Why auto-invest?

Making small deposits on a regular basis is one of the keys to smart investing. This strategy can help you to manage the highs and lows of the market to your best advantage.

Set up Auto-Invest to make automatic, recurring deposits and investments. Choose a schedule that works for you (every week, every two weeks, or every month), and Auto-Invest can deposit cash into your account or invest it directly into your favorite investments.

Auto-Invest and the market: Why it’s your best friend

Will the market go up and down? YES. For example, the markets have recently reacted to the spread of Covid-19. And often with noise comes volatility, or turbulence.

Long-term investors (that’s you) shouldn’t be concerned with timing the market. No one can predict exactly what the market will do tomorrow or next week.

Consider market fluctuations as opportunities to continue adding to your portfolio at lower prices. If the market keeps dropping, keep adding those little amounts. If the market goes up, keep adding those little amounts. As a reminder, investing involves risk. Please take your financial situation into consideration when making investment decisions.

This is the idea of regular investing, which has dollar-cost averaging benefits, and it is a key to the Stash Way.

Never mind the market, hold steady

Look back at the last few decades. There were gains and declines through the dotcom bust, 9/11, the Great Recession, wars in Iraq and Afghanistan, and three separate presidential administrations. But staying the course has proved to be the way to go.

Imagine if you’d bought small amounts of these investments all through these ups and downs. You could have harnessed the gains from when the market was up, and bought more when the market was down As a reminder past performance is not a guarantee of future results.

Follow the Stash Way!

Stash recommends following the Stash Way, which includes regular investing, diversification, and investing for the long term.

Investing for the long term can help insure that you aren’t locking in your losses due to short term fluctuations in the price of a stock.

You can start investing on Stash with any dollar amount and build a diversified portfolio of stocks, bonds, and ETFs according to your risk preferences*.

The post Auto-Invest! How it Can Help You Get the Most Out of Your Investments appeared first on Stash Learn.

Recurring Transactions take the weight off your shoulders by putting your savings on autopilot—it will invest your money, and you won’t have to lift a finger. By automatically investing small amounts over a long period of time, investors are likely to save more. 

(Special note: All investing involves risk, and it’s possible to lose money by investing in the market.)

Recurring Transactions include two features: Auto-Invest and Round-Ups.

Here’s what Auto-Invest is all about.

What is Auto-Invest?

Auto-Invest allows you to automatically transfer money into your Stash accounts. You select the amount you want to set aside, when and how often you want to set it aside, and whether you’d like Stash to automatically invest it in your ETFs and stocks, or simply place the money in your cash account.

It’s an easy way to save and invest regularly, on a schedule that works for you.

How Auto-Invest works

Auto-Invest transfers money from your linked bank account into any of your Stash accounts—including your cash balance, retirement, custodial, or investment accounts.

Once you turn on Auto-Invest, you can expect Stash to automatically transfer money from your bank account, and deposit it into the accounts you specify.

To start or pause Auto-Invest, users can log in through the app or via the web, and find the settings in the Recurring Transactions menu on the Account page.

You can pause Auto-Invest, and restart it at any time.

Recurring Transactions and Auto-Invest: Setting you up for success

Recurring Transactions can make saving and investing more accessible for our customers.

Be sure to take advantage of all the great features that Recurring Transactions has to offer, so you can make saving and investing an automatic habit.

The post Recurring Transactions: How to Use Auto-Invest to Save Automatically appeared first on Stash Learn.

When I last wrote to you, Covid-19 was taking off as a pandemic and markets were very volatile. As economies around the globe shuttered, markets fell sharply from their historic peaks, and then rallied, recovering much of their losses. 

Over the last few trading days we have seen some increased Covid-related volatility (ups and downs), and this may continue as markets try to figure out how long it will take for the global economy to get back to pre-pandemic levels  

So what’s going on and how should you think about this as an investor?

Here’s the TL;DR. Markets have been on a tear, both up and down, for the last few months, and we’ve seen the same scenes flashing by over and over again. Back in March we had some of the biggest single-day decreases in market history, triggering circuit-breakers that actually shut down trading. While the S&P 500 dropped more than 30% three months ago, it has also risen more than 30%, as retail investors have ventured back in. We are almost right back to where we were pre-Covid. Proof in point: No one can predict exactly when the economy will be back to firing on all cylinders. Use Auto-Stash to average your price and help during periods of volatility. Even $5 a week can help you stay on the right path.

What I do know is that consistent investing—regularly buying quality companies and funds you believe in—and playing the long game is much better than trying to time the market. Don’t sweat the daily ups and downs. Remember, investing is about time in the market, not timing the market. Think of every trading day, regardless of whether markets are up or down, as an opportunity to add small amounts to your positions. 

Read on and I’ll explain more. 

Invest for the long term

Despite the market volatility, what has not changed is that we continue to follow the Stash Way, and focus on the long term.

While the current market situation is unique in so many ways, we’ve been in similar places before. I remember investing through my first bear market in the early 2000s right after the Dot-com bust. It wasn’t fun seeing my account balance decline; however, I always had a long-term perspective. In 2008, I lived through another big market correction and hopefully soon I can say I invested through another one, the pandemic of 2020. But again, I’m thinking long term, leaning on regular investing, and maintaining my focus. I know that regular investing and taking the long view can work—it’s powerful stuff.

We’ve shared this chart with you before, but I think it’s important to take another look, because it shows the power of regular investing, even with small amounts, through times of volatility. 

*Disclosure: Past Performance does not guarantee future results. The rate of return on investments can vary widely over time, especially for long term investments including the potential loss of principal. The S&P 500® is an index of 500 stocks seen as a leading indicator of U.S. equities and a reflection of the performance of the large cap universe, made up of companies selected by economists. The S&P 500 is a market value weighted index and one of the common benchmarks for the U.S. stock market. Calculations do not reflect the deduction of advisory fees and does not take taxes or withdrawals into consideration. The hypothetical assumes an individual was invested in the S&P 500 index (assuming a 100.68% cumulative growth rate for this time period) from the time period of 11/30/2007 – 3/6/2020 with a $10.00 weekly investment contribution. This example assumes No other account account deposits, investments, fees, or dividend reinvestment. Through the power of compounded growth, assuming a cumulative growth rate of 100.68% the hypothetical value would be $13,824 on a $6,400 total contribution for the time period. Data source: FactSet.

Turn on Auto-Stash

Make investing automatic. If you had invested $10 per week in the market, using Auto-Stash’s Set Schedule feature from the end of 2007 through the first week in March 2020*, you could have more than doubled your investment to have nearly $14,000 in your portfolio. That includes all the market dips, including the most recent Covid-19 pandemic.

Turning on or updating your Auto-Stash is the easiest way to add small amounts of money to your investments on a regular basis. This way, you’ll avoid the emotional aspect of investing and won’t get fooled into trying to time the market.

Auto-Stash is an incredibly powerful tool, and an essential part of the Stash Way.

By taking a long-term view and consistently investing small amounts, you can allow your money to work for you.

Follow the Stash Way

In up or down markets, always remember the Stash Way, our investing philosophy whose three pillars are investing regularly, focusing on the long-term, and diversifying. It doesn’t involve any crazy risk taking, but is a smart, time-tested way to invest. 

• Invest regularly: Even if you take small amounts and invest them every week or every month, that can add up through the power of something called compounding. Remember the Stash investing minimum is less than one dollar.
• Invest for the long term: Over the years, market gains have outpaced standard savings rates in bank accounts. Looking ahead, experts expect markets to return about 5%. With the power of compounding and regular investing, you have the ability to build wealth for the financial future you want.
• Diversify: Diversification means you’re not putting all of your eggs in one basket, so you can better weather the stock market’s ups and downs. That means you won’t put all of your money in too few stocks, bonds, or funds.

We are all in this together. And Stash is here for you—to help you meet your most important financial needs and goals during these challenging times.

Thanks for being a Stasher!

The post Markets Go Up and Down: Follow the Stash Way appeared first on Stash Learn.

We think it’s smart to try to automate as many of your savings and investing goals as possible. (Studies have shown the more you can automate, the more likely you are to meet your financial goals.)

Recurring Transactions from Stash gives you more ways to stack up savings.

Wait, what is Recurring Transactions?

Recurring Transactions is a Stash essential. You can program how much money you want to save toward your investments, including retirement. You choose how much you want to save and how often. The money moves seamlessly from your checking account to Stash so you can invest on Auto-Invest, no sweat required.

We think Recurring Transactions is so important, that we made it part of The Stash Way.

Auto-Invest

Auto-Invest is classic Recurring Transactions. It lets you transfer money into your Stash investing accounts automatically, on a set schedule.

Select the amount you want to save, and save it regularly on a schedule that works for you.

With Auto-Invest, you can set aside money into your cash balance, or into any of the investments you’ve added to your portfolio. It’s the easiest way to make regular investing into a habit.

You can also use Auto-Invest to fund your retirement and custodial accounts.

Go automatic!

With all of these new and improved features, you can always hit pause, and then resume using them at any time.

Be sure to take advantage of all the great new features that Recurring Transactions has to offer, so you can make saving and investing an automatic habit.

If you’re new to investing, Recurring Transactions is a great way to begin with recurring investments. You can start investing on Stash with just a dollar (or any dollar amount). Stash also offers fractional shares, or pieces of whole shares, of stocks and ETFs. So you don’t need a whole lot to get going.

By turning on Recurring Transactions, you can automate your investments into that portfolio without having to remind yourself.

The post Recurring Transactions and Auto-Invest appeared first on Stash Learn.

We tested it: As of August 2018, Stash customers that kept Recurring Transactions (formerly Auto-Stash) turned on for a year saved twice as much on average as Stashers who didn’t. (We also found that if you used Recurring Transactions from the Great Recession of 2008 to March 2020, you could’ve doubled your savings.)

Stash customers who had Recurring Transactions turned on for a year saved $1,432. Customers who didn’t? $665.59.

That’s a big difference.

What is Recurring Transactions?

With Auto-invest through Recurring Transactions, you can easily build a schedule to save and invest a set amount. You select the amount you want to set aside, when and how often you want to set it aside, and whether you’d like Stash to automatically invest it in your ETFs and stocks, or simply place the money in your cash to invest balance.

Convince me, why should I invest automatically?

Making small deposits and investments on a regular basis is one of the keys to smart investing. When you invest a little bit on a regular basis, you don’t need to worry about picking the right time to invest. If you invest on a schedule, you’ll get some at a higher price, and some at a bargain and your average price will be somewhere in the middle.

Regular investing has dollar-cost averaging benefits and is a key part of the Stash Way.

One thing to remember: When turning on Recurring Transactions is that this money will be taken out of your account automatically so if you don’t have enough money to cover the Recurring Transactions, your bank may charge you an overdraft fee.

Yes, I want to automate my savings!

Right on, just go to the Stash app and turn on Recurring Transactions.

Don’t have Stash yet? You can sign up now.

The post Recurring Transactions Can Help You Double Your Savings appeared first on Stash Learn.

Sure, time travel isn’t possible, but take a look at what would happen anyway. In fact, if you had used Recurring Transactions’ Auto-Invest feature to invest $10 every week from 2008 through every market up and down since then, your investments could have been worth $13,284.

That’s why, looking forward through times of market volatility, it’s important to consider continuing to invest small amounts regularly.

Recurring Transactions is a set of financial management tools from Stash, including Round-Ups and Set Schedule, that you can use to save and invest money automatically, on your timeline. With Auto-Invest, you can save a specific amount of money into your Stash investing accounts on a schedule that works for you. Auto-Invest can help you make investing a part of your financial routine. While Recurring Transactions was created more than a decade after the 2008 financial crisis, we can potentially use it to provide insights into the future. 

If you could turn back time

Here’s what your investing account might have looked like if you could have used Set Schedule from 2008 until March 2020: 

Disclosure: Past Performance does not guarantee future results. The rate of return on investments can vary widely over time, especially for long term investments including the potential loss of principal. For example, the S&P 500® for the 10 years ending 1/1/2014, had an annual compounded rate of return of 8.06%, including reinvestment of dividends (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009).The S&P 500® is an index of 500 stocks seen as a leading indicator of U.S. equities and a reflection of the performance of the large cap universe, made up of companies selected by economists. The S&P 500 is a market value weighted index and one of the common benchmarks for the U.S. stock market. Calculations do not reflect the deduction of advisory fees and does not take taxes or withdrawals into consideration. The hypothetical assumes individual was invested in the S&P 500 index (assuming a 100.68% cumulative growth rate for this time period) from the time period of 11/30/2007 – 3/6/2020 with a $10.00 weekly investment contribution. This example assumes No other account account deposits, investments, fees, or dividend reinvestment. Through the power of compounded growth, assuming a cumulative growth rate of 100.68% the hypothetical value would be $13,824 on a $6,400 total contribution for the time period. Data source: FactSet.

If you had invested $10 per week in a diversified portfolio, using Set Schedule from 2008 to now, you could have more than doubled your investment of $6,400 dollars. Through all the market dips, including the most recent one that started in February, 2020 related to the Covid-19 pandemic, you could have almost $14,000 in your portfolio. 

Back to the future

What you can learn from this model is that you shouldn’t be scared of market uncertainty. If you’re able to continue contributing a small amount of money on a regular basis to your investing accounts, you should do so.

The idea behind Set Schedule is something called dollar-cost averaging (DCA). DCA means investing over a specified period of time, for example months or even years, using a fixed amount of money. DCA allows you to buy shares of stocks or ETFs at different prices over the course of that time period. Sometimes you’ll buy less at a higher price, and sometimes you’ll buy more at a lower price, depending on the market.The price at which you buy those shares should average out over time. Compounding can also help amplify your investments over time.

No one can predict whether markets will go up or down. And dollar-cost averaging can be an important way to defend your money against market changes. By using Set Schedule, you can invest regularly and automatically in your diversified portfolio, without any extra effort. And by setting your investing schedule to automatic, you’ll remove emotions from the equation which might otherwise tempt you to time the market. That means you’ll be less likely to buy when stock prices are high, and sell when stock prices are low.

Investing with the Stash Way

Investing regularly is part of the Stash Way, our investing philosophy. The Stash Way includes regularly investing small amounts of money for the long term, in a diversified portfolio of stocks, bonds, and ETFs. 

You can start investing on Stash with any dollar amount.

The post How Investing Through Volatile Markets Can Increase Your Portfolio appeared first on Stash Learn.

We hesitate because we worry we may need that money immediately. We put it off saving until the next week. Or we just forget to do it. We have so much going on that remembering to add money to our investment accounts becomes an afterthought. We know that $5 or $10 isn’t that much, but when we have to go and physically do it, it becomes, well, manual labor.

Automation is one way to change a nagging chore into a seamless habit.

Recurring Transactions as a Commitment Device

Automatically investing with Recurring Transactions (formerly Auto-Stash) can ease the financial burden of investing tons of money all at once. If you invest small amounts on a regular basis, your wallet won’t feel as much of an impact.

Consider the idea of a “commitment device.” Stephen J. Dubner and Steven Levitt, the economists who authored the bestselling book “Freakonomics,” coined the term as a way to lock yourself into a course of action that you might not necessarily choose, but that produces a desired result.

In short, commitment devices can help you accomplish your goals by helping you stick to your plans. We can use these devices to make it easier to achieve our goals, whether it’s time management, getting in shape, or saving for a trip.

Consider the Recurring Transactions and Auto-Invest as commitment devices. By utilizing these tools to put money away for each of your goals, you’ll be better off than relying on your willpower alone.

Here are three things to keep in mind when automatically saving for your goals:

Tip 1: Start small

Ease the financial burden of investing tons of money all at once. Using Recurring Transactions will help you invest small amounts on a frequent basis, so your wallet won’t feel as much of an impact.

Tip 2: Go at your own pace

It’s not a competition. Everyone’s financial situation is different. Start small and work up from there to find the right amount to fit your budget.

Tip 3: Get comfortable

It’s important to leave room in your budget for expenses and other essentials. You can adjust or pause any of these tools at any time.

Commit to yourself: go automatic!

By automatically saving and investing on a regular basis, you’re reinforcing good money habits.

Consider Recurring Transactions as your commitment device—a commitment to saving for your future goals.

Turn it on, and you can harness the power of automation.

The post Commit to Yourself: How Automation Can Help You Save Money appeared first on Stash Learn.

But vacations can be expensive, and nearly three quarters of U.S. families plan to spend more than $1,000 on summer travel alone, according to one recent survey.

While that sounds like a lot of money, it’s possible to construct a savings plan to help you meet your summer vacation goals.

Save $1000 in ten weeks?

Here’s an example: If you could manage to set aside $100 a week, and put it in a vacation fund starting in May, you’d have $1,000 by mid-July—the height of summer. Even if you put aside half that amount weekly, you’d have $1,000 saved up by late summer. And late summer can be a great time to go away since it’s usually less crowded, things like lodging and car rentals are cheaper, and the weather is still fine.

How can I save money?

It’s important to budget in your financial life, and that includes budgeting to save. You never want to spend more than you earn, as that can quickly run you into debt.

Many financial experts recommend something called the 50-30-20 budget. Here’s what that means: Ideally, 50% of your monthly take-home pay should be devoted to the expenses you must pay every month, for things like rent, mortgages and student loans. Another 30% could be allocated to “wants,” or non-essential expenses such as the occasional dinner out or night at the movies. The final 20% of your budget should be allocated to saving and investing.

As part of your savings plan, experts also recommend creating a rainy-day fund. It’s a savings account that should contain between three and six months worth of expenses for unexpected events, such as medical care, car repairs, or even a lay-off. After you have your rainy-day money set aside, you can use the rest of your savings for other goals—such as a summer vacation.

Let Recurring Transactions help you

The more you can automate your savings, the more you can potentially save, according to economists. Stash has a set of savings tools for that: Recurring Transactions. They can help you automate savings.

While Recurring Transactions has two features that can help you save money, one called Auto-Invest lets you automatically transfer money into your Stash accounts. You select the amount you want to set aside, when, and how often you want to set it aside, and whether you’d like Stash to automatically invest it in your ETFs and stocks, or simply place the money in your cash account. And you can use your cash account to start saving for a summer vacation.

Get Stash

Stash wants to be your financial partner, and we want to help you meet your financial goals, including saving, investing, and building wealth.

The post Here’s How to Save for that Summer Vacation appeared first on Stash Learn.

We generally have good intentions when it comes to putting money aside for the future. Many of us promise ourselves we’re going to put money aside every week, but often, we don’t.

We hesitate and worry that we’ll need the money immediately, so we put it off.

Instead of reminding yourself to put money aside every week, consider automating it. It’s the easiest way to change a nagging chore into a seamless habit.

That brings us to Recurring Transactions (formerly Auto-Stash) and its quiver of powerful tools for developing better money habits.

What is Recurring Transactions?

Recurring Transactions (formerly Auto-Stash) is an easy-to-use tool on Stash, and we consider it to be one of the most important financial tools. Recurring Transactions features can help you save or invest small amounts of money consistently over time, regardless of market conditions. You won’t have to worry about trying to pick the right time to invest or “timing the market” which we don’t recommend.

Auto-Invest

Auto-Invest is Recurring Transactions’ bread and butter. It’s the feature that allows you to set up automatic transfers.

You select the amount you want to set aside, when and how often you wish to set it aside, and whether you’d like Stash to automatically invest it in your ETFs and stocks, or simply place the money in your cash account.

It’s an easy way to save and invest regularly, on a schedule that works for you.

Tips for investing automatically

Still uneasy about automating your finances? Fear not, here are some tips on how to get started:

• Start small. Pick an amount of money that you can handle leaving your bank account on a weekly, bi-weekly, or monthly basis.
• Ramp up. Feels good? Ramp it up and automate a little more. Another $5 or $10 a week can really add up over the years.
• Go at your own pace. It’s not a competition. Everyone’s financial situation is different. It’s up to you to find the right amount of money that you can comfortably save and invest.
• Be realistic. You don’t want to overdraft your account or not leave enough money in your account for the essentials.

Remember, though, that no matter the amount or the frequency, investing always involves risk.

Commit to yourself

Automating your savings is a cornerstone of our philosophy, The Stash Way. And by automatically saving and investing on a regular basis, you’re reinforcing good money habits.

Consider Recurring Transactions as your commitment device—a commitment to saving for your future goals.

Turn it on, and harness the power of automation.

The post The Stash Way: Automate Your Savings appeared first on Stash Learn.

Maybe you’ve just graduated from college, or rented your first apartment with friends. Life’s an adventure filled with so many possibilities, and it’s all about discovering who you are in the world.

But the sooner you start investing, the more time you give your money to grow—and the easier it might ultimately be for you to meet your long-term financial goals.

To help you get you off the sidelines, here are a few tips for investing while you’re young.

Jump in

With investing, you can learn by doing. It’s a little bit like learning to play a new sport or instrument.

Imagine if you wanted to kayak the Colorado River. You’d start by paddling on lakes and then progress to class I and II rivers, before moving up to more difficult whitewater. Eventually, with enough practice and experience, you might be ready to tackle the rapids of the Colorado River.

Investing is very similar. And as a young investor, you have the advantage of more time to study the markets, refine your investing strategies, and to learn from both your successes and failures.

The important thing is to take the first step.

Embrace compounding

If you invest while you’re young, you’ll also be able to take full advantage of the power of compounding as you build wealth over the next four, five, even six decades.

In simplest terms, compounding is any return earned on your principal, plus your past returns. For example, if you have money in a bank account, it’s the interest on that sum plus the past interest it has earned over time. If you have money in an investment account, it’s the percentage you may earn on top of your original investment, plus its previous earnings.

The sooner you start, the more time compounding can work in your favor.

The following chart* shows what would happen if you invested $6,000 annually until retirement at age 65, starting at age 25 compared to age 35, assuming an annual return of 5%.

Build saving into your budget

If you haven’t created a budget, now’s the time to start.

Not only can a budget help you determine how much you have for essential costs such as rent, student loans, groceries, and transportation, it can also show you how much you have left over to save each month.

While experts recommend putting away as much as 20% of your take-home pay into savings, if that’s too much to start out with, try a smaller amount. The point is that you put something away each month. (Find out more about setting a budget here.)

Once you’ve set up a cash buffer of between three and six months worth of savings in both a rainy day and emergency funds, then you can start thinking about investing.

Tools like Auto-Stash can help automate your investments, so you never miss a month.

Retirement savings accounts

Want to relax in your older age? If you’re investing for the long term, you should seriously consider putting money into a retirement account.

IRAs are tax-advantaged retirement savings accounts that can help you build a nest egg. There are two main types of IRAs—traditional and Roth—and the main difference between the two is when you pay taxes on the contributions and earnings.

With traditional IRAs, you make tax-deferred contributions, and then pay taxes when you take money out. With a Roth, you pay taxes on contributions, but withdrawals later on are typically tax-free.

The contribution limits for 2019 are the same whether you have a traditional or Roth IRA: you can contribute up to $6,000 each year (that bumps up to $7,000 a year if you’re age 50 and up).

If you have an employer-sponsored plan, such as a 401(k), consider contributing to this as well. (Generally speaking, you can contribute to both an IRA and a 401(k) in the same year, however, you may not be eligible for the full tax advantages of both accounts.  You can put away as much as $19,000 a year in a 401(k), and catch-up amounts of an additional $6,000 once you turn 50. Similar to a traditional IRA, your contributions to a 401(k) are tax-deferred.

Follow the Stash Way

Our investing philosophy is simple, and we’ve boiled it down into three basic steps that we call the Stash Way:

• Invest for the long term
• Invest regularly
• Diversify

Over the years, market gains have outpaced standard savings rates in bank accounts. Looking ahead, experts expect markets to return about 5%. With the power of compounding and regular investing, you have the ability to build wealth for the financial future you want.

And by diversifying,  you’ll hold a variety of investments that are not all subject to the same market risks, including stocks, bonds, cash, and commodities.

You’ll also be choosing investments in numerous economic sectors—not just the hot industry of the moment—as well as in different geographies around the globe. We offer exchange-traded funds (ETFs) which can help make diversification easy.

Special note: All investing involves risk. You can lose money when investing in stocks, bonds, mutual funds, exchange traded funds, and other market securities. Find out more about investment risk here.

Check out Stash

With Stash, you can easily invest in dozens of funds and individual stocks. And while you’re at it, check out Stash Learn. We have hundreds of stories to help educate you about investing.

So get off the sidelines and start Stashing today! You can start with just $5.

The post 5 Tips for Young Investors appeared first on Stash Learn.

The online streaming giant, which burned through billions of dollars in 2018, announced that it will increase prices for its memberships between 13% and 18%, marking the largest single price bump since Netflix debuted its platform more than a decade ago, and its fourth increase overall. The decision will affect more than 58 million customers in the U.S.

The cheapest Netflix plan will increase to $9 from $8, and the company’s high-end service, which streams content in ultra high-definition, will increase to $16 from $14. The new pricing strategy will take effect immediately for new customers, and will be phased in for existing customers over the next few months, according to reports.

The last time Netflix raised prices in late 2017, hundreds of thousands of subscribers canceled their subscriptions in protest, although the company still managed to increase its revenues, according to industry data.

Why is Netflix raising its prices?

Over the past decade, Netflix has seen massive growth in both users and revenue (it had 137 million subscribers as of October 2018, compared to around 40 million in October 2013), and has earned a coveted place among tech companies as a “FAANG” stock, along with Facebook, Amazon, and Google.

Over the years, Netflix has implemented price increases in order to keep up with its growing costs, and analysts say that’s the most likely reason that the company will charge more for its services. It spent around $13 billion on content in 2018, up from about $8 billion in 2017.

Here are some other possible reasons Netflix is raising its prices:

• The company is carrying a lot of debt. Although Netflix is profitable, it has nearly $14 billion in debt, following a $2 billion bond offering in October 2018, according to the New York Times.
• Content is expensive. Netflix pays high licensing fees for content, and is pushing for more original productions and programming, which isn’t cheap. (Think “House of Cards” and “Stranger Things.”)
• Competition is coming. Netflix is already fighting off streaming competitors such as Hulu, Amazon, and HBO Now. Disney also announced a streaming platform that is expected to launch this year (and will subsequently pull its content from Netflix), as are Comcast, and even Apple.

Keep up with important business and financial stories by subscribing to the Stash newsletter.

The post Green is the New Black: Why Netflix is Raising Prices appeared first on Stash Learn.

What now?

Our best advice is to look at investing as a long-term plan. No one knows what the market will do today, next week, or next year. Even the experts make a lot of guesses. From 1928 through the end of 2017, even with periods of volatility, the S&P 500 index has produced gains of 9.65% annually.¹ (TLDR – Consider  setting your Recurring Transactions (formerly Auto-Stash) and enjoy the ride.)

What can you do today?

Here are three ideas to consider:

1. Buy “Bonding with America” – Bonds are great investments to hold during times of high volatility, or when you feel like you want to reduce your risk in stocks. Consider buying some bonds and holding them for the long term.
2. Buy Your Mix – There are three flavors of a mix: Conservative, Moderate, and Aggressive. We recommend choosing a mix because it is a blend of both bonds and stocks, and you can think of it as a cocktail of investments to either complement your stock holdings or serve as your core holding at Stash. You will find the mixes in the “I want” category of investments. If you’re wondering what risk level you should pick, you can find our recommendations in your “account” screen. Read more about your mix investment here.
3. Single Stocks – If you’re really in this for the long term and can handle some short-term risk, another option may be to keep buying your favorite stocks. This is called “buying the dip”, in Wall Street lingo. Remember to add smaller amounts on a regular basis so you can benefit from dollar-cost averaging. When stocks drop consider it a SALE! Who doesn’t love a bargain? The trick is to keep adding small amounts on a regular basis. You can either buy a small amount now or turn on Recurring Transactions and let it happen automatically.
4. Diversify – much of the market turmoil today is due to one sector—technology. (In fact, an index that primarily represents tech stocks called the Nasdaq is having its worst month since 2008.)When you diversify, it means you’re not putting all of your eggs in one basket, so you can better weather the stock market’s ups and downs. When you’ve diversified your portfolio, it will hold a variety of investments that are not all subject to the same market risks, including stocks, bonds, and cash, as well as mutual funds and exchange-traded funds (ETFs).By diversifying, you’ll also be choosing investments in numerous economic sectors—not just the hot industry of the moment—as well as in different geographies around the globe.

Whatever you decide, just remember that investing is for the long term, while selling is sometimes a knee-jerk reaction that you might regret.

Stash on

We created Stash to provide you with the education and tools to invest for yourself, for the long term, in all types of markets. No one can predict the future but we can say that investing on a regular basis (especially when the market is volatile) can be a  proven strategy for growing wealth.

We hope the three ideas above can help you diversify your portfolio and keep investing for the long term.

Have a great day.

Stash

The post What Now? We Recommend Bonds, Your Mix, and Recurring Transactions for Stocks appeared first on Stash Learn.

Markets are reacting to the unexpected news of a potential trade war with China. It’s true that we are in uncharted waters. While Americans have lived through trade wars and tariffs in the past, President Trump cites national security and protecting intellectual property–American innovation and technology–as reasons for the tariffs.

Here’s the thing:

For first-time investors, seeing the market suddenly start going up and down like a roller coaster can be nerve wracking. Here’s our advice:

Turn on Recurring Transactions and keep on adding small amounts into your investments on a regular basis. That’s called dollar-cost averaging, and it’s really important. When you use dollar-cost averaging, you buy more shares on the dips, and fewer on the market highs, which will reduce the average cost you pay for shares over time.

While times may seem strange, market volatility is normal.

We’ve been in a tremendous bull market for a number of years now. Our economy is in solid shape — so solid in fact that the Fed has continued to raise interest rates. Markets have been trading at all-time highs.

Don’t think about the daily or weekly or monthly volatility. Think about the long term and the remember, the markets do go up and down.

If you take a longterm view, markets do go up. On average, if you look at the last 100 years, markets increase slightly more than 8% a year. Going forward, many experts predict a long-term expected annual return for US large cap stocks (i.e., the S&P 500) of 5.9%.”

That said, there are some years where the market is strong and some years where things are pretty bad. This is why you’ve just got to take that long term view when you’re thinking about investing.

So we may be entering a trade war. What can you do?

There are two approaches that we always think about. The first one is you can always move to less volatile investments. If you’re anxious, add bonds to your portfolio. They’re good long-term investments that can help dampen the fluctuations in your returns.

The other option that you have is to ride through the downturn and, if you’ve got little bits of money, periodically add little bits more over time, because you’re effectively dollar-cost averaging, as I’ve said above.

What is a trade war?

You can read our longer piece here. But in short, a trade war is when countries engage in a tit-for-tat over tariffs. In response to U.S. tariffs on Chinese goods and services, China could impose tariffs of its own on U.S. steel, as well as other exports.

The tariffs could also increase costs for U.S. consumers, and reduce demand for U.S. exports, which could dent our economy, according to experts.

How might tariffs increase costs at home?

Think of it this way: just about every manufacturer in the U.S. depends on steel, and costs for steel are about to go up. Businesses that use steel, or sell steel products, are likely to make up for the price increases by passing the higher costs along to consumers.

Over the last 20 years, the U.S. has entered into numerous trade treaties, the most famous of which is perhaps the North American Free Trade Agreement (NAFTA). These treaties, which are complex multilateral agreements that favor negotiations between all countries that sign, have reduced the threat of trade wars, in part by eliminating many tariffs on exported and imported products.

Trump has argued such agreements have flooded the U.S. with cheaper foreign-made goods, which make it difficult for U.S. manufacturers to compete.

In 2017, the U.S. signed a less comprehensive trade treaty with China, but Trump has said recently that products from China have cost the U.S. 6 million jobs, and have caused 60,000 factories to close. Economists reportedly dispute these figures.

Zoom out and look at the big picture.

Don’t think about the daily or weekly or monthly volatility. Think about the long term.

We have a saying at Stash. It’s all about “time in market, not trying to time the market.”

Selling effectively basically locks in any gain or loss you’ve made, but it sets your losses in stone.

Stay strong. Stay the course. Stay diversified. We’re in this with you.

The post How to Keep Stashing Through Storms (and Trade Wars) appeared first on Stash Learn.

Like what you’re hearing? Leave us a review on Apple Podcasts (or wherever you listen to your favorite podcasts).

There’s never a dull moment in the markets. Some days they’re up, some days they’re down. If you’re new to investing, this can be pretty scary.

If your first instinct is to panic and and sell when the Dow takes a tumble, take a breath. After all, it’s normal for markets to be volatile. Nearly a decade of growth? Now that’s unusual.

On this bonus episode, I sat down with Stash co-founder Ed Robinson. We talk about volatility, interest rates, and investing through good times and bad.

Got a question you’d like us to answer on the show? Drop us a line at teachmehowtomoney@stash.com. We’ll do our best to get to all of them.

The post Podcast: Learn About Market Volatility with Ed Robinson appeared first on Stash Learn.

Don’t take it it personally! It turns out that nearly everyone behaves the same way.

“My mantra is if you want to get people to do something, make it easy and remove the obstacles.”

Those are some of the takeaways from Richard Thaler, who won the Nobel Prize on Tuesday for his groundbreaking work in behavioral economics. Behavioral economics studies the irrationality and unpredictability of the human mind when it comes to finances and financial systems.

You need a nudge

Thaler has focused specifically on people’s tendencies to overvalue the things they already own, to seek fairness in their commercial transactions, and their need for external “nudges” to get them to behave rationally in their financial lives, among other things.

“My mantra is if you want to get people to do something, make it easy and remove the obstacles,” Thaler said in video posted Monday by the University of Chicago Booth School of Business, where he teaches economics.

Traditional economists have built their models assuming that people always respond rationally to financial circumstances and stimuli. Thaler disagrees.

Richard Thaler’s Nobel prize-winning work (A quick explainer):

Short term goals. The human mind is primarily focused on short-term gains and usually tries to gratify short-term wishes and whims. That helps explains why people have a hard time planning for their financial future, whether it’s saving money for a house, or putting cash away for retirement.

People tend to overvalue what they already have. This creates something that economists have termed the “endowment effect”. In one famous experiment that Thaler conducted, he randomly gave one group of students coffee mugs, worth around $3.  He set up a marketplace to enable the owners to sell their mugs to another group of students without mugs. The mug owners tended to value their much more than those who did not own mugs, and would only part with them for more than twice the original price.

Loss aversion. People also have an aversion to loss. And that aversion helps explain why people do things like hold onto single stocks after their prices has plummeted in value, rather than selling their shares.

Instinct toward fairness. Humans have an instinct toward fairness in commercial transactions. It explains why people would rather get wet than purchase an $8 during a rainstorm, when they know that umbrella typically sells for $5.

“Nudging” toward retirement?

We all need nudges to behave more rationally, particularly when it comes to saving for retirement. Thaler’s work led the United Kingdom in 2012 to require private employers to automatically enroll workers in retirement plans, letting workers opt out of the plans if they wanted to.

The strategy resulted in a 90% participation rate in private retirement plans, in contrast to the 60% rate usually achieved. Auto-enrollment has now become the norm for work-sponsored retirement savings plans in the U.K. and the U.S..

‘Irrational’ plans for $1 million Nobel prize

The Nobel Prize, which is awarded in Oslo, Norway, comes with a $1 million check.

Thaler, 72,  told the New York Times he hopes to spend his prize money, “as irrationally as possible.”

In addition to co-writing a best-selling book Nudge, with Harvard Law School professor Cass Sunstein, Thaler appeared in the 2015 film “The Big Short.”(He was the guy explaining how derivatives in the mortgage industry led to the financial crisis of 2008)

Thaler is credited with developing behavioral economics with psychologist Daniel Kahneman, who won the Nobel Prize in economics in 2002.

The post Nudge, Nudge: Nobel Prize Winner Tackles Irrational Financial Behavior appeared first on Stash Learn.