFs in their portfolios, as well as both government and corporate bond ETFs. Some investors also add alternative assets to their investment strategy: gold and other commodities, emerging markets, and ETFs that invest in real estate.

Once you’ve determined your desired allocation strategy and purchased the appropriate ETFs, upkeep throughout the year is necessary. This could mean rebalancing your portfolio once a year or utilizing a more active approach. ETFs provide the flexibility to pursue any number of investment styles, philosophies, and techniques.

The Takeaway

ETFs bundle different investments together, offering exposure to a host of different underlying securities in one package. There’s likely an ETF out there for every type of investor, whether you’re looking at a particular market, sector, or theme. ETFs offer the bundling of a mutual fund, with the trading ease of stocks.

Though a DIY approach to investing using ETFs is doable, many investors prefer to have the help of a professional who can provide guidance throughout the investment process.

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

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

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Fund Fees
If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
SOIN0523062

Source: sofi.com

Apache is functioning normally

June 15, 2023 by Brett Tams

Robo-advisors have made investing easy.

Simply download the app. Answer some questions. Deposit your money.

And voila! You’re now saving for retirement!

But are robo-advisors worth it? Or are they just subpar replacements for actual financial advisors?

In this article, we’ll break down how robo-advisors work, how much they cost, and show you actual returns compared to financial advisors. And we’ll show you exactly who robo-advisors are for (and who should avoid them).

What’s Ahead:

What is a robo-advisor?

A robo-advisor is an automated investment service that helps you build an investment portfolio and manages your investments for you. Similar to a financial advisor, rob-advisors consider your age, income, risk tolerance, and other factors to build a diversified portfolio of ETFs that help you hit your financial goals.

But robo-advisors charge far less in fees than traditional financial advisors — around 0.25% of your investment balance vs. the 1% fee charged by most advisors. Robo-advisors also automatically rebalance your portfolio periodically, and can even help you with optimizing your taxes.

Overall, robo-advisors are an easy way to automate your investing while avoiding the high fees of professional money managers.

How do robo-advisors work?

Robo-advisors use advanced algorithms to help you build a diversified investment portfolio based on your goals and risk tolerance. To start investing with a robo-advisor, you will need to sign up for an account, either online or through a mobile app.

Most robo-advisors have an onboarding questionnaire to help gauge your risk tolerance, asking you questions about how you view your investments, and how comfortable you are with a drop in the value of your portfolio.

After completing the onboarding process, you are presented with a pre-built portfolio of ETFs. These ETFs are typically spread across stocks and bonds, representing multiple market sectors and asset classes. Most robo-advisors will let you customize the portfolio slightly, but you can’t typically choose individual stocks or funds.

Once you commit to a portfolio, you can link your bank account and deposit funds. The deposited money will get split between the pre-selected investments for you, and you can track your portfolio through the accompanying mobile app.

Some robo-advisor services offer more advanced money management, including features like tax-loss harvesting, portfolio margin loans, goal-tracking apps, and automated money transfers. A robo-advisor might even offer access to licensed financial advisors who can answer your money questions and help ensure your investments are set up properly within the app.

Read more: Automated tax loss harvesting – Is it right for you?

Robo-advisor returns

Robo-advisors typically utilize a portfolio of low-fee ETFs to help keep your investment costs low, and to build in diversification by holding funds that own hundreds of underlying investments.

These funds can include multiple market sectors and asset classes, like stocks, bonds, real estate, commodities, and other investments. The return on investment will vary by portfolio, and not everyone will have the same investment mix.

Most robo-advisors don’t have a long track record. But according to the Robo Report, the five-year returns (2017 to 2022) from most robo-advisors range from 2% to 5% per year. And Wealthfront, one of the best robo-advisors available, also states that customers can expect about a 4% to 6% return per year, depending on their risk tolerance.

Compare these returns to, say, Vanguard’s S&P 500 index fund (VOO) with a return of about 10.94% per year (five-year average, based on data collected on 11-30-22), and it would seem these robo-advisors are underperforming.

But remember, not everyone wants to risk their entire portfolio on stocks, and a balanced portfolio hasn’t returned 13% per year. In fact, the traditional 60% stocks / 40% bonds portfolio has returned about 6.4% over the past five years.

Here’s our list of the best robo-advisors.

A note about short-term returns

One thing to keep in mind is that annual average returns can vary dramatically depending on your start date and end date.

The S&P 500, for instance, has an (inflation-adjusted) average annual return of 6.5% since its inception in 1928. But when an investor entered the market would seriously affect their returns.

Those who entered in the late 60s, for instance, wouldn’t have much of a return for years. One who put his money in in the 50s, however, would be doing great. Like so many things, timing is everything.

This holds true for more recent years, as well.

The later you came into the rally, the less it did for you. (This is why it’s so important not to panic sell after a market drop; you miss out on the inevitable rally.)

So yes, it would appear on the surface that robo-advisors are underperforming currently, but when compared to a balanced portfolio, it seems they are not too far off.

Robo-advisor fees

While robo-advisors offer solid investment advice and the ability to automate your investments, they aren’t free. And the fees that you pay for these services can eat into your total returns.

But the good news is that robo-advisors are much cheaper than their counterparts. While most investment advisors charge about 1% of assets under management (AUM), robo-advisors typically charge about 0.25% AUM (or less). There are some robo-advisors that charge a flat monthly fee, but these services are typically not a great deal for investors with small amounts invested.

In addition to the management fee, investors will pay the expense ratio of any of the funds they are placed in as part of the investment portfolio. Luckily, most robo-advisors stick to low-cost ETFs that charge less than 0.10% per year.

Robo-advisor alternatives

Robo-advisor vs. index fund

You might be able to build your own portfolio by picking out a good mix of index funds yourself. This is a cheaper route compared to robo-advisors (as far as fees go), but possibly riskier as well, as you need to understand what you are investing in at a deeper level. But the returns may be more robust, netting you more growth.

Here’s how your portfolio would compare when held in a robo-advisor vs. simply investing in index funds:

Robo-advisor ($500/mo invested, 6% return, 0.25% fee):

5-year index fund portfolio value = $35,589.26 ($35,851.91 – $262.65 in fees)
10-year index fund portfolio value = $82,656.72 ($83,829.86 – $1,173.14 in fees)
20-year index fund portfolio value = $227,227.97 ($233,956.36 – $6,728.39 in fees)
30-year index fund portfolio value = $480,091.21 ($502,810.06 – $22,718.85 in fees)
40-year index-fund portfolio value = $922,363.22 ($984,286.10 – $61,922.88 in fees)

Index funds ($500/mo invested, 8% return, 0.04% fee):

5-year index fund portfolio value = $37,971.20 ($38,015.57 – $44.37 in fees)
10-year index fund portfolio value = $93,660.10 ($93,872.92 – $212.82 in fees)
20-year index fund portfolio value = $295,117.56 ($296,537.53 – $1,419.97 in fees)
30-year index fund portfolio value = $728,440.95 ($734,075.21 – $5,634.26 in fees)
40-year index-fund portfolio value = $1,660,494.54 ($1,678,686.24 – $18,191.70 in fees)

Read more: Why index funds cost less, reduce risk, and make you a better investor

Robo-advisor vs. target-date fund

While robo-advisors build a portfolio of individual ETFs and funds, a target date fund is a single fund that owns a diversified mix of investments that adjust over time.

Both robo-advisors and target date funds are designed to adjust as you get older, moving your investments from aggressive to conservative. And both help investors plan for retirement. But while robo-advisors charge a 0.25% annual fee (plus underlying fund fees), target date funds charge only about 0.1%.

Here’s how they compare:

Robo-advisor ($500/mo invested, 6% return, 0.25% fee):

5-year index fund portfolio value = $35,589.26 ($35,851.91 – $262.65 in fees)
10-year index fund portfolio value = $82,656.72 ($83,829.86 – $1,173.14 in fees)
20-year index fund portfolio value = $27,227.97 ($233,956.36 – $6,728.39 in fees)
30-year index fund portfolio value = $480,091.21 ($502,810.06 – $22,718.85 in fees)
40-year index-fund portfolio value = $922,363.22 ($984,286.10 – $61,922.88 in fees)

Target-date fund ($500/mo invested, 6% return, 0.1% fee):

5-year index fund portfolio value = $35,746.64 ($35,851.91 – $105.27 in fees)
10-year index fund portfolio value = $83,358.50 ($83,829.86 – $471.36 in fees
20-year index fund portfolio value = $231,238.51 ($233,956.36 – $2,717.85 in fees)
30-year index fund portfolio value = $493,581.27 ($502,810.06 – $9,228.79 in fees)
40-year index-fund portfolio value = $958,983.74 ($984,286.10 – $25,302.36 in fees)

Robo-advisor vs. financial advisor

Robo-advisors perform a lot of similar functions as a financial advisor. Portfolio planning, rebalancing, goal setting, and even tax planning are available at most major robo-advisor services.

Financial advisors do all of these things, but they also can help answer specific questions you may have about the plan, and make adjustments based on your preferences. And financial advisors actively manage your money, while robo-advisors do it based on algorithms and pre-set rules.

There are pros and cons to each service, but here’s how the returns might compare:

Robo-advisor ($500/mo invested, 6% return, 0.25% fee):

5-year index fund portfolio value = $35,589.26 ($35,851.91 – $262.65 in fees)
10-year index fund portfolio value = $82,656.72 ($83,829.86 – $1,173.14 in fees)
20-year index fund portfolio value = $227,227.97 ($233,956.36 – $6,728.39 in fees)
30-year index fund portfolio value = $480,091.21 ($502,810.06 – $22,718.85 in fees)
40-year index-fund portfolio value = $922,363.22 ($984,286.10 – $61,922.88 in fees)

Financial advisor ($500/mo invested, 6% return, 1% fee):

5-year index fund portfolio value = $34,811.48 ($35,851.91 – $1,040.43 in fees)
10-year index fund portfolio value = $79,240.72 ($83,829.86 – $4,589.14 in fees)
20-year index fund portfolio value = $208,315.51 ($233,956.36 – $25,640.85 in fees)
30-year index fund portfolio value = $418,564.74 ($502,810.06 – $84,245.32 in fees)
40-year index-fund portfolio value = $761,038.58 ($984,286.10 – $223,247.52 in fees)

Read more: Do you need a financial advisor?

Robo-advisor pros and cons

Pros

Low fees compared to financial advisors
Diversified investment approach
Access to goal setting and tax planning tools
Avoids high-cost funds

Cons

Can’t customize very much
Can’t always speak to a professional for help
Fees may be high compared to investing yourself

Summary: Are robo-advisors worth it?

Robo-advisors are a great way for hands-off investors to build an investment portfolio without paying the high fees of a financial advisor.

But if you are a do-it-yourself (DIY) investor who likes to pick and choose your investments, you’ll feel handcuffed by a robo-advisor’s lack of flexibility. And if you find that you can’t handle the ups and downs of the stock market and constantly watching your investments fluctuate in value, you may benefit from finding a fee-only financial advisor.

Read more:

MoneyUnder30 receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. MoneyUnder30 is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Source: moneyunder30.com

Apache is functioning normally

June 14, 2023 by Brett Tams

TransUnion announced on Wednesday that it has entered into a commercial agreement with Truework, an income and employment (VOIE) services verification provider, in order to provide comprehensive income verification coverage.

Together, Transunion and Truework will offer verifiers an accurate and up-to-date view of consumers’ income and credit data, enabling better insights and more efficient decision-making, according to a press release.

“We expect this partnership to enable Truework to accelerate our distribution to TransUnion customers,” Pravesh Mistry, chief revenue officer of Truework, said. “We are excited to combine our expertise and resources to evolve the income verification process for lenders, while improving the experience for the end consumer.”

The partnership positions TransUnion to address the growing market demand for VOIE, offering customizable solutions across various industries. The initial focus will be on select industries, with plans to expand to others in the future.

Truework and TransUnion will also collaborate on developing the next generation of VOIE solutions.

“We see great synergies with Truework that will allow us to provide a more holistic view of each individual and look forward to continuing to grow this partnership,” Hilary Chidi, EVP of credit risk solutions and chief sustainability officer at TransUnion, said.

As part of the collaboration, Truework will leverage its one-stop platform for VOIE information to offer consumers greater control over their personal and financial data. The agreement follows TransUnion’s strategic minority investment in Truework earlier this year.

“We expect that our collaboration will allow customers to derive superior insights and make more informed decisions by providing a broader view of consumers,” Chidi said. “In turn, we expect that consumers will benefit from a clearer picture of themselves when they apply for loans, employment, and other opportunities.”

Headquartered in San Francisco, Truework offers a comprehensive platform that streamlines the verification process by integrating various methods. Through this approach, Truework covers 90% of U.S. employees. The company is also an authorized report supplier for Fannie Mae‘s Desktop Underwriter validation service, relied upon by 20 of the top 25 mortgage lenders in the U.S.

TransUnion is a global information and insights company that operates in more than 30 countries with over 12,000 associates. The company’s solutions extend beyond core credit, encompassing marketing, fraud, risk, and advanced analytics.

This content was generated using AI, and was edited and fact-checked by HousingWire’s editors.

Source: housingwire.com

Apache is functioning normally

June 14, 2023 by Brett Tams

Whether you want to save for retirement or buy stock in your favorite company, you’re going to need a brokerage account before you can get started. Brokerage accounts are different from regular bank accounts because they give you access to securities like stocks and bonds. Not to mention some brokerage accounts come with special tax advantages.

This article will cover the best brokerage accounts you can choose from. For those who are new to investing it will also cover the basics of what brokerage accounts are and how they work.

What’s Ahead:

Overview: Best brokerage accounts for beginners

TD Ameritrade: Best overall for new investors

What sets TD Ameritrade apart is its extensive library of free educational resources that new investors can use to learn about investing.

thinkorswim is TD Ameritrade’s trading software that allows you to make trades anywhere. New investors can use paper trading to simulate investing without risking any money, while experienced investors can use the same software to test new strategies or learn new skills.

Pros

Educational library and training tools. TD Ameritrade’s suite of free resources and simulation software makes it one of the best platforms for new investors.
Customer support. TD Ameritrade is known for its world-class customer support, which is available 24/7 on most communications platforms, including Twitter.

Cons

Fewer no-cost mutual funds. TD Ameritrade only offers around 1,600 no-cost mutual fund options. This is less than some of its competitors.
No crypto trading. TD Ameritrade does not currently support cryptocurrency trades.

Visit TD Ameritrade to learn more or read our TD Ameritrade review.

Robinhood: Best mobile trading app

Robinhood was a disrupter when it launched its mobile trading app in 2015. Its mission is to provide everyone with access to wealth-building investing activities and it does this by offering users commission-free trades.

Robinhood’s app is designed for digitally-native investors. With just a few swipes, you can buy stocks and begin building your own portfolio.

Advanced traders can join Robinhood Gold, which allows you to trade on margin. Proceed with caution: Margin trading is a risky business.

Pros

No-fee trades. Buy and sell stocks, ETFs, and crypto without paying trading fees.
User-friendly app. The app is easy to use, allowing you to make trades right from your phone.
No minimum to get started. You can open a Robinhood account and start with as little as $1.

Cons

Trade suspensions. Robinhood got into some hot water after it suspended trading during the GameStop short squeeze of 2021. They’ve run into trouble with regulators over a few other issues too.
Limited options. Robinhood doesn’t give you the full suite of investment options you might find at other firms. While you can buy stocks, ETFs, and crypto on the platform, you can’t buy mutual funds or bonds.

Visit Robinhood.com to learn more or read our Robinhood review.

Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”

E*TRADE: Best for active traders

E*TRADE is a financial services company that is part of Morgan Stanley. It offers $0 commission trades and an advanced trading platform that makes it perfect for active traders.

The platform gives you access to a wide variety of investment options including stocks, bonds, ETFs, and mutual funds. More than 4,700 mutual funds are available with no transaction fees.

Active traders have access to a suite of data tools including the Power E*TRADE app. This software offers traders access to real-time data feeds and the ability to build custom graphs.

Pros

Advanced analytics. Power E*TRADE is an advanced app with great charting tools.
$0 commissions. E*TRADE eliminated its $6.95 trade commission back in 2019. It is now one of the most cost-effective brokerage options available.
Wide selection of investments. Investors can choose from a wide variety of investment options including stocks and bonds.

Cons

No crypto trading. E*TRADE does not support cryptocurrency at this time.
Transfer fees. If you want to move money out of E*TRADE to another brokerage, be prepared to pay $25 for a partial transfer and $75 for a full transfer.

Visit E*TRADE to learn more or read our E*TRADE review.

Webull: Best for casual traders

If you’re looking for an easy-to-use, no-frills trading platform, Webull could be a good fit for you.

Webull provides a very readable dashboard of the top stocks and best-performing industries. Its mobile trading app gives you access to a range of investment options — including crypto — with no trading fees.

New investors who fund an account on the platform can even get free stocks just for joining. Terms apply.

Pros

Lots of investment options. Webull gives investors access to 44+ different cryptocurrencies, as well as fractional shares.
Analytical tools. Execute advanced technical trading strategies.

Cons

No educational resources. Inexperienced investors with a lot to learn probably shouldn’t turn to Webull.
No interest on uninvested cash. Some other brokerage firms partner with banks to offer interest for uninvested cash. But any cash at Webull that isn’t invested will sit idle in your account.

Visit Webull to learn more or read our Webull review.

Fidelity: Best all-in-one brokerage

Fidelity is one of the most well-known financial services companies out there. In addition to offering taxable brokerage accounts, Fidelity also has a number of tax-advantaged options, like health savings accounts (HSA).

One of Fidelity’s key selling points is its zero-expense-ratio index funds. An index fund typically tracks a specific index in the stock market, like the S&P 500. It gives you the opportunity to invest in a basket of top-performing companies without having to pick individual stocks. While most index fund managers typically charge a small fee, Fidelity is the first company to offer index funds with no fees.

Fidelity’s variety of account options also makes it a good one-stop-shop for investors. You can have a taxable brokerage account at Fidelity, along with your retirement accounts, an HSA, and a 529 College Savings Plan. Fidelity also offers a suite of educational resources to help new investors build a comprehensive portfolio to meet their personal financial goals.

Pros

Zero-expense ratio index funds. These are highly cost-effective, low-fee funds to maximize the return on your investments.
Retirement planning. Fidelity offers a library of educational resources that are great for someone looking to start saving for retirement.

Cons

No crypto. Fidelity does not support crypto at this time.
High broker fees. Fidelity doesn’t charge a commission on self-initiated trades but it does charge fees to tap into its network of financial advisors.

Visit Fidelity to learn more or read our Fidelity review.

Charles Schwab: Best customer service

Charles Schwab is another well-known financial services company that offers both taxable and tax-advantaged brokerage accounts. Schwab invests in research to build in-house expertise that anyone can use, no matter how much money they have. If you have questions or want to learn more, an expert is only a phone call away.

Charles Schwab also offers its own index funds tracking a variety of indices, including the S&P 500, large-cap stocks, the bond market, and REITs. With low expense ratios, Schwab’s index funds are a cost-efficient passive investing option.

Pros

World-class research. Schwab customer service reps are experts who can help you learn more about investing and the products Schwab offers.
Cost-effective index investing. The suite of Schwab’s low-cost index funds makes it a great option for passive investors.

Cons

No crypto. Schwab doesn’t offer direct crypto investing, but it does give you access to crypto-related products like Grayscale Bitcoin Trust.
Foreign stock fees. Schwab offers low-cost options for U.S.-traded companies, but not for foreign companies.

Visit Charles Schwab to learn more.

Vanguard: Best for passive investing

Vanguard is one the leading brokerage firms out there thanks to its famous founder, Jack Bogle. Fans of Vanguard — known as Bogleheads — follow Jack’s simple investing philosophy of letting compound interest grow over time, making Vanguard one of the best platforms for passive investors.

Vanguard is a pioneer of low-cost index funds. Investors use index funds to save money without having to develop technical expertise or make active trades. The “set it and forget it” mindset works well with Vanguard, where investors can benefit from compounding interest without paying expensive management fees.

Pros

Low-cost index funds. Vanguard offers some of the most cost-effective and best-performing index funds.
Cheap mutual funds. In addition to index funds, Vanguard’s Admiral Shares mutual funds are some of the cheapest mutual funds available. The minimum required to invest in their mutual funds is $3,000.

Cons

Not user friendly. Vanguard’s platform is a bit old school and might not be the best option for active traders.
Basic. It’s another no-frills option, so you won’t get access to advanced analytical tools or research with Vanguard.

Visit Vanguard to learn more or read our Vanguard review.

Ally Invest: Best account options

Ally Invest is the trading platform affiliated with Ally Bank. It offers no-cost trades that appeal to both new and experienced investors.

Ally Invest offers a variety of account options depending on how involved you want to be. You can choose to open a self-directed account, invest in a robo-advisor portfolio, or work with Ally’s wealth management team. This gives you the flexibility to invest on your own or to capitalize on Ally Invest’s in-house expertise.

Pros

Options for all types of investors. You can manage your own investments if you want, but Ally Invest gives you options so you don’t have to.
Integration with Ally Bank members. Ally Invest allows you to move money easily between all your accounts if you already bank with Ally.

Cons

No crypto. Ally Invest offers a variety of securities but does not support crypto at this time.
No in-person branches. Ally is fully digital, so if you’re looking for in-person support this brokerage firm might not be the best for you.

Visit Ally Invest to learn more or read our Ally Invest review.

How I chose these brokerage accounts

I chose these brokerage accounts based on three core factors:

Securities available to investors
User experience
Fees

My logic: If a platform is hard to use and has a lot of fees you’re probably not going to benefit from it. Plus, a brokerage firm with limited offerings can make it hard to build a well-diversified portfolio. A good beginner brokerage account should have low fees, a variety of investment options to choose from, and a good user experience.

What is a brokerage account?

A brokerage account is an investment account where you can buy and sell securities. These are things like stocks, bonds, ETFs, mutual funds, and sometimes even crypto.

Most brokerage firms allow you to open an account online. Many even have apps where you can get started right from your phone.

You also don’t need a lot of money to get started either. Once you fund your brokerage account, you can begin trading stocks. An important thing to note: The brokerage firm doesn’t buy securities for you. After you fund your account it is up to you to begin investing. If you don’t, your cash will just sit there collecting dust.

Types of brokerage accounts

The brokerage account you’re probably most familiar with is your retirement account. Whether you have an employer-sponsored 401(k) or your own IRA, retirement accounts are actually brokerage accounts.

Read more: A beginner’s guide to saving for retirement

Aside from retirement accounts, there are a couple of other types of accounts you’ll want to be aware of.

A self-directed brokerage account is one where you make your own stock picks. Robinhood is a good example of this type of account. Unlike your retirement account, there are no tax benefits with self-directed brokerage accounts.

If the idea of picking your own stocks is overwhelming, you can opt to work with a financial advisor. These are individuals who act as brokers and are paid on commission to make trades on behalf of their clients. Sometimes they are paid a percentage of the total assets they manage. Other times they are paid on a per-trade basis.

When you work with a financial advisor you’re essentially paying for their expertise. They pick stocks and build a portfolio based on their knowledge of the market. The more active your advisor is, however, the more it will cost you.

Read more: Do you need a financial advisor?

An alternative to using a human financial advisor is to work with a robo-advisor. These are proprietary algorithms that use technology to manage your portfolio. They basically automate the entire investing process.

One of the benefits of using a robo-advisor is that it allows you to invest in a pre-picked portfolio while leveraging investing strategies like tax-loss harvesting. You essentially get a lot of the expertise a human advisor would give you at a fraction of the cost.

These different types of accounts each come with their own costs and benefits. You’ll need to first identify your overall investing goal before figuring out which type of account will work best for you.

How do brokerage accounts work?

Brokerage accounts work like bank accounts with extra benefits. Like a bank account, you can deposit money into them. But instead of letting the money just sit there and collect interest, a brokerage account allows you to buy assets, like stocks or bonds.

Whatever assets you purchase through your brokerage account are yours to keep. At any time you can sell them (although there are some tax implications when you do this) to turn them back into cash. Some assets earn dividends that generate passive income.

You can have as many brokerage accounts as you want and there is no limit to how much money you can invest (except for tax-advantaged accounts). There are no fees to open a brokerage account, although there may be fees to make trades or to work with a financial advisor.

What is a brokerage fee?

Brokerage fees are commissions a broker charges to make trades. Sometimes you are charged a flat fee while other times you are charged a percentage of the assets your broker holds for you.

Where you’ll find the most fees is if you work with a full-service broker. These individuals are paid a fee for the trades they make on behalf of clients. You’re not actually paying them just to make trades though. You’re also paying for the research they do to build your portfolio and the expertise they bring to help you manage your investments.

FAQs

How many brokerage accounts can I have?

You can have as many brokerage accounts as you would like. In fact, you’ll probably want to have several different accounts depending on your goals.

A retirement account, for example, is going to be different than an account where you buy and sell stocks frequently. Retirement accounts are tax-advantaged and because of that, they have contribution limits. If you use an employer-sponsored retirement plan, you might not even get a say in who brokers your account.

A taxable, self-directed account where you buy and sell individual stocks is different than a retirement account. For a self-directed account, you might prefer to use a brokerage firm with an easy-to-use app to make daily trades.

Are brokerage accounts FDIC insured?

No, brokerage accounts are not FDIC insured. But that’s not exactly a bad thing.

The FDIC — or Federal Deposit Insurance Corporation — protects deposit bank accounts (aka your checking and savings account). They don’t protect money invested in the stock market or other investment instruments.

Those investments are protected by a different agency called the Securities Investor Protection Corporation (SIPC). The SIPC will intervene if a broker goes bust. In that event the SIPC will either transfer your portfolio to another firm, or they will work outright to rebuild it, buying new assets to make up for any that are lost.

Like the FDIC, SIPC does come with some stipulations. For one, a brokerage has to be a member that qualifies for SIPC coverage. And that coverage is limited to up to $500,000 per customer.

How are brokerage accounts taxed?

Brokerage accounts are taxed differently depending on the type of account you have and how long you hold assets for.

Retirement accounts are usually tax-advantaged. In the case of a traditional 401(k), this means that you won’t pay taxes on your account contributions, but you will pay taxes later when you withdraw money in retirement. However, in the case of a Roth IRA, you will pay taxes on your account contributions, but won’t pay taxes on the withdrawals in retirement.

Read more: IRA vs. 401(k)

Self-directed brokerage accounts don’t come with any tax benefits. You invest money that has already been taxed and you pay taxes on your investments when you sell.

Selling an asset triggers a taxable event. If you’ve held it for less than a year it is considered a short-term capital gain. This is taxed at your current income bracket.

If you hold an asset for a year or more, however, it will be counted as long-term capital gains. You’ll pay between 0% and 20% depending on your tax bracket. Long-term capital gains taxes are usually lower than income taxes, which is why it’s advised to hold onto a stock for at least a year before selling it.

Summary

A brokerage account gives you the ability to put your money to work. Most firms offer access to securities like stocks and bonds, while others give you access to cost-effective index funds. These are ways you can grow your money beyond collecting interest in a savings account.

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Apache is functioning normally

June 13, 2023 by Brett Tams

For borrowers the new financial year FY 23-24 has brought with it big relief from rising interest rate. The Reserve Bank of India (RBI) in its second monetary policy meeting of the current fiscal, held on June 8, has decided to keep the repo rate unchanged at 6.5% yet again. This is welcome relief for home loan borrowers who saw a steep and big rise in their home loan interest rates within a span of just 10 months starting from May 2022 to February 2023, when RBI raised the repo rate by a total of 2.5%.

Are the two consecutive pauses in repo rate hikes a signal for the end of the current rising interest rate cycle? Is there a chance of interest rates falling soon?

The big impact of the rising interest rate cycle
Home loan borrowers, who had taken external benchmarked-linked loans recently and whose loan is linked to the repo rate, had to bear the full brunt of these repo rate hikes. Their home loan interest rates would have gone up in tandem with the repo rate hikes. As a result, for most of the borrowers, as a first recourse lenders typically increase the tenure of the loan. However, such an interest rate hike leads to situation where tenure rise option does not work anymore after a particular point. In such a situation, lenders are compelled to raise the EMIs.

For a home loan borrower who has taken a loan or Rs 40 lakh for 20 years at 7%, a rise of 2.5% means that his/her total interest payment has risen from Rs 34.43 lakh to 49.48 lakh. This is a whopping rise of 44% within such a short span. A tenure increase, which works to a limited extent, is not a less painful exercise. Despite an increase of 10 years in your tenure from 20 years to 30 years, the EMI would also go up by Rs 2,622 from Rs 31012 to Rs 33,634. In this case, the total interest outgo will rise from Rs 34.42 to Rs 81.08 lakh. This is a massive rise of 136% if you go for a combination of tenure increase and EMI rise.

Apache is functioning normally

June 13, 2023 by Brett Tams

New Jersey, United States – Verified Market Research recently published a research report titled, “Global Home Decor Market Insight, Forecast 2030“. The Global Home Decor market is elaborately discussed in the report so as to help readers to gain a sound understanding of key trends, top strategies, and potential growth opportunities. The Global Home Decor report offers Porter’s Five Forces analysis, PESTEL analysis, and qualitative and quantitative analysis to give a complete and accurate picture of the current and future market situations. The analysts have carefully forecast the market size, CAGR, market share, revenue, production, and other vital factors with the help of industry-best primary and secondary research tools and methodologies. Players can use the Global Home Decor report to build effective strategies for concentrating on key segments and regions and boosting their business in the Global Home Decor market.

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Key Players Mentioned in the Global Home Decor Market Research Report:

In this section of the report, the Global Home Decor Market focuses on the major players that are operating in the market and their competitive landscape present in the market. The Global Home Decor report includes a list of initiatives taken by the companies in the past years along with the ones, which are likely to happen in the coming years. Analysts have also made a note of their expansion plans for the near future, financial analysis of these companies, and their research and development activities. This research report includes a complete dashboard view of the Global Home Decor market, which helps the readers to view an in-depth knowledge about the report.

Siemens AG, Springs Window Fashions LLC, Sofia Home Collection Company, Conair Corporation, Koninklijke Philips N.V, Hanssem Corporation, home24, Herman Miller Inc, Kimball International Inc, Inter IKEA Systems B.V.

Global Home Decor Market Segmentation:

Home Decor Market, By Product

• Flooring
• Textile
• Furniture
• Others

Home Decor Market, By Application

• Indoor
• Outdoor

For a better understanding of the market, analysts have segmented the Global Home Decor market based on application, type, and regions. Each segment provides a clear picture of the aspects that are likely to drive it and the ones expected to restrain it. The segment-wise explanation allows the reader to get access to particular updates about the Global Home Decor market. Evolving environmental concerns, changing political scenarios, and differing approaches by the government towards regulatory reforms have also been mentioned in the Global Home Decor research report.

In this chapter of the Global Home Decor Market report, the researchers have explored the various regions that are expected to witness fruitful developments and make serious contributions to the market’s burgeoning growth. Along with general statistical information, the Global Home Decor Market report has provided data of each region with respect to its revenue, productions, and presence of major manufacturers. The major regions which are covered in the Global Home Decor Market report includes North America, Europe, Central and South America, Asia Pacific, South Asia, the Middle East and Africa, GCC countries, and others.

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(1) A complete section of the Global Home Decor market report is dedicated for market dynamics, which include influence factors, market drivers, challenges, opportunities, and trends.

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(4) The report also discusses competitive situation and trends and sheds light on company expansions and merger and acquisition taking place in the Global Home Decor market. Moreover, it brings to light the market concentration rate and market shares of top three and five players.

(5) Readers are provided with findings and conclusion of the research study provided in the Global Home Decor Market report.

Key Questions Answered in the Report:

(1) What are the growth opportunities for the new entrants in the Global Home Decor industry?

(2) Who are the leading players functioning in the Global Home Decor marketplace?

(3) What are the key strategies participants are likely to adopt to increase their share in the Global Home Decor industry?

(4) What is the competitive situation in the Global Home Decor market?

(5) What are the emerging trends that may influence the Global Home Decor market growth?

(6) Which product type segment will exhibit high CAGR in future?

(7) Which application segment will grab a handsome share in the Global Home Decor industry?

(8) Which region is lucrative for the manufacturers?

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