Once you’ve done your research on the risk and return characteristics of the different asset classes, you may feel ready to start investing.
If your goal is to build an investment portfolio, you may want to consider diversifying. Diversification is the process of buying assets that are hopefully non-correlated; the performance of one is not necessarily related to the performance of the other. For example, you could build a portfolio of stocks and bonds, two non-correlated asset classes.
To do this, you can buy stocks and bonds directly, or you can buy them within funds. Funds can provide a way to achieve a diversified portfolio because they bundle many different investments together.
One fund could hold hundreds or even thousands of stocks, bonds, or other investments. For example, an S&P 500 index fund invests in the 500 leading companies in the United States. But the variety of funds doesn’t stop there. There are funds that invest in countries and industries all over the globe.
With SoFi Invest®, you can keep costs such as transaction costs and account fees low in order to build out your portfolio—whether you want to buy stocks or exchange-traded funds (ETFs). If you would like help creating an investment portfolio, SoFi Automated Investing uses a portfolio of ETFs based on your goals, risk tolerance, and projected timeline.