A Beginner's Guide To Sofi Invest

SoFi Invest is an all-inclusive investment app for passive and active investors to invest in diversified portfolios of ETFs, mutual funds, and other alternative investments like real-estate-backed funds and commodities. Stocks, ETFs, and fractional shares are commission-free, making SoFi a good choice for beginners and fee-conscious investors. SoFi offers a range of account options to suit different investors' needs. SoFi Active Invest is an online brokerage account for hands-on investors seeking full control over their investment trades. SoFi's robo-advisor provides instant portfolio diversification through pre-curated ETF and mutual fund portfolios balanced to match your risk tolerance, time horizon, and goals. SoFi also offers retirement savings accounts and margin trading accounts.

How to open a SoFi Invest account

To open a SoFi Invest account, you can follow these steps:

First, log into the SoFi Mobile App. Once you are logged in, click on the “Invest” icon at the bottom of the page. From there, you can create a new account by tapping "Create (new account)" and selecting "Active brokerage (Self-directed)".

Next, you will be directed to the "Let’s get started" page, where you will need to provide your contact information. Most of your details will be auto-populated, but it is important to review and ensure the information is accurate and complete before agreeing to the account disclosures. There will also be additional questions regarding your investing experience.

After that, you will need to review and agree to the agreements and terms of service. You will then have the option to fund the account. If you choose to do so, you can add a bank link by searching for your bank or selecting it from the listed options. Once your bank is selected, enter your login credentials and click "Next". If your bank is not listed, you can manually enter your bank routing and account number, selecting either Checking or Savings as the account type.

If you are not ready to fund your account, you can skip this step for now. However, once a bank link has been established, you can schedule a deposit by clicking on the “Add Money” button.

How to fund a SoFi Invest account

To fund a SoFi Invest account, you must first open a brokerage account to buy and sell stocks and other securities. You can then fund your SoFi Invest account by linking your SoFi money account, personal checking, or savings account. You can also initiate an account transfer (ACAT), rollover, check, or wire.

You can set up a one-time contribution to your SoFi Invest account in a few easy steps. To make an ACH deposit on the SoFi App, tap on 'Invest' and then 'Trade', or go directly to the Invest account and tap on 'Trade' on the account itself. Confirm that the 'From' and 'To' accounts are correct. You can change the 'From' or 'To' account by tapping on that field. Enter the amount you would like to deposit using the number pad, then tap 'Review deposit' to confirm.

To make an ACH deposit on the SoFi Website, select 'Invest' from the products and click on the 'Add cash' icon, or go directly to the Invest account and click on the 'Add cash' button on the account itself. Confirm that the 'From' and 'To' accounts are correct. You can change the 'From' or 'To' account by clicking on that field. Click on the big '$0' to type in the amount you would like to deposit, then click on the 'Review' button to confirm the deposit.

You can also set up a recurring deposit to ensure you have money ready when you want to buy, or make a one-time deposit at any time.

How to place a trade on SoFi Invest

To place a trade on SoFi Invest, you will first need to open an investment account. This can be done through a brokerage firm, such as a full-service or online brokerage, or a robo-advisor. Once you have opened an account, you can start trading stocks and other securities.

If you are new to investing, it is important to do your research and understand the risks involved. SoFi Invest offers two distinct companies with various products and services for investors:

• Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment advisor. Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
• Active Investing and brokerage services are provided by SoFi Securities LLC, a member of FINRA and SIPC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

To place a trade on SoFi Invest, follow these steps:

• Log in to your SoFi account.
• Navigate to the "Invest" tab and select your Individual Active Invest account.
• Tap the magnifying glass to search for the stock or ETF you want to trade.
• Tap "Trade" on the detail page for the security.
• Review the information about the security and decide if you want to buy or sell.
• Enter the amount you want to trade and place your order.

Remember, investing in securities involves risks, and there is always the potential to lose money. It is essential to do your own research and understand the company's financial statements and valuation metrics before investing.

How to choose stocks on SoFi Invest

SoFi Invest is a great platform for beginners to start investing in stocks. Here are some detailed instructions on how to choose stocks on SoFi Invest:

• Define Your Investment Goals: Understand your financial objectives and timeframes. Are you investing for retirement, saving for a down payment on a home, or your child's education? This will guide your investment strategy and help you determine the level of risk you're comfortable with.
• Learn Diversification: Diversifying your portfolio can help reduce investment risk and potentially improve performance. Instead of investing in just a few companies, consider investing in a range of stocks from different sectors and industries. The 60/40 rule is a popular strategy, investing 60% in equities and 40% in fixed-income assets.
• Research and Select Potential Stocks: Look for companies you are familiar with or have an affinity for. Consider their profitability, performance within their industry, and any recent news or developments that may impact their stock price.
• Analyze Stock Value and Performance: Evaluate the stock's price-to-earnings (PE) ratio and dividend yield to assess if it's a good value. A stock with a PE below its historical average or a dividend yield above average may indicate a favourable price.
• Understand Risk Management: Determine your risk tolerance and balance it with potential returns. Are you an aggressive investor willing to take on more risk for higher returns, or a conservative investor prioritizing safeguarding your capital? This will influence your choice of stocks.
• Utilize Tools for Effective Stock Selection: Take advantage of stock screeners available on brokerage platforms to filter stocks based on your investment goals, such as industry, return on investment (ROI), or earnings per share (EPS).
• Stay Informed on Market Trends: Follow market news sites, financial podcasts, and analysis sites to stay updated on the latest trends and performance of specific sectors or industries.
• Ask Key Questions Before Buying: Before investing in a stock, ask essential questions about the company, such as its profit, revenue, market, customers, PE ratio, differentiation from competitors, and its alignment with your investment goals.

Remember, investing in stocks carries risks, and there are no guarantees. It's important to do your research, understand your risk tolerance, and make informed decisions that align with your financial objectives when choosing stocks on SoFi Invest.

How to build a portfolio on SoFi Invest

Building an investment portfolio is one of the best ways to grow your wealth over time. Here is a step-by-step guide on how to build a portfolio on SoFi Invest.

Step 1: Determine Your Investment Goals

The first step to building an investment portfolio is to determine your investment goals. Are you investing to build wealth for retirement, to save for a down payment on a home, or something else? Your investment goals will determine your investment strategy.

Step 2: Choose the Type of Account

There are several types of investment accounts to choose from, depending on your investment goals and the investments you plan to make. Here are some common types of accounts:

• Individual brokerage account: This is a standard brokerage account that allows investors to buy and sell stocks, bonds, mutual funds, ETFs, and other securities. This account is ideal for investors who want to manage their own investments and have the flexibility to buy and sell securities as they wish.
• Retirement accounts: These include 401(k)s, IRAs, and Roth IRAs, which offer tax advantages and are specifically designed for retirement savings. They have contribution limits and may restrict when and how withdrawals can be made.
• Automated investing accounts: These accounts, also known as robo advisors, use algorithms to manage investments based on an investor’s goals and risk tolerance.

Step 3: Choose Investments Based on Risk Tolerance

Once you have set your investment goals, the next step is to determine your level of risk tolerance. If you are comfortable with higher levels of risk, you may be able to invest in more aggressive assets, such as stocks or commodities. If you are risk-averse, you may prefer more conservative investments, such as bonds or certificates of deposit (CDs).

Step 4: Allocate Your Assets

The next step in building an investment portfolio is to choose your asset allocation. This involves deciding what percentage of your portfolio you want to allocate to different investments, such as stocks, bonds, and real estate.

Step 5: Monitor and Adjust Your Portfolio

Once you have built your investment portfolio, it is important to monitor it regularly and make necessary adjustments. This may include rebalancing your portfolio to ensure it remains diversified and aligned with your investment goals and risk tolerance.

Other Considerations:

• It is generally recommended to pay off any high-interest debt, such as student loans or credit card debt, before investing large amounts of money.
• It is also important to have an emergency fund in place to cover any unexpected expenses.
• Consider the fees associated with different investment accounts and the impact they may have on your returns.
• Diversification is key to managing risk and volatility in your portfolio.

With a SoFi Invest® online brokerage account, you can trade stocks, ETFs, fractional shares, and more with no commissions for as little as $5. You also get access to educational resources to help you learn more about the investing process.

Frequently asked questions