Have you been wondering how to invest in stocks? Only 55% of Americans invest in stocks. It doesn’t have to be a mystery or a big commitment. Not only are there plenty of ways to buy stocks, but you can buy stocks in an affordable manner as well.
At MoneyLion, we want to help you make the most of every dollar. That’s why we offer an approachable and diversified investment portfolio with no hidden fees. All you have to do is pay $1 per month to keep your account active. Check out our strategy as well as our method for investing in stocks and bond ETFs!
What is a stock and bond ETF?
Before we can talk about stocks and bond ETFs, we have to discuss the individual components.
- When you own a stock, it is like you own a piece of a company.
- Bonds are loans. When you put money towards a bond, the entity issuing the loan agrees to pay it back along with the interest accrued. Governments and corporations both issue bonds.
- An ETF (exchange-traded fund) is a mix of stocks and bonds. When you own an ETF, it’s like owning a portion of a portfolio. ETFs are likened to mutual funds, except ETFs can be traded and tracked on exchanges like the NYSE.
A stock and bond ETF has a combination of stocks and bonds. We’ll walk you through why we recommend a mix of the two!
Why are stock and bond ETFs a safe investment?
Investing will always carry some risk. But we think investing in ETFs is a great way to get started investing because ETFs take a lot of the individual guesswork out investing in individual stocks.
Why are ETFs a safer bet? Well, it all comes down to diversifying your assets. ETFs make it easy to diversify because they are already a mix of stocks and bonds. In other words, ETFs are diversified by definition, which naturally diversifies your investment portfolio.
Diversifying through an ETF means you get the benefits of both stocks and bonds. Stocks tend to give investors the most significant gains, but they also have the potential to cause considerable losses. Bonds have steady increases over time, but you are not going to make huge gains. So, having a mix of the two will benefit your portfolio!
Diversifying your portfolio leads to safer investing. MoneyLion’s strategy of low-cost ETFs offers a more diversified portfolio,includes equity, and incorporates fixed-income ETFs.
Personalized investing with automation
A fully managed, personalized MoneyLion investment account is an approachable way to start investing with as little as $5. Our allocation models take the guessing out of how to choose stocks.
Features like auto-invest, thematic investing, and portfolio rebalancing mean that MoneyLion can focus on your goals. Let’s walk through how you can get started with MoneyLion today!
Start investing with MoneyLion for $1 a month
You’re ready to get started investing, but you’re not sure how to invest in stocks. No worries! We’ve got you covered at MoneyLion. We’ll walk you through the process of getting started with automating your investments.
Step 1: Set a goal
It’s hard to start a new habit. This is why you must set a goal first! Goals give your habits a purpose.
What do you want your investments to do for you in the future? Do you see yourself retiring, traveling, or starting a business? Do you imagine yourself providing for a family in the future? When do you want to accomplish these goals?
These are questions that you need to consider before you walk down the path of investing. Your answers will help to inform all of your future decisions.
Step 2: Invest for as little as $5 with auto-invest
With MoneyLion, you get to choose how much money you invest and how often you invest. You can invest weekly, biweekly, or monthly. You also have complete control over how much you invest, meaning you can begin investing for as little as $5 if that’s what you want!
With your budget and your goals in mind, you can begin setting up an investment plan that works for you. In today’s day and age, there are so many options when choosing how much to invest. Get your money to work for you!
MoneyLion’s auto-invest feature makes it possible to invest on autopilot. All you have to do is choose the amount of money and the frequency of your investments. Then, set up an auto-transfer. This can turn a small amount of recurring money into a productive financial strategy.
Step 3: Choose a risk level with asset allocation
You get a say in your personalized asset allocation, and this helps you manage your investment risk. We make it easy to choose what fits your comfort level.
We’ve come up with risk levels thanks to the help of Wilshire Associates. They have over 30 years of experience managing some of the largest institutional investors, so we think they are a great resource!
Our six core portfolios are:
- Conservative portfolios: This is the portfolio with the least risk. It has a higher percentage of fixed-income (bond) ETFs and a small percentage of equity (stock) ETFs. This level gives you liquidity and stability. The one downside is that you will have a lower potential for returns.
- Moderately conservative portfolios: The next level raises the percentage of equity ETFs, but it keeps the majority still in favor of fixed-income ETFs. This is considered a somewhat conservative portfolio, but the risks and potential returns increase compared to the conservative portfolios due to a higher percentage of stocks.
- Moderate portfolios: Fixed-income ETFs and equity ETFs are weighted almost evenly, but there is still a slightly higher weight in favor of equities.
- Moderately aggressive portfolios: This portfolio will take on more risk, but you will also have the potential for better returns. There is a higher weight of equity ETFs and a sizable percentage of fixed-income ETFs, both of which help reduce risk.
- Aggressive portfolios: A more substantial risk exists at this level, but you will have a more maximized return potential. Equity ETFs are heavily weighted. There is a small percentage of fixed-income ETFs. The aggressive portfolio may experience more volatility but it will also yield higher long-term gains.
- We also offer Steady Income portfolios and Aggressive Equity-Only portfolios that both go beyond our core investment levels.
Step 4: Customize your investments with thematic Investing
Beyond picking asset allocation for your ETFs, MoneyLion allows you to easily invest in the things that you find most interesting. Make your portfolio mean something more with MoneyLion’s Thematic Investing feature.
Choose from MoneyLion’s three themes:
- Future Innovation
- Greater Good
- Earn and Grow
We will invest your money in industries that bring you the most passion.
Step 5: Keep a long-term mindset with your investments
View investments from a long-term perspective. By understanding that investments take time to grow, you will prepare for significant gains over long periods of time instead of wondering why nothing is happening immediately. You’ll be able to ride out the inevitable financial storms that lie ahead, too.
You can always feel confident that your MoneyLion investments will focus on your best interests with our rebalancing feature. We are constantly monitoring your account to keep your money working hard for you. We want to make sure your investments align with your chosen risk tolerance. This is why we regularly trade or rebalance your portfolio to keep your money on track.
Want to work on your credit first?
Investing doesn’t have to be complicated. We think a great way to get your feet wet is to jump in with ETFs. With our help, MoneyLion can take a lot of the guesswork out of the process. If you’re focused on getting your head above water and your credit is an issue, MoneyLion can help. Check out our Credit Builder Plus membership and the many ways we have already helped others build their credit!