This morning, SpaceX began trading on the Nasdaq under the ticker SPCX after pricing its shares at $135 each, raising roughly $75 billion in the largest initial public offering in history.

Millions of people who have never owned a single share are placing their first orders today, which makes this the perfect moment to understand the machine they are stepping into.

How Does the Stock Market Work?

The stock market is a network of exchanges where buyers and sellers trade small ownership stakes in public companies, with prices set continuously by supply and demand.

When you buy a share, you are not buying from the company itself in most cases. You are buying from another investor who wants to sell, with the exchange matching the two of you in fractions of a second.

Companies use the market to raise money, and investors use it to grow wealth, collect dividends, and sell their stakes whenever they choose.

Where Stocks Actually Trade

The two dominant U.S. exchanges are the New York Stock Exchange and the Nasdaq, which together list thousands of companies worth tens of trillions of dollars.

Regular trading runs from 9:30 a.m. to 4 p.m. Eastern on weekdays, though many brokerages now offer extended or even overnight sessions.

The Securities and Exchange Commission regulates the entire system, and its investor.gov resource explains the rules that protect everyday traders, from disclosure requirements to safeguards against manipulation.

How Prices Are Set

Every stock price you see is simply the last price at which a buyer and a seller agreed to trade.

If more people want to buy a stock than sell it at the current price, the price rises until enough sellers appear. The reverse pushes it down.

That is why prices move constantly during the trading day, reacting to earnings reports, economic data, interest rate decisions from the Federal Reserve, and plain old investor mood.

Today’s SpaceX debut shows the mechanics at scale: retail investors alone submitted more than $70 billion in orders for a deal that offered roughly 555.6 million shares, and that imbalance between demand and supply is what determines where the stock opens.

How You Buy and Sell

You access the market through a brokerage account, which works like a bank account built for investing and typically takes 10 to 15 minutes to open online.

Most major brokerages charge zero commission on U.S. stock trades, a standard that took hold across the industry in 2019.

Once funded, you enter a ticker symbol, such as AAPL for Apple or SPCX for SpaceX, choose how much to buy, and submit an order.

A market order executes immediately at the best available price, while a limit order only fills at the price you name or better.

Fractional shares let you buy a slice of a single share for as little as $1 or $5, so a $135 stock does not require $135 to own. Benzinga’s guide on how to buy stocks walks through each step in detail.

Why Most People Do Not Pick Individual Stocks

Roughly half of the money in U.S. investment funds now sits in passive vehicles that track an index like the S&P 500, which holds 500 of the largest American companies.

Buying one index fund spreads your money across hundreds of businesses at once, smoothing out the wild swings any single stock can take.

If that approach appeals to you, this breakdown of how to invest in index funds covers picking a fund, comparing fees, and placing your first order.

Choosing where to open your account matters too, since platforms differ on research tools, fractional share access, and retirement account options, and Benzinga’s rankings of the best stock brokers in the U.S. compare the leading choices side by side.

If you want a single app that combines commission-free trading, fractional shares starting at $5, and IPO access for eligible members, SoFi’s active investing platform lets you open an account in minutes with no minimum balance.

What Happens After Today’s Record IPO

SpaceX will not be the last giant to test the market’s appetite, as strategists expect IPOs from Anthropic and OpenAI in the near future.

Index providers are also weighing how quickly to add SpaceX to major benchmarks, a decision that would route money from millions of retirement accounts into the stock automatically.

For new investors, that is the deeper lesson of this week: even if you never type SPCX into an order screen, the stock market has a way of making you an owner anyway.

The post How Does the Stock Market Work? by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Wonder what blue chip stocks to invest in? Check out the Best Blue Chips Stocks Right Now.

To see some of the best examples of blue chip stocks, look no further than the companies in the Dow Jones Industrial Average. You’ll find Microsoft, Apple, Walmart, Disney, McDonald’s and Coca-Cola.

Generally, blue chips are regarded as the best of the best. That doesn’t always mean the best one-year performance. That honor often belongs to smaller companies, equities that might continue rising or that might flame out just as spectacularly.

Blue chips are sturdy and dependable. They’re big companies as opposed to startups or middle market companies that haven’t yet found their stride. Blue chips also have a reputation for maintaining profits and stock performance regardless of what the rest of the market or economy is doing.

That’s not to say that large market movements won’t move blue chips as well, but you can think of a blue chip stock as an ocean liner while many other stocks are much tinier. During the market crash of 2008 and 2009, the S&P 500 lost nearly half its value, while some key names in the Dow held their own. Walmart, a blue chip, was up.

Blue Chip Stocks Define an Industry

Imagine any large industry and one or two blue chip stocks will likely come to mind. When we think of the computer industry, we think of Microsoft, Apple and Intel, all blue chip stocks, and all companies that help to define the industry as a whole.

Because blue chip stocks are often the defining brands in large industries, you’ll find that they have a market capitalization measured in billions, often hundreds of billions, or even trillions of dollars, like Apple.

Blue Chip Stocks Offer Higher Dividend Payouts

Just as there’s no official definition for blue chip stocks, there’s no requirement that a blue chip stock pays a dividend, but it’s a common trait. As a result, companies like Cisco pay a dividend of over 2.7%, General Electric pays its shareholders 0.32% and Coca-Cola investors enjoy a brisk and refreshing dividend of around 3%.

The current dividend yield for Verizon is a whopping 4.5%. Some blue chip companies, however, aren’t as attractive for investors seeking growth through dividends, like VISA, which currently pays less than seven-tenths of a percent as a dividend yield.

The effect of reinvested dividends on a portfolio over the long term can create stratospheric gains. Reinvested dividends purchase more shares which then pay more dividends, and this process repeated over decades has helped build the treasure chests of some of the world’s wealthiest people. Dividends aren’t everything.

Many of the equities with the highest dividend yields in the years leading up to the 2008/2009 crash were real estate investment trusts (REITs), which sometimes paid double-digit dividend yields.

Many of those same names are trading for pennies on the dollar now — or have disappeared into obscurity — illustrating the importance of being able to grow revenue and profit consistently with a sustainable business model. Blue chips can have down or flat years in regard to profit performance but don’t usually miss the mark by much, making a recovery a near certainty because of their brand awareness and entrenched market share.

Blue Chip Has Origins in American Poker

The term “blue chip” has its origins in the game of poker. In American style, a basic poker set has red, white, and blue chips, which have the highest value. Of course, most investors know that there’s no such thing as a safe bet, but blue chip stocks are often regarded as safer than other investments. This term has alos found its way into the sports world, indicating a highly valuable and talented prospect.

In many cases, that’s true. However, many big names in the blue chip stock world have fallen over the years, including Washington Mutual, Bear Stearns, Lehman Brothers and General Motors. Branding has value, and it’s possible some of these companies can return to their once lofty positions within their respective industries.

Most blue chips keep on chugging, increasing sales and profit consistently.

Blue Chip ETFs

Investing in blue chip companies is easier than ever, with several blue-chip focused ETFs available, index ETFs that track the Dow, or even ETFs that track dividend-focused strategies for blue chip companies, such as the Dogs of the Dow strategy, which specifically targets the 10 companies in the Dow Jones Industrial Average with the highest dividend yield.

Of course, a number of blue chip-focused mutual funds are available as well, with mutual fund leaders like Vanguard offering options for automatic investing, making investment allocations effortless and painless.

Investing in Blue Chip Stocks

Blue chip stocks often represent who we are as a society, defining their industry and, when viewed as a group, broadly defining the American consumer by extension.

What’s even better is that blue chip stocks often pay us dividends for investing in the companies that make the products or provide services we purchase every day.

Stability and Reliability

Blue chip stocks represent shares in well-established companies known for their consistent performance and stability. These firms are often industry leaders, enabling them to better weather market fluctuations compared to smaller or less established firms.

Dividends and Income Generation

A significant number of blue chip stocks boast a history of providing steady and often increasing dividends. This feature can furnish investors with a reliable income stream, appealing to those seeking both capital appreciation and regular financial returns.

Long-Term Growth Potential

Blue chip stocks typically exhibit strong fundamentals, including solid earnings and a competitive advantage in their sectors. This positions them favorably for sustained growth, making them a prudent choice for investors aiming to accumulate wealth over the long haul.

Lower Risk Profile

Opting for blue chip stocks generally entails a lower risk level compared to investing in smaller, more volatile companies. Their established presence in the market, combined with financial resilience, helps reduce some of the risks associated with stock market investments.

Market Liquidity

Blue chip stocks are commonly traded and generally have high market capitalization, ensuring better liquidity. This characteristic facilitates the buying and selling of shares without significantly affecting the stock’s price.

Frequently Asked Questions

The post What are Blue Chip Stocks? by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Depending on how you trade and which indicators you use most often, you may or may not need a paid subscription for charts useful for planning your next trades. Paid options on a stock graph like Benzinga Pro offer additional charting tools or the ability to split your screen into several charts for a full analysis. You can get more charting tool options with paid options, but some of the better free charting options provide many commonly used technical indicators.

While stock charts are not the only tool you should use to make trading decisions, they give you more insight than any other tool. In fact, all other tools come back to your stock charts. There are several places to find quality charts, indicators you should know and additional studies you can do. There are even recommended volumes on the subject. As you review these charting platforms, remember that you can change your strategy at any time, use different charts, adjust your indicators and create a system that works best for you.

Quick Look at the Best Stock Charts:

• Best for All Trading Levels: Benzinga Pro
• Best for Strategic Traders: StockClock
• Best Free Service: Stockcharts.com
• Best for Advanced Suite of Trading Tools: ChartPrime
• Best for Charts: TradingView
• Best for Beginners: FINVIZ

6 Best Stock Charts

You want the best possible stock graph with a premium on easy-to-use features, tip-top functionality, real-time data and more. Here are Benzinga’s top picks.

Note: Our favorite charting tools may or may not be available with free charting platforms.

1. Best for All Trading Levels: Benzinga Pro

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Benzinga Pro is a real-time news streaming services packed with trade alerts, market screeners, audio alerts and much more. It’s designed for fast-paced traders who need access to the right information at the right time.

The major benefit of Benzinga Pro is its ability to deliver real-time streaming news. The platform is designed to help traders get access to breaking news in real-time but you can also sign up for trade alerts, audio alerts and more.

Benzinga Pro has TradingView charts within the platform, including all indicators. The only thing it lacks is the ability to share indicators and charts. For anything it lacks, it makes up for it with stackable indicators. The dark background is easy to read, the indicators can all sit on the same chart and the charts themselves are rung with a massive amount of information.

You can review a company’s earnings reporting calendar, dividend calendar, high, lows, market cap and much more.

Choose the Basic plan for $37 per month or the Essential plan for $197 per month.

Why We Picked It: With Benzinga Pro’s interactive and customizable charts, users can analyze historical data and identify market trends, making it easier to anticipate potential price movements

2. Best for Strategic Traders: StockClock

Powered by Benzinga, StockClock’s fast financial newsfeed lets you gather insight way before stocks start moving. You can filter stocks by the criteria important to you, including price, market cap, movement and more.

Build your own watchlist with powerful segmenting tools and get real-time price alerts sent directly to your smart device with push notifications. You’ll know exactly when a stock hits a certain price.

You can access StockClock for just $10 per month and you can save 20% by billing annually. Start your 7-day trial now.

Why We Picked It: The intuitive design of StockClock allows users to effortlessly navigate through various chart types, indicators and technical analysis tools, enabling them to make informed trading decisions. 

3. Best Free Service: Stockcharts.com

Despite its decidedly old-school feel, Stockcharts.com offers clean charts with lots of indicators that are easy to find and apply to your chart. The free version of StockCharts.com limits overlays and indicators and also limits the size of the chart. Depending on your screen size and charting needs, the paid version may be a worthwhile investment if you enjoy StockCharts.com’s functionality.

Paid subscribers are treated to more charting tools as well. StockCharts.com also several other free tools and other goodies, including predefined scans so you can find stocks with bullish or bearish chart indicators as well as StockCharts TV, which analyzes live charts of current price action in the markets. Subscription prices for stockcharts.com currently range between $19.95 and $49.95 per month and you can kick off your subscription with a free 1-month trial.

Why We Picked It: Users have access to an extensive array of technical indicators and overlays, which can be customized to suit individual trading strategies. 

4. Best for Advanced Suite of Trading Tools: ChartPrime

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In the dynamic world of financial markets, the tools in your trading toolkit can profoundly influence your trading journey and success, regardless of your trading experience, skills, technique or risk management strategy. ChartPrime’s state-of-the-art trading toolkit equips traders of all levels with the requisite resources and technology to enhance their trading strategies, analyze and predict the markets and make informed trading decisions, ultimately leading to improved trading performance.  

With its cutting-edge trading suite, ChartPrime transforms complex technical analysis into actionable insights, empowering traders to identify trading opportunities and gain a competitive advantage in the market. Despite being a relatively young company, ChartPrime’s combination of algorithms and active community via its Discord servers and its training and educational resources fast-track learning and growth, making it a valuable tool for diverse traders. 

ChartPrime offers a universal advantage, adaptable to diverse markets and tradable instruments. Whether you’re a forex dealer seeking forex indicators to support your trading strategies or a stock and crypto trader, ChartPrime is a versatile solution that suits all. Read on for a comprehensive review of ChartPrime’s trading suites, the pros, cons, core offerings and how it compares with competitors. 

Best For

• Beginners and expert traders seeking robust indicators and effective technical analysis tools to support their trading strategies and turbocharge investment potential
• Forex traders, equity and cryptocurrency investors looking for advanced suites of trading toolsets for enhanced market insight and profit maximization
• Proprietary trading firms seeking sophisticated technical analysis toolkits to help improve the performance of their properties
• Traders or investors looking for an interactive and community-oriented trading equipment marketplace with excellent training and educational resources to fast-track learning and growth
• Those who prioritize technical over fundamental market analysis and so require access to premium indicators and other advanced toolkits with regular upgrades for optimal performance

Pros

• Advanced or cutting-edge premium trading suite, including multipurpose indicators and other tools
• Excellent training, educational and research resources via interactive weekly classes, tutorials and blogs
• Community-oriented Discord channel to facilitate collaboration and sharing of trading ideas, fast-tracking learning and growth
• Consistently and automatically updated with new features and tools, ensuring traders or investors have access to the latest technologies
• Access to daily trade signals and setups by the company’s team of professional analysts
• 7 days money-free trial
• Excellent and professional customer support

Cons

• Relatively costly and out of reach for undercapitalized traders
• An average trader may not easily understand how the algorithm works
• Works only with the TradingView platform
• Might not be suitable for all trading styles

ChartPrime brings you face-to-face with toolkits that are designed to serve different kinds of traders. Whether you invest in crypto, forex, stocks, etc., there’s something for you.

Moreover, you can use the Discord community to learn more about your assets. Algorithms help you make the most of both alerts and indicators, and you even set up a TradingView account so that you can see amazing charts that will lead you to more actionable investment ideas.

Why We Picked It: ChartPrime also integrates cutting-edge technology to deliver high-performance charting tools. With features like algorithm-based signals, advanced pattern recognition and AI-driven analytics, the platform helps traders identify potential opportunities and risks in the market. 

5. Best for Charts: TradingView

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TradingView is one of the most widely used platforms for financial charts, technical analysis and trading. It gives 100M traders and investors access to interactive charts, screeners, alerts, watchlists, market data, community ideas, paper trading and broker integrations in one web-based platform.

Whether you trade stocks, ETFs, Bitcoin, gold, futures, forex, cryptocurrencies or options, TradingView helps you analyze markets with professional-grade charts and real-time market data.

Best For

• Professional investors
• Investors with programming experience
• Traders who need minute-by-minute updates

Pros

• Impressive selection of research tools
• Comprehensive stock screening
• Free accounts available
• Wide selection of engaging educational resources

Cons

• Customer service choices not all-inclusive
• Higher-tier plans out of some investors’ budgets
• Certain areas of the website poorly organized

TradingView’s free version provides access to 3 simultaneous indicators. You can also apply indicators created by other TradingView members. We found TradingView’s interface a bit more difficult to read and to navigate than some other charting options but liked TradingView’s snapshot gauge display that clearly indicates combined buying signals (or selling signals).

Tradingview allows you to find your inner Picasso, allowing you to draw anything you’d like on your chart, including notes, price direction arrows or anything else that you find useful when making a trading decision. Many other charging options only allow you to draw straight lines, such as those used to indicate resistance and support. You can also display multiple charts at once, splitting your display so you can take in the big picture.

To access all of TradingView’s features, you’ll need a subscription, with a pro plan starting at $24.95 a month and additional plans ranging up to $49.95 per month.

Why We Picked It: TradingView provides seamless integration across different devices, allowing users to monitor their investments from anywhere, whether on a desktop or mobile device, which further enhances its appeal.

6. Best for Beginners: FINVIZ

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Finviz helps investors, especially beginners, by helping visualize data on thousands of assets across several categories.

Best For

• Beginners
• Charting
• Data visualization

Pros

• Technical analysis
• Trend tracking
• Backtesting

Cons

• You may want something that is easier to skim

FINVIZ also offers very useful charts. Automatically generated technical analyses, including a candlestick chart, support and resistance levels, and moving averages are available.

An upgrade to FINVIZ Elite will buy you real-time data, intraday charts and advanced charting tools. For simpler analysis and trend trading, running a chart after market close is often enough to be a useful tool for trades you plan to execute the following day. However, free charts can’t be modified with FINVIZ.

FINVIZ’s clean charts and quick overview — even the free versions — are also a great way to confirm or disprove your analysis from other charting data. FINVIZ charges a $39.50 monthly cost and $299.50 annual cost. Both offer Elite feature access and provides access to real-time and pre-market data, advanced charting capability and an advanced screener. You can also unlock backtesting so you can see which indicators matched up with actual market events.

Why We Picked It: FINVIZ provides a clean and intuitive design, allowing users to navigate effortlessly through different sections such as stock screens, charts and news.

What is a Stock Chart?

Stock charts provide a graphical way to display stock data, including price and volume. The simplest charts display price data plotted on a line graph as it changes over time. Candlestick charts indicate trading volume in addition to price data. More complex charting tools allow you to set additional indicators to fully understand the trading activity for a given equity or index.

Remember, however, that a stock chart is often flanked by a number of items that you can use to your advantage. For example, most charting programs allow you to pull down a menu that includes several indicators. You can layer those indicators on the chart so that you can compare.

Plus, you can review historical data by opening up the chart to cover the last 6 months, year, 2, years, etc. When you do this, you can review trends that might not be obvious if you only check the last few months of results. For example, you may find that a stock has always recovered after a major dip, or it can never seen to surpass a certain price.

Stock Chart Indicators

If you put 100 traders in a room and place a stock graph in front of them, you might get 100 different answers on which indicators are the best for trading. But, a few indicators have proven their worth over time. Some of the more reliable indicators focus on short-term to long-term trends as opposed to intraday price movements.

Trend trading, in many cases, misses the highs and lows for a stock or index because the buy or sell signals happen after a trend has started. This approach can limit returns but has the advantage of waiting for a trend to be confirmed before you make a buy or sell decision. You can ride the price up, then exit the trade when a decline is confirmed — you can miss the lows if the trend continues down. While this creates an admittedly slower reaction time for traders, other indicators that try to time trades more precisely may not be as reliable.

Your trading strategy often determines the indicators that you focus on. However, you must be willing to adjust your strategy with the market, as needed. Yes, you may grow very fond of a particular indicator until it stops working, and you must make a change so that you can rebalance your portfolio and remain in the black.

Moving Averages (and Crossovers)

A moving average tracks the average price of a stock, commodity or index over a given period of time. A 200-day moving average looks back in time, averaging the price over the last 200 trading days. A 50-day moving average does the same, but with a shorter time frame for the average. These 2 indicators are often used to find buying or selling signals. For example, when these 2 lines cross on a chart, it’s usually seen as a confirmed trend, sending a buy or sell signal depending on the value of the 50-day moving average relative to the 200-day moving average.

• When the 50-day moving average falls below the 200-day moving average, it’s a sell signal.
• When the 50-day moving average rises above the 200-day moving average, it’s a buy signal.

Daily stock prices compared to the 50-day and 200-day indicators are also sometimes used to determine a trend. This method can be less accurate and can create false signals because daily pricing is more volatile and intraday stock prices can be pushed around by news or large orders on thinly traded stocks.

Moving Average Convergence Divergence (MACD)

The moving average convergence divergence (MACD) indicator is an oscillator indicator and is a bit more complex than simple moving averages, but still uses data from moving averages to signal potential entry points or exit points. The MACD shows both trend and momentum, helping to differentiate stronger buying or selling signals from the sometimes unconvincing signals that can come from a chart that isn’t moving decisively and may change direction again. MACD uses 0 as a baseline, with MACD lines above 0 indicating a potential entry point and lines below 0 indicating a potential exit point. 

Relative Strength Index (RSI)

RSI considers the number of days up versus the number of days down on a chart as a part of calculating the relative strength index. You can find out whether a stock is overbought, potentially indicating near-term profit-taking and an impending swoon for the stock, or whether a stock is oversold and potentially due for a bounce. RSI is shown as a value between 0 and 100. A value above 70 is considered overbought, while a value below 30 is considered oversold.

On-Balance Volume (OBV)

Another popular indicator is on-balance volume, which looks at volume in uptrends against volume in downtrends. This indicator becomes relevant when confirming buying or selling signals. Stock prices can drift aimlessly at low volume, triggering buy or sell signals as they wander up or down the chart. However, without convincing volume, moving averages and crossovers alone can be misleading and direction can quickly change when news hits or normal trading volume returns.

Bollinger Bands

Bollinger Bands are an tool plotted on your standard stock chart, working in pairs to illustrate the range of prices that a stock could see. When you superimpose the bands over the price of a stock, you can see the price bounce within those lines most of the time. In fact, you might see the price fluctuate wildly within the bands, hitting the top and bottom respectively.

A line in the middle of the stock chart the moving average—think of this as a simplified representation of the stock’s movement. As the bands constrict, volatility decreases. If the bands separate, volatility increases, indicating that a price trend may soon some to an end.

Adding Bollinger Bands to your stock charts is also a good way to get your bearings. You might look at the price fluctuation of a stock for the first time and have no idea where it is going. Looking over the moving average in the Bollinger Bands helps you see where the price is likely going. Finally, if the stock price exits the bands, a new trend may be emerging. If the price suddenly comes back into the scope of the bands, that trend is not likely to continue.

Free vs. Paid Stock Charts

There are some great free stock chart platforms out there but most have limitations, often encouraging users to upgrade for additional features or functionality. In addition to a typically limited feature set, free charts may not provide up to date or complete data.

A 15-minute delay is common, which can make free charting tools less useful for day trading. Volume reporting may also be affected for free charts that only display limited exchange information. Paid options provide real-time pricing with live updates, unlock more charting options and may allow additional features like the ability to save charts or use more overlays with your charts.

Keep in mind, however, that financial information sites like Benzinga provide real time information and a range of indicators that you can display all at the same time. With a large selection of indicators and a readable chart, you can make wise investment decisions. For a small membership fee, you can see everything you need all in one place.

Whether you need real-time data depends on your trading style. For day traders who might hold a stock for hours, minutes or even seconds, real-time data isn’t just valuable, it’s imperative. Active traders are likely to have access to charting with real-time data through their online brokerage account. Trend traders may hold a stock position for days or weeks and real-time data isn’t as important but charting tools that provide the most reliable buy or sell signals is still an important consideration.

Compare Online Stock Brokers

Which online brokers are best? You’ve done the work and looked for the best stock charting platforms, but you still need a quality broker that can provide you with the best trading experience. Take a look at Benzinga’s picks for the best brokerage firms for stock trading. Using reviews and insights on these platforms, you can select a broker that works with you, allows you to succeed and teaches you more about investing.

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Best For

Active and Global Traders

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Active and Global Traders

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Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

• Access to international markets
• Active traders
• Detailed mobile app that makes trading simple
• Wide range of available account types and tradeable assets

Pros

• IB SmartRouting provides significant price improvement vs. industry
• Fractional trading allows investing regardless of share price
• Industry’s lowest margin rates
• Earn more by lending your fuly-paid shares

Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

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81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments. 

Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.

The Plus500 CFD platform is for CFDs. The Plus500 Futures platform offers futures for U.S. customers, and Plus500 Invest offers stock trading.

Best For

• Traders looking for a smooth mobile experience

Pros

• Great mobile app
• Low spreads and commissions
• Unlimited demo account
• Plus500 offers three platforms: Plus500 Futures, Plus500 Invest and Plus500 CFD.

Cons

• Only derivatives are available
• Futures are available to U.S. residents while CFDs are not available for U.S. residents.

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Trading Ideas

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Trading Ideas

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Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research. 

 

Best For

• Stock and ETF investors
• Crypto investors
• Investors looking to diversify with alternative assets or bonds and options

Pros

• Commission-free stock and ETF trading
• Fractional share investing
• Advanced data, tools, and insights with Public Premium

Cons

• You can’t transfer crypto to another wallet
• No mutual funds or precious metals
• At this time, only offers individual brokerage accounts and not IRAs

Best For

Commission-Free Mobile Trading

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Commission-Free Mobile Trading

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Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.

Best For

• Beginners looking for simplicity
• Mobile-first investors
• Commission-free trades

Pros

• User-friendly mobile app
• Instant double
• Cash management
• Access to cryptocurrencies

Cons

• Limited research tools
• No mutual funds available
• Basic customer support options

Best For

Active Short Sellers

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TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.

Best For

• Traders seeking high transparency and mobility in a stock trading program
• Those attracted to commission-free trades
• Those seeking a free version of a high-quality trading program

Pros

• 24/7 live customer support
• Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
• Mobile app allows users to access stocks and trade in real-time while on the go

Cons

• Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
• Mobile app could offer more features

Choose the Best Stock Chart

Day traders or frequent traders benefit from access to real-time data and the more advanced charting options available with paid subscriptions. Trend traders (or if you’re looking for an entry or exit point for a longer-term position) may not need all the features available in the most expensive subscriptions. Yes, a stock graph is powerful, but you should tailor your purchase to your needs.

Paid charting platforms can range from about $10 per month up to as high as $90 per month, depending on the features you add or the subscription level you choose. StockClock is our top choice for affordability, with its flexible, powerful segmenting tools and real-time price alerts.

Frequently Asked Questions

The post Best Stock Charts by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

While they both track the value of a stock index, index funds and exchange traded funds (ETFs) can take slightly different routes to do that. Both can also track markets outside of standard equity markets like precious metals, commodities like wheat, or even cryptocurrencies.

Much to the confusion of new investors, the two terms are sometimes used interchangeably, which isn’t always accurate but speaks to their similarities.

Index funds and ETFs have grown in popularity due to their simple-to-understand goals and straightforward approach to investing. Both investment vehicles are also funds, meaning they own a basket of stocks, bonds, etc., and investors buy shares of the funds rather than directly investing in the underlying stock or asset group.

There are, however, differences in how the two types of funds are traded, differences in their expense structures, and some differences in their tax treatment, which can affect performance. Because of this, you want to make a choice that better aligns with your long and short-term goals. Some people are concerned about how much they can profit right now, but others are willing to invest for long periods of time.

What is an Index Fund?

An index fund is a mutual fund that’s designed to mimic a benchmark index. Unlike an actively managed mutual fund that has a management team that picks stocks to buy or sell based on the stated goals of the fund, an index fund works more like a mirror of the market or a smaller part of it, like an index. A specialized mutual fund, an index fund is purchased through the mutual fund company or through an intermediary, such as a broker.

Vanguard started the index fund craze in the mid-1970’s with the first index fund designed to mirror the S&P 500, now called the Vanguard 500 Index Fund, one of the best-known mutual funds in the market.

The fund began with a mere $11 million invested. Index funds, now available through a stunning number of mutual fund companies, make up an estimated 20% of all mutual funds.

How Do Index Funds Work?

Index funds are designed to mimic the performance of a specific market index. They achieve this by holding a diverse portfolio of the same stocks or securities in the index. This allows investors to gain broad market exposure. Index funds usually have lower management fees than actively managed funds. This makes them a cost-effective option for investors aiming for long-term growth. Their simplicity and efficiency contribute to their popularity among both novice and experienced investors.

What is an ETF?

An exchange traded fund (ETF) can be traded like a stock. The fund includes stocks, bonds, or other assets that represent the fund’s stated investment goal and investors can buy shares of the fund through common retail brokerages, including discount online brokerages.

The structure provides both liquidity (usually) and easy access because investors don’t need to buy through the mutual fund company or an intermediary, like a financial planner or a full-service broker. Investors should be aware, however, that thinly-traded or highly-specialized ETFs can be volatile and can have large spreads between bid and ask prices.

Many exchange traded funds are index funds in spirit because they track an index, such as the S&P 500, the NASDAQ, the Dow Jones Industrial Average, or a subset within the market.

Highly specialized ETFs are becoming much more common as well, including gold, energy, and even marijuana and cryptocurrency ETFs. If a market is new and hot, be on the lookout. An ETF is sure to follow, providing an easy way for investors to gain fast exposure to new tech trends or markets that are being moved based on legislative changes.

The ETF market has grown into thousands of exchange traded funds, some of which are simple index funds and others that have very specialized goals, such as tracking the volatility index (VIX), tracking treasury bills, or the mortgage market. As the ETF market continues to evolve, investors can expect an ETF for nearly any specialized market.

How Do ETFs work?

Exchange-Traded Funds (ETFs) are investment funds traded on stock exchanges. They allow investors to pool their money for buying various assets like stocks, bonds, or commodities. This provides access to different sectors or strategies without buying individual securities. A key feature of ETFs is their high liquidity. Investors can buy or sell shares during the trading day at market prices. This differs from traditional mutual funds, which are priced only at the end of the day. ETFs generally have lower expense ratios than mutual funds, making them cost-effective. They are also tax-efficient, which helps reduce capital gains taxes. By tracking different indices or sectors, ETFs make it easy to diversify portfolios while allowing open market trading. Overall, ETFs are a flexible and efficient investment choice.

Index Funds vs. ETFs: Key Similarities

The often similar goals for ETFs and index funds lead the two terms to be used interchangeably. The comparison is usually fair, with the two investment options sharing much in common.

Investing in a Diverse Basket of Assets

Investors aren’t investing directly in companies or individual stocks when purchasing index funds or ETFs. Instead, when buying an index fund or ETF, you are buying shares in the fund itself, while the fund buys shares of stock or other assets that help the fund realize its stated investment goal.

Tracking Market Indices for Investment

Individual stock purchases are bets for (or against) individual companies. Index funds and ETFs provide a broader investment, although still well-focused.

Mutual funds run the gamut from focused funds to actively managed funds that can include stocks in multiple sectors, as well as other assets, becoming so diversified that it’s difficult to understand what drives the value of the shares. Index funds and ETFs forgo the shotgun approach, instead choosing a more targeted investment goal with the simpler aspiration of tracking a part of the market or a type of asset.

Index Funds vs. ETFs: Key Differences

While index funds and ETFs have similarities and often serve the same investment goal (again, tracking an index) there are some notable differences between the two options. Most significantly, the way in which index funds and ETFs are purchased differs and each has a unique cost structure, which can affect investment returns in the short- or long-term.

Different Purchasing Methods

Index funds are purchased through a mutual fund company, or a broker or financial planner. It’s worth noting that many online brokers do provide access to mutual funds through a number of mutual fund companies.

ETFs are more readily available because they are traded on stock exchanges, providing easy access to anyone with a brokerage account. Similarly, exiting a position on an ETF is just as easy. ETF shares are sold into the open market on an exchange.

Because the money is returned to a brokerage account, investors are free to move the settled funds into any other equity, ETF, or mutual fund available through their broker.

Different Internal Expense Structures

Index funds must rebalance daily, which creates transaction expenses and adds costs due to the bid/ask spreads on the securities bought or sold in rebalancing.

ETFs can sidestep this expense in most cases by using a creation/redemption process to increase or decrease the number of shares in response to demand. Both ETFs and index funds have management fees and transaction fees that should be compared when choosing between an ETF and an index fund that track the same index.

Index funds and ETFs have different pricing mechanisms, with the price for index funds set once per day and ETFs changing price throughout the day using a creation/redemption mechanism to help match ETF share pricing to the Net Asset Value (NAV) of the fund’s shares. For long-term investors, this intraday pricing difference between index funds and ETFs won’t significantly affect investment performance unless there’s a big market move on the day the shares in the fund are sold.

Dividends are handled differently between ETF and index funds as well. An index fund invests dividends as they are distributed by the equities within the fund. ETFs, with their trust structure, wait until the end of the quarter to invest dividends, possibly affecting gains.

Trading Strategies

ETFs are traded like stocks on a stock exchange and their prices can change throughout the trading day. Therefore, the price at which you purchase an ETF may vary from the prices paid by other investors.

Mutual funds are typically purchased directly from investment companies rather than from other investors on an exchange. Orders are executed once per day, ensuring that all investors who invest on the same day receive the same price.

Index Funds vs. ETFs: Liquidity

Liquidity matters when comparing index funds and ETFs. Index funds allow easy share redemption with the Asset Management Company (AMC) at any time. ETFs trade on stock exchanges. Their liquidity relies on market buyers and can change with market conditions. During market volatility or low trading volumes, ETFs may face liquidity risks. This can result in larger bid-ask spreads and difficulties in trading at desired prices. Market makers support ETF liquidity, but their role can diminish in uncertain times. High trading volumes can decrease liquidity risks for ETFs. Many trades indicate strong interest, which helps investors buy and sell more easily. Therefore, investors should watch trading volume when considering ETFs. In contrast, index funds provide more consistent liquidity and stable redemption.

Index Funds vs. ETFs: Price

ETFs and index funds differ in several ways. ETFs trade throughout the day at market prices. These prices can be different from their net asset value (NAV), creating a bid-ask spread. This spread can add costs when buying or selling shares. In contrast, index funds are traded based on their NAV at the end of the day. This means investors know the exact price for transactions, avoiding spread costs. Investors often prefer ETFs for their liquidity and ability to trade anytime. Index funds are typically chosen by long-term investors who want a straightforward process without daily price changes. It’s also essential to consider commission fees. Some brokers offer commission-free ETFs, while index funds may have higher expense ratios. Ultimately, your choice depends on your investment strategy, need for liquidity, and costs.

Index Funds vs. ETFs: Where are Your Investments Going?

Index funds and ETFs create an easy way to gain exposure to a sector of the market, to invest in an emerging technology, or to invest in foreign markets, with other investment areas seemingly only limited by the imagination of fund companies.

Staying with broad index funds or ETFs, such as those that track the S&P 500, historically provides better returns than most actively managed mutual funds or investing in individual stocks. Index investing that uses broad indexes, much like dollar cost averaging, allows the market to work its long-term-trend magic without trying to guess its next move.

More narrowly-focused index funds and ETFs can be a grand slam or a strikeout — or something in between — similar to trading individual stocks. Assuming similar fees, an index fund can provide more efficient gains over time because dividends are reinvested immediately. ETFs, however, allow traders or investors to be more nimble.

Trades are settled at the ETF share price at the time of the trade. Index fund trades settle at the end-of-day sale price. Which to choose is a question of fees and whether you want to remain nimble or are a buy-and-hold investor.

Index Funds and ETFs, Which is Better?

Index funds and ETFs are designed to mirror the performance of a specific index, but they have key differences in trading flexibility, tax efficiency, and expense ratios, which affect their appropriateness for different investors.

Index funds are ideal for long-term, passive investors who prefer a “buy and hold” approach. These funds are typically acquired directly from the fund company, allowing investors to buy or sell only at the end of the trading day, which may not be suitable for those who trade frequently.

ETFs provide more trading flexibility because they can be bought or sold at any time during the trading day on an exchange. This feature makes them attractive to active traders looking to take advantage of market fluctuations.

ETFs are often more tax-efficient because of their structure that allows for in-kind redemptions, which can help minimize capital gains distributions. Moreover, ETFs usually have lower expense ratios compared to index funds, making them more attractive.

The decision between index funds and ETFs should reflect an investor’s objectives, whether they are focused on active trading or a long-term investment strategy.

Frequently Asked Questions

The post Index Funds vs. ETFs by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Modern investing offers lots of options, providing a ready-made solution to nearly every investment quandary. It’s almost enough to make you nostalgic for the days when you just invested in a stock. Almost.

These investing options still exist, and exchange-traded funds (ETFs) provide a way to build a position in a sector while still buying individual stocks.

What is an ETF?

An ETF is an investment fund that trades on a stock exchange along with stocks for individual companies. ETFs are flexible investment vehicles that purchase various types of assets to meet their investment goals.

They can track an index like the S&P 500, track a sector, represent a commodity (like gold, oil, or wheat) or sample a basket of stocks or bonds that meet a given criteria. ETFs exist for nearly any investment strategy you can imagine, and if someone thinks of something new that can have value, an ETF is sure to follow. The SEC’s guide on trading ETFs and mutual funds is especially useful if you’d like to know more.

ETFs are often similar to index funds, focused mutual funds that track an index.

ETFs have key differences from index funds, primarily the way in which they trade, their fees and the way dividends are distributed. ETFs that hold dividend-producing securities distribute their dividends on a quarterly basis. ETFs hold the underlying assets, usually stocks, and investors buy shares of the fund, much like mutual funds — but ETFs are easier to trade because they can be traded through an online broker and don’t require a full-service broker or buying directly from the mutual fund company.

Why Should You Invest in ETFs?

Investing in ETFs (Exchange-Traded Funds) has many advantages. One key benefit is diversification. ETFs contain a mix of securities that spread risk across different assets. This can help reduce potential losses. They also have lower costs. Typically, their fees are less than those of actively managed funds. This makes them more affordable for investors. ETFs offer trading flexibility. Investors can buy and sell shares throughout the trading day, just like stocks. This allows quick reactions to market changes. Moreover, ETFs are tax-efficient. They generate fewer capital gains compared to mutual funds, which can boost returns when reinvested. Finally, investing in ETFs is simple. Online brokers make portfolio management easy. Overall, ETFs combine diversification, cost savings, tax efficiency, and flexibility, making them a smart investment choice.

Considerations Before Investing in ETFs

Before investing in Exchange-Traded Funds (ETFs), consider a few important factors. First, look at expense ratios. Lower costs can improve returns since high fees reduce profits. Second, diversification matters. ETFs offer exposure to various assets, lowering the risk of individual stocks and leading to more stable returns. Third, assess market volatility. While ETFs can reduce some market swings, they are still affected by overall market trends. Understanding these factors is key for managing risk. By focusing on expense ratios, diversification, and market volatility, you can make better decisions in ETF investing.

What is a Stock?

Companies are owned by someone; either by one person, family, another company, many people or organizations. The company ownership is divided into shares, pieces of the company known as stock. When you own stock, you own shares, a claim on the company’s earnings and assets but not the corporation itself.

This structure is good for investors and companies because it keeps investors legally separate from the company, preventing either party from liquidating the other party’s assets to remain solvent or for any other reason. With a publicly held company, shares are traded on exchanges, allowing investors to easily enter or exit positions or to build a long-term position with a single stock or a portfolio of stocks.

Check out the U.S. Securities and Exchange Commission (SEC’s) guide on stock trading basics if you’d like to know more. Stocks are shares issued to raise capital to fund business operations, money in exchange for a claim on future earnings. They can also serve as an exit strategy for early investors in publicly traded companies, company founders, management and others in the company who have stock or stock options. Selling these shares in the stock market is a way to recoup investment and lock in returns.

Why Should You Invest in Stocks?

Investing in stocks can be rewarding. It offers potential returns that may surpass those of many investment options. Additionally, there are tax advantages for long-term capital gains. Stocks can also provide a steady income through dividends. Dividends reflect a company’s financial stability. However, stock investing carries risks. Market volatility can affect stock prices. Investors need to analyze company performance and industry trends. To succeed, they must stay diligent and understand market dynamics. Diversifying across sectors can help reduce risks. Staying informed about economic indicators allows for timely decisions. Balancing opportunities and risks is crucial for long-term investment success.

Considerations Before Investing in Stocks

Before investing in stocks, it’s important to consider several factors. Market volatility can greatly impact stock prices. This can lead to unpredictable changes in your portfolio’s value. Investors should be aware of the potential for losses from poor choices. Understanding the market and individual companies is essential. Conducting thorough analyses of potential stocks helps identify good investment opportunities. However, this requires significant time and effort. You need to evaluate financial health, market position, and growth potential. Stocks can offer high returns and dividends. But investing heavily in a few companies increases risk. Therefore, diversifying across sectors and asset classes is crucial. Ultimately, weigh the potential rewards against the risks before investing in stocks. Be prepared for market volatility and the demands of thorough analysis.

ETF vs. Stock: Similarities

When evaluating investment options, both Exchange-Traded Funds (ETFs) and individual stocks offer unique benefits. They differ in structure and purpose but have similarities that attract all kinds of investors. Understanding these similarities can help investors make informed choices. This discussion will focus on key aspects like liquidity, trading flexibility, diversification potential, and market accessibility. Recognizing these common features will help investors improve their strategies and optimize their portfolios.

Stocks and ETFs Trade on Major Exchanges

When people think of investing, they tend to think of stocks or mutual funds. ETFs provide some of the benefits of mutual funds, including diversification, but are traded on a stock exchange like the New York Stock Exchange (NYSE) or NASDAQ alongside stocks.

This quality makes ETFs widely available and provides a way for traders or investors to exit positions quickly, like with stocks. Also like stocks, thinly-traded shares may require some planning and patience if you want to buy or sell because there can be a large spread between bid and ask prices. This isn’t an issue with actively traded stocks and ETF shares.

Stocks and ETFs Settle at the Same Price

Stocks and ETFs settle at the price at the time of the purchase or sale. Experienced investors know the market price of an equity can change by the second, the minute or the hour — especially if there is news moving the price. Owners of mutual fund shares are along for the ride, whether up or down, because the price of the trade settles at the end of the trading day after the fund rebalances. Stock and ETF trades settle at the executed trade price, which may be higher or lower than the end-of-day price but which won’t be a surprise.

ETF vs. Stock: Key Differences

When investing in financial markets, two common options are exchange-traded funds (ETFs) and individual stocks. Each has its own advantages and characteristics. ETFs provide instant diversification by grouping various securities. Stocks represent ownership in one company, offering a more focused investment. Knowing the differences between ETFs and stocks helps investors make better decisions based on their goals, risk tolerance, and market outlook. Whether aiming for broad exposure or wanting to invest in a single company’s growth, it is important to align these investment types with one’s strategy for a successful portfolio.

The Number of Shares Changes

Stocks have a fixed number of shares. Stock buybacks, stock splits and secondary offerings change the number of shares for a stock — but these events don’t happen all day, every day. ETFs, by comparison, create and redeem shares as needed to more closely match the share price to the net asset value (NAV), a measure of the fund’s total assets minus its liabilities relative to the number of shares outstanding.

This creation/redemption mechanism adjusts the number of shares in the ETF and helps the ETF more effectively track the performance of the index or asset class it attempts to mimic.

ETFs Can Be Focused or Diversified

Individual stocks are a direct bet on a company’s future earnings, or more accurately, its stock price. The two don’t move in tandem. ETFs, however, can be either focused, holding only a few securities or assets, or diversified, representing a large index, like the S&P 500, which features companies in every major sector. More focused ETFs can have similar performance to individual stocks because they have a limited core of holdings.

This strategy can prove to be great news or bad news — or somewhere in between — but it does provide investors with a way to trade on investment strategies that would be difficult to duplicate with a few individual stocks.

ETF vs. Stock: Which Should You Buy?

Investing in ETFs (Exchange-Traded Funds) and individual stocks has its own pros and cons. ETFs offer diversification by spreading investments across various securities, which can help lower risks and decrease portfolio volatility. This can make them appealing to investors who are cautious and prefer consistent returns over time.

Individual stocks can offer higher returns if the company does well, but they also carry more risk—investors may face considerable losses if a company doesn’t perform as expected or if market conditions change negatively.

Conservative investors who prioritize stability and minimizing risk may find ETFs more advantageous, as they provide extensive market exposure with less volatility. On the other hand, growth-focused investors who are open to taking on more risk might opt for individual stocks in order to take advantage of promising companies or sectors with potential for significant growth.

The decision to choose between ETFs and individual stocks should reflect an investor’s risk tolerance and investment objectives, finding a balance between the need for diversification and the potential for high returns.

Frequently Asked Questions

The post ETF vs. Stock by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Paying off your mortgage vs investing depends on your earning expectations and current mortgage term. 

Should I pay off my mortgage? It’s a question many homeowners ask, and it’s easier to get an answer for your scenario than you might think. Others are wondering, Should I pay off my mortgage or invest?

This question, invest or pay off a mortgage is a hot topic – and with good reason. That’s why Benzinga has compiled this article for you. So, is it smarter to invest or pay off a mortgage?

Tackle this dilemma with a look at both sides in our guide.

Should You Pay Off Your Mortgage or Invest?

• There’s no clear winner – this depends on earning expectations and your mortgage terms.
• You may want to pay off your mortgage early if you want to free up more cash. Paying off the principal feels great!
• You want to invest if you believe in the power of index investing and are okay with taking on the risk. 

Paying Off Your Mortgage

In answer to the question, Should I pay off my mortgage early, you should consider the total interest percentage. When you buy a house (after October 2015), somewhere in the pile of papers you sign at closing, there’s a total interest percentage (TIP). It spells out how much you pay in interest relative to the loan amount (Earlier mortgages had a “finance charge” in loan documents.)

At 5% APR, the TIP for a $200,000 loan is over 90%. This means an extra $180,000 will be paid in loan costs over the 30-year term of the loan.

Assuming you don’t have $200,000 in cash to pay off the mortgage, you might be considering extra payments. We can work with a conservative $100 per month as an extra payment, about $3 per day. Over a 30-year loan, the extra $100 per month will trim 5 years off the loan and save $37,000 in interest.

Here’s the real question: Can you make more than $37,000 in 30 years by investing $100 per month? Historically speaking, yes. That’s a great point to consider when wondering, Is it better to pay off a mortgage or invest.

Investing Instead

Know someone who bought Google, Microsoft or Apple in the early days? Or someone who saw his retirement savings cut dramatically in 2009? Investing can be equally risky as it is rewarding. 

A safe investing route can be to follow a diversified index and is a factor when asking, Invest or pay off a mortgage.

Index investing isn’t exactly new. The concept (and the 1st index mutual fund) dates back to the early 1970s when Vanguard introduced a fund that closely tracked the S&P 500.

Today there are many alternatives that can also track the S&P 500 (like the best S&P 500 ETFs and S&P 500 index funds). A popular investment option is SPY, a low-expense exchange-traded fund. 

You can easily track historical S&P performance to better understand what’s likely to happen in the long term. Individual stocks or more focused indexes may not have as much history or provide as much diversification in a single ETF or mutual fund. Historically, the S&P has delivered about a 10% return, including a 7% real return and 3% from inflation.

The rate of return depends on the time frame. For example, the S&P dipped in 1928, 1930, 1954 and once again in 1982. Later years show the S&P’s dramatic rise with several dips or crashes along the way. 

Even in the decades when the S&P was essentially flat, reinvested dividends from the index made the investment worthwhile, helping to multiply the growth when the market began to grow rapidly. 

It’s impossible to know what will happen with the S&P index or any other investment over a 30-year time frame, but history tells us we can probably earn a 10% average annual return if we hold the investment and don’t sell at the first sign of trouble.

Using history as a guide, investing $100 per month in the S&P would net a nest egg of nearly $165,000 if you had started investing in May of 1988 and continued through May of 2018, the length of a 30-year mortgage.

According to census data, the average home price in May of 1988 was $133,500. To be fair, interest rates were higher 30 years ago as well, topping 10% as an average for a 30-year fixed-rate mortgage.

Factors to Consider When

When faced with the decision of whether to pay off your mortgage or invest, it is important to carefully consider the following questions:

• Is my emergency savings amount enough? – It is generally recommended by financial experts that individuals should strive to set aside an emergency fund equal to three to six months’ worth of living expenses. The amount you choose to save will be influenced by factors such as your risk tolerance, ability to save, and current financial commitments.

• Am I saving an adequate amount for my retirement? – Experts have differing opinions on the ideal amount to have saved for retirement at various points in one’s career. It is important to consider your future withdrawal strategy in order to determine the appropriate level of savings to accumulate at present.

• What is the total amount of my other debts? – It is essential to conduct a comprehensive evaluation of your financial situation in order to determine the most effective debt payoff strategy. Prioritizing which debts to pay off first can ultimately lead to interest savings, increased investment opportunities, and improved overall financial responsibility.

• What opportunities do I have to Increase my earnings? – Increasing income is an important factor to consider when deciding between investing or paying down your mortgage. Ways to increase income include requesting a raise at work, engaging in a side hustle, and investing in oneself. Ultimately, the decision depends on individual financial goals and circumstances.

• Is your mortgage rate higher than expected portfolio returns? – It is important to regularly review and analyze your investment portfolio’s performance, evaluating both short-term and long-term return rates. A reliable benchmark for comparison in this scenario is the S&P 500 index, known for its historical average annual returns of 10 percent. If your investment returns surpass the national average mortgage interest rate, it may be wise to maintain your current mortgage and focus on maximizing your investment opportunities.

Advantages of Paying Off Your Mortgage

If you’re nearing retirement age or if you expect a change in your household income, it can make sense to pay off the mortgage to free up more cash each month. This approach will work whether you have a conventional mortgage or 1 that’s government-backed.

It’s also 1 less thing to worry about. Retirees, in particular, are likely to enjoy the freedom of not having a monthly mortgage payment and not needing to work part-time to make mortgage payments. 

The money saved by not paying mortgage interest diminishes later in the loan. The payment toward interest in the last 10 years of the loan becomes just over half what it was at the start of the loan.

In the last few years of a mortgage, nearly all of your mortgage payment goes towards the principal. Paying off a mortgage late in the term does more for peace of mind than it does for financial gain through not paying interest.

Disadvantages of Paying Off Your Mortgage

A guaranteed return is paying down debt. The gains are particularly strong when the debt is high-interest and not tax-advantaged.

If you have credit card debt at 15% interest, it’s unlikely that you can expect that kind of return from investments. Paying off the debt is the best move — and it’s paid with after-tax money, which makes it equivalent to a taxable investment that returns well above 15%.

The return on investment from paying down mortgage debt becomes less evident. Mortgage interest rates haven’t been at 15% for a long time. Rates hover at about 5%, so it’s difficult to imagine that you can’t earn a higher return by investing instead.

That’s especially true if you find the best cash-out finance lenders.

Additionally, by paying off your mortgage early, you lose the mortgage interest tax deduction, which for most households serves to effectively lower the cost of mortgage interest. Depending on your tax bracket, the mortgage interest deduction might lower a 5% mortgage rate to about 3.5% with the best lenders to refinance a mortgage.  

Paying off your mortgage can also reduce your liquidity by putting more of your money into an illiquid asset.

Advantages of Investing

The primary advantage of investing instead of paying off your mortgage is that you’re building a liquid asset that has the potential to put you in a better financial position than if you simply eliminated your mortgage interest expense.

There aren’t any guarantees that your money will grow, but there is historical data that suggests your chances of earning more through index investing are very good, assuming an extended time frame. 

Short-term investments often do not allow enough time for the market to recover from dips or downturns. Using data from a 30-year history of the S&P 500, investing $100 per month can create an investment portfolio worth over $160,000 over 30 years.

Disadvantages of Investing

An honest look at the performance charts for the S&P 500 shows spans, sometimes decades-long, where little or no return was realized by investors. In some cases, investments are still upside down after 10 years or more.

There aren’t any guarantees of a return on investment — with the exception of paying down debt, which always creates a return on investment.

Whether that return on investment from paying down debt is small or large depends on the interest rate and whether the interest is tax-deductible, like in the case of mortgage interest.

Best Online Financial Planners

A financial planner can help you make decisions with a long-term scope. It’s never too early to get started. Review our picks for the best online financial planners to find a firm now.

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SmartAsset’s SmartAdvisor Match tool is an online resource for consumers looking for a financial adviser. All you have to do is complete a survey regarding your age, income, investments and future goals. Once completed, you’ll be matched with up to 3 financial advisors based on geography, investable assets, and willingness to work with a remote advisor. In addition, SmartAsset reaches approximately 75 million people each month (as of September 2021) through its editorial content paired with its interactive calculator tools to help people navigate life’s big personal finance decisions. 

Best For

• Consumers seeking actionable advice from a financial advisor
• Working adults ages 45 and older with household income more than $100,000
• Curious, savvy consumers looking for higher financial literacy
• People who want to feel more confident about their financial future

Pros

• The ability for an individual investor to be paired with a financial advisor based onbased on geography, investable assets, and willingness to work with a remote advisor
• A quick 10-minute questionnaire lets you be paired with up to 3 financial advisors

Cons

• No mobile app
• Little to no information on cryptocurrency, alternative investments or decentralized finance (DeFi)

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Money Pickle was founded in 2021 by three Michigan State graduates who wanted to make financial education more accessible and convenient for everyone. The company is registered with the Securities and Exchange Commission (SEC) as an investment adviser, and its CEO is Brenton Thurman. The only advice Money Pickle directly provides is guidance on selecting an investment adviser. 

Essentially, Money Pickle is a referral service for its network of 3rd-party financial advisors. Each advisor are pre-screened to align with specific qualifications. Advisors are expected to follow a code of conduct that emphasizes high ethical standards. Money Pickle-referred professionals are matched to you based on your unique situation, to help you navigate your most pressing financial needs, including retirement planning, investment strategies, estate planning, tax planning, debt management, insurance, wealth preservation and risk management.

The platform matches users with financial advisors most suitable for their needs and goals utilizing a matchmaking algorithm. Users can conveniently choose the meeting time and receive a video chat link  for their scheduled appointment. During the appointment, users are encouraged to ask questions or express concerns, receiving personalized professional guidance regarding their unique financial situation without pressure or obligation to purchase products or services.

Best For

• People seeking a convenient way to meet with a financial advisor
• People who want unbiased and ethical advice from a fiduciary
• People trying financial advisors for the first time without paying hefty fees

Pros

• Easy to use and access from any device
• No subscription or membership fees required
• No minimum account balance or income level needed
• Wide range of topics covered, from investing to retirement planning
• Financial advisors who meet strict criteria and standards

Cons

• Lack of visibility into the cost of ongoing financial advisor services
• Financial advisor pool may be limited

Frequently Asked Questions

The post Should I Pay Off My Mortgage or Invest? by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Did you know that you can invest in the best municipal bonds with Interactive Brokers?

If you think bonds are just for aristocrats or to protect your nest egg, take a closer look. Municipal bonds can pay a great rate – often much higher than treasury bonds – and many are guaranteed by the state, which reduces risk.

Quick Look at the Best Municipal Bonds:

• Nuveen High Yield Municipal Bond Fund 
• Texas Bonds
• Washington Bonds
• New York Bonds
• Florida Bonds
• Georgia Bonds

Best Municipal Bonds

Here’s a list of our picks for the best municipal bonds for this year.

Best High-Yield Municipal Bond Fund: Nuveen High Yield Municipal Bond Fund

For the risk takers out there, high-yield municipal bond funds can offer a greater return than other options.

The tradeoff is risk. High-yield funds usually invest at least 50% of their assets in bonds or derivatives that either aren’t rated or are rated BBB – and sometimes lower. With a 7.85% average return for the past year and a 5-star Morningstar rating, the Nuveen High Yield Municipal Bond Fund is a strong performer, especially when you consider its tax-free earnings.

High-yield funds have their risks, resulting in volatility in returns from year to year, but Nuveen’s high yield muni fund is a solid pick to help boost earnings in a diversified portfolio. The fund places its focus on non-investment-grade or unrated municipal bonds and targets opportunities resulting from bond market inefficiencies.

Best States for Bonds

The following states offer excellent opportunities for investing in municipal bonds.

Texas

Texas isn’t just for sunshine and armadillos, it’s also a great place to buy muni bonds. Texas residents don’t pay a state income tax, so there’s no (extra) tax advantage at the state level for Texas bond investors, but the state has a AAA rating and a booming economy to help fill state coffers with sales tax revenue.

Yields for Texas General Obligation (GO) bonds are strong right now, often higher than the AAA-index, providing a prudent bond investment choice with an impressive return. Many municipalities within Texas are also highly rated with attractive yields for low-risk investments.

Bond investors should have no trouble finding muni bonds in Texas with ratings of BBB and higher and with coupon rates as high as 5% or more.

Washington

With its AA+ rating, Washington State is a safe bet for bond buyers. The state has reserves put aside for the proverbial rainy day, of which it has many, helping assure investors that its financial obligations will be met.

We found a number of bonds for the state and for municipalities and projects within Washington that merit a closer look. Coupon rates ranged as high as nearly 10%.

However, investors should invest time in learning more about each bond, particularly if the bond is revenue-based, which makes payments from revenue generated from the project.

New York

The Empire State just might be the perfect place to start building your bond investment empire. New York has a hard-won AA+ rating, proving the state places priority on its credit commitments.

New York is also in a strong position with reserves to help navigate a downturn. Coupon rates ranging up to nearly 13% are available for New York municipal bonds, but higher coupon rates are usually associated with municipalities or projects and may present more risk than bonds for the state itself or for lower-risk municipalities within New York.

Bonds for some projects may also be taxable due to changes in tax law, so careful screening is required for bond investors.

Florida

Similar to Texas, Florida doesn’t have a state income tax, meaning bond investors from the Sunshine State won’t see an extra tax savings for buying Florida muni bonds.

Bonds for Florida state and many of its municipalities and projects aren’t likely to sunburn investors.

Florida is AAA rated, and the state’s economy continues to grow faster than other parts of the nation, with a projected $1 trillion dollar Florida economy projected for 2018. Attractive coupon rates are available for a number of projects and municipalities, with coupon rates of 5% for bonds such as Florida DOT.

Georgia

The Peach State can be a peach for bond investors as well. Georgia’s AAA rating puts the state in the lowest risk category.

Growth in construction is helping fuel Georgia’s economy, but growth is also strong in medical fields and tech fields, leading to the highest employment rates in nearly 20 years.

Muni bonds available for Georgia range from long-term bonds for projects with a high coupon rate to state-issued bonds, which make a secure investment with an attractive yield.

Georgia, as another state with a strong reserve should be in a good position to weather a recession without missing a beat.

What is a Municipal Bond?

Municipal bonds are debt instruments issued by states or municipalities that allow them to borrow money for a specific purpose.

The funds raised by a bond sale might be used to build roads or improve infrastructure, build schools or to support beneficial community projects like hospitals or health centers.

Municipal bond defaults are possible but extremely rare. A bond default occurs when the bond issuer fails to make a payment toward interest or principal within a specified period.

U.S. Treasury bonds are generally regarded to be the safest type of bond investment but generally don’t provide the same rate of return as municipal bonds and don’t have the same tax advantages found with municipal bonds. 

Check out our guide on how to buy municipal bonds.

Municipal Bond Advantages

Investing in municipal bonds bring several advantages. It even has some advantages over other types of bonds. Let’s take a look at the advantages of municipal bonds.

Attractive Yields

If you follow U.S. Treasury market yields, you know that yields don’t change much on a day-to-day basis and are generally on par with the dividend yield of the S&P 500.

• U.S. Treasuries range from under 2% up to just under 3%. A higher yield is only available for 30-year notes. Municipal bonds generally offer a more attractive yield.
• The highest-rated bonds, AA or AAA, can be higher than the 30-year treasury note, but with a shorter time to maturity.
• Municipal bond yields are typically higher when the bond rating is lower or the duration is longer.
• A lower bond rating can represent a potential for risk and longer-term bonds can have opportunity costs because interest rates can change over time, possibly making the bond less attractive as an investment.

Step down one rating to BBB rated bonds (which are still considered to be investment grade bonds). You’ll find higher yields with a slightly higher chance of default, typically around 1% after 10 years.

Dropping below a BBB rating for bonds can be a risky proposition, as you end up with default rates high enough to threaten the bond yield

It’s important to note that a bond’s yield is really a yield to maturity. When bonds are resold, the selling market often prices in changes in interest rates and other factors, causing a divergence between the yield and the coupon rate.

Tax-Free Returns

Sometimes the IRS can be friendly to investors, particularly in the case of municipal bonds, which are exempt from federal income tax. If you buy bonds issued in your home state, you can expect the interest you earn to be exempt from state taxes as well.

If you’re in a higher tax bracket or if you plan to be at some point, municipal bonds can be a great addition to your portfolio because the yield isn’t taxable, making it equivalent to a higher yield in taxable investments, such as the yields of corporate bonds, treasury notes, interest from CDs or stock dividends.

Secured by Tax Authority

Many municipal bonds are structured general-obligation bonds, which means they’re supported by the full taxing authority of the issuer.

States or municipalities can raise taxes as needed to meet their financial obligations including bond payments. Revenue bonds are another type of municipal bond – but rather than being paid through general revenues generated by states or municipalities, revenue bonds are paid off through the revenue from specific projects for which the bonds are issued, such as a toll bridge.

Municipal Bond Disadvantages

Municipal bonds also bring some disadvantages. Here are a few that stand out.

Volatility

Prices for bonds can be just as volatile as prices for equities due to changes in risk or changes in interest rates. A bond purchased during a low interest rate environment may see its value adversely affected if interest rates go up because better earning opportunities are available in a higher interest environment. Meaning that interest payments could change without warning.

If your goal for investing in municipal bonds is a buy-and-hold strategy, volatility shouldn’t be a concern because you’ll be holding the bond until maturity. Once it’s mature, you’ll be paid the full principal of the savings bond. Bond prices are fixed when you purchase them, but the interest payments can shift.

Possible Bankruptcy

Municipalities don’t often go out of business, but they can find themselves in financially challenging situations that can prevent the state or municipality from making required payments on the interest or principal for issued government bonds.

In 2014, a federal judge approved a bankruptcy plan for Detroit which left some bondholders holding bonds of questionable worth. In 2016, Puerto Rico defaulted on $58 million in debt, and since the recent hurricane impacted Puerto Rico, the future of its bond payments remains uncertain.

Limited Redemption Options

Remember, too, that you can only redeem these bonds electronically through TreasuryDirect. While this is not a disadvantage, there’s not as much flexibility as you might imagine. However, your investor advisor or issuer can often redeem for you.

What to Look for in Municipal Bonds

These are theactors to consider when choosing municipal bonds.

BBB Rating or Higher

Default rates for bonds rated BBB are slightly over 1%, with bonds rated A, AA or AAA, boasting a default rate well below 1%.

Higher risk bonds, even as part of a diversified portfolio, can destroy the overall bond portfolio yield if any of the bonds default. Moody and S&P use a slightly different convention for the rating, but both lead the rating name with letters A, B, C, etc. 

Taxable Equivalent Yield

Compare yields for municipal bonds to their taxable equivalents for bonds with similar ratings. In many cases, you’ll find that the taxable equivalent yield of municipal bonds will make munis a more attractive choice.

General Obligation Bonds

They are effectively secured by the taxing authority of the issuer. This means that the state or municipality can raise taxes to meet its financial obligations, including bond payments.

What to Carefully Watch

There are certain signals that you should consider before deciding whether municipal bonds are worth investing in.

Bonds Rated Lower Than BBB

The default rate for municipal bonds begins to skyrocket for bonds rated BB or lower, with bonds rated C or lower sometimes having staggeringly high default rates.

Yields Too Good (or bad) to be True

If the yield from a municipal bond seems too good to be true, check the bond rating from Moody or S&P. High yields and lower bond ratings can go hand-in-hand.

Also, check the coupon amount. Bonds that are traded after issuance can have posted yields that don’t make quite as much sense as the coupon rate. A higher yield can be a more profitable bond investment – but only if the state or municipality doesn’t default on its debt obligations.

Revenue Bonds

These pay bondholders from revenue generated from the project for which the bond was issued. This isn’t necessarily a bad thing, but it can create additional risk.

State and local governments might be good at governing (or not) but that’s not a guarantee that any revenue-based ventures will be successful, potentially creating a risk that bond obligations won’t be paid.

Best Brokers for Municipal Bonds

Online brokers make it easy to invest in municipal bonds. Take a look at our top picks for the best online brokerages.

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Most Available Bonds

get started Securely through Interactive Brokers’ website

Interactive Brokers

IBKR has no mark-ups or built in spreads and low and fully transparent commissions on bonds

• Treasury bills, notes and bonds: 0.2 bps for the first USD 1 million
  of face value, plus 0.01 bps for face value above USD 1 million
• Corporate bonds: 10 bps for the first USD 10,000 of face value,
  plus 2.5 bps for face value above USD 10,000
• Municipal bonds: 5 bps for the first USD 10,000 of face value,
  plus 1.25 bps for face value above USD 10,000

Alternatives to Bond Funds

As a municipal bond investor, there are several ways in which you can invest in the debt security market. Yes, a fixed income security may sound enticing, but what if you’re not convinced? You can use these investment options:

• Purchase bonds individually,
• Invest through a bond fund managed by a mutual fund company,
• Purchase municipal bond ETFs or
• Invest in unit investment trusts.

Municipal Bond ETFs

Exchange traded funds (ETFs) are similar to mutual funds but are openly traded on an exchange. There’s no need to establish an account with a mutual fund company because ETFs trade just like stocks and are accessible from any trading account.

Like bond mutual funds, bond ETFs can be passively managed, tracking a bond index, or can be actively managed by a fund manager or team.

Take a look at Benzinga’s picks for the best bond ETFs.

Unit Investment Trusts

A unit investment trust is structured similarly to a mutual fund. The trust is an investment firm or company that bundles similar assets into units, which are then sold to investors. This may sound a lot like shares of mutual funds – and it is.

Unit investment trusts can be used with stocks or with bonds, or even bond derivatives, and can specialize in certain types of bonds, such as municipal bonds. With a unit investment trust structure, you don’t own the bonds directly. The trust owns the bonds and you own units within the trust. The largest distinction between unit investment trusts and mutual funds is that the bonds held by a unit investment trust are held until maturity.

Bond funds managed by mutual fund companies typically trade in and out of bond investments according to the stated objectives of the bond fund. Unit investment trusts are best for the buy-and-hold investor because maturity dates can range up to 30 years from purchase date.

Best Municipal Bonds Methodology

Here’s the bad news – but it’s not all bad. The best municipal bonds are usually sold quickly to brokers, funds, banks or institutional investors. This leaves the retail investor grasping at empty space where the bonds once were or digging around for odd lots.

Nevertheless, we used the following information to choose the best of the best:

• Ratings
• Risk
• Yields

We also took reserves into consideration, which can provide insight into how well a state can navigate the next recession. States with some extra money in the bank may be more likely to meet their debt obligations without missing a beat.

Invest in Municipal Bonds Now

Not every bond is a great buy. Many of the bonds with the highest yields offer such high returns because the risk is greater. From issue price to interest payments, you can turn to paper savings bonds, a range of municipal securities and much more.

Consider bonds as a part of a well-diversified portfolio. Start with Benzinga’s recommendations to find the best bonds and online broker today. You can also research the market values of these assets, the Treasury yield curve and much more.

Want to learn more about investing? Check out Benzinga’s guides to the best online brokerages, how to trade stocks for free and how to buy corporate bonds.

Frequently Asked Questions

The post Best Municipal Bonds by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

Your credit score influences more than you might realize. From interest rates to the cost of insurance, your score is an invisible hand that can quietly chart a course for your life. It’s important to keep an eye on your credit activity with the best credit monitoring service that can alert you to changes in your score as well as provide early warnings of fraud.

You will find a lot of options when looking for the best credit monitoring service. Benzinga has done the research for you and offers you a list of options below.

The Best Credit Monitoring Services

• Best Overall: MyFico
• Best for Phishing Protection: Identity Guard
• Best for Credit Alers: Privacy Guard
• Best for Tiered Service Options: LifeLock
• Best for Reviewing Credit Scores: Credit Karma

Best Overall: MyFico

When you apply for an auto loan or a home loan, there’s a good chance that your lender uses MyFico to pull your credit report and scores. The good news is that you can have the same information that lenders use when you choose MyFico as your credit monitoring service.

MyFico offers three credit monitoring products ranging from $19.95 per month up to $39.95 per month. MyFico Premier is a good choice if you’re rebuilding your credit or working toward a loan goal. It provides monthly updates for your three credit bureau scores as well as individual credit scores such as mortgage and credit card scores. A total of 28 individual reports are available.

Identity theft monitoring is also included with Advanced and Premier plans and both plans offer up to $1 million of ID theft insurance. Fraud resolution is also included with premium plans and MyFico keeps a watchful eye on the dark web for you, alerting you to potential risks

Mobile apps are available for Android and iOS.

Best for Phishing Protection: Identity Guard

Identity Guard’s Value package pricing is hard to beat, at $8.99 per month for basic credit monitoring, including dark web monitoring and identity theft coverage for up to $1 million.

Consider Identity Guard’s Ultra plan, which offers the most comprehensive tools, for $23.99 per month. It gives you a suite of credit monitoring tools, phishing protection, monthly credit scores and reports from all three credit bureaus.

Identity Guard brings enhanced value, but if you need detailed individual reports for each type of credit, MyFico is a better choice.

As an affordable alternative for those who need basic credit monitoring and scores from all three credit bureaus, Identity Guard deserves consideration. The Ultra plan can cover the whole family for $33.33 per month and cancellation is a breeze if your credit monitoring needs to change after you’ve enrolled in a plan.

Access your account on the go with mobile apps for Android and iOS.

Best for Credit Alerts: Privacy Guard

Pricing starts at $9.99 per month with PrivacyGuard, another affordable choice if your credit monitoring needs are less complex but you still want data from all three bureaus.

Daily credit monitoring is available and scans all three credit bureaus for new inquiries, derogatory information, new accounts and other changes that can trigger an alert.

ID theft insurance is only available with PrivacyGuard’s Total Protection plan and the feature-limited ID protection plan, priced at $24.99 per month and $9.99 per month, respectively. The first 14 days are free.

Expect a more robust set of features with the Total Protection plan, including monthly credit reports and scores from all three bureaus, 24/7 credit monitoring and a credit score simulator feature.

PrivacyGuard’s mobile-friendly website gives you access to your account whether on your PC or using a mobile device.

Best for Tiered Service Options: LifeLock

Best For

Tiered Service Options

Overall Rating

get started securely through Norton LifeLock’s website

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Norton Lifelock helps individuals, families and businesses navigate an interconnected world by providing industry-leading cybersecurity solutions, including identity, credit and financial monitoring. Its services monitor sensitive information for changes that could indicate identity or financial theft, giving users more confidence in maintaining privacy. The company aims to protect its customers from the financial and emotional damage that can result from cyber crimes. 

Best For

• Consumers who regularly use the internet for shopping, banking or other activities
• Victims of online fraud or identity theft
• Individuals concerned about the increasing number of cyber threats
• Individuals looking for privacy protection (such as a password manager or VPN)
• Families that want to keep their personal information safe

Pros

• Personalized identity restoration specialist to help restore your identity
• Stolen funds reimbursement
• Timely alerts that protect against fraud and identity theft
• 24/7 customer service
• Tiered service options

Cons

• Prices may increase after the first year

LifeLock places its focus on identity theft protection and broadens its scope to include protection for other threats like ransomware and online scams. This identity theft protection service, however, goes far beyond simply looking out for your name as it will also help monitor your credit.

If your goal is security with built-in reimbursement coverage for personal funds, related personal expenses and legal or expert assistance, LifeLock is a solid choice. If you need detailed credit score reporting and credit score simulation, MyFico is a better alternative. However, if you need a fraud alert, LifeLock is perfect for your needs.

LifeLock offers three membership options which range from $8.99 per month for standard protection up to $23.99 per month for LifeLock Ultimate Plus with its Million Dollar Protection Package. Prices jump slightly higher after your first year with LifeLock. Remember, however, that this is not identity theft insurance, which is a completely different product.

Credit monitoring from all three bureaus is included with all LifeLock membership levels but monthly credit score tracking is only available with the Ultimate Plus membership and is limited to your VantageScore 3.0 credit score based on Equifax data. Even so, you can see your payment history, FICO score, full credit file and get an idea of your credit profile.

LifeLock uses proprietary software that’s installed directly on your PC or Mac. Mobile apps are also available for Android and iOS and provide protection for up to 5 devices.

Best for Reviewing Credit Scores: Credit Karma

For those with budget constraints, it’s tough to beat free. Credit Karma is candid about how it makes money and still offers free credit scores and free credit monitoring. If you take advantage of a finance offer suggested through the platform, Credit Karma earns a commission.

Credit monitoring is limited to your TransUnion credit report, which may be enough for consumers who just want a simple solution.

Credit scores are provided by both Equifax and TransUnion and are updated weekly, providing you with a more up-to-date snapshot of your credit than paid competitors.

Many of the detailed reports available with paid providers aren’t available with Credit Karma (remember, it’s free) but there are still a number of features that make the service attractive, including:

• Credit simulator
• TransUnion credit score
• Equifax credit score
• Details of factors that help or hurt your score
• Tools to track spending

Apps are available for Android and iOS.

What Credit Monitoring Services Do

Every place you use credit, make non-cash purchases or share certain types of personal information is a potential risk. No matter how careful you are with your data in your home and on your devices, the data and personally-identifying information in the hands of third parties are at risk, as seen in recent high-profile data breaches.

Credit monitoring services can provide you with an overview of your credit, give you detailed reporting and send alerts if your credit information has changed. New inquiries or requests for new credit in your name can appear, for example.

A credit monitoring service can show you your overall credit score from one or more credit bureaus but many services don’t offer access to the individual sub-scores specific to one type of credit. Across the three credit bureaus, there are nearly 30 types of individual scores. You have a credit card score, an auto loan score, mortgage score and more.

MyFico, the provider used by most lenders, shows 28 individual scores with its Advanced and Premier packages, whereas the company’s Basic package only provides 10 individual scores. Other providers may not offer these individual scores or may provide a more limited scope.

This is why you need to decide if a data breach or your credit score is more important. If you need more than credit monitoring companies can offer, you might want to subscribe to 2 different services.

Access to Credit Scores and Reports

There are three major credit bureaus for consumer credit reporting: Equifax, Experian and TransUnion. A credit monitoring service gives you access to your reports from these bureaus.

Some services provide all three and others only provide data from one or two. Ideally, access to all three is better because while the data from each is similar, each may contain unique credit items or items may appear on the reports at different times.

Detailed Reporting

Some credit reporting services provide more granular information and may even include additional credit scores specific to a certain type of credit.

This is very important because you can catch credit card fraud easily, find if someone has opened a bank account in your name and use credit protection to keep your score as high as possible. Identity thieves are much less likely to benefit from your name and info if you are using a credit reporting company, download their app and check with the credit reporting agencies often.

For example, before applying for a mortgage or a refinance, you might find that access to your mortgage credit score is useful. The level of detail and types of reports available can vary considerably from one service to the next, so you’ll want to consider your needs carefully before choosing a credit monitoring service.

Identity Theft Protection

It’s common to find identity theft protection bundled with credit monitoring services or sold as an add-on. The level of protection can range from simple alerts to insurance to cover your losses or even identity restoration services provided by identity theft experts.

These products can compare your credit behavior to what’s happening and send alerts just to make sure you know what’s going on. Plus, they do this with every credit reporting agency so that you can see if one report is changing and the others are not.

Alerts to Changes in Your Credit

Not every change to your credit report indicates fraud. It’s often useful to know about small changes to your score or new inquiries, especially if you’re working on building your score prior to a home or auto purchase.

Dark Web Scan Alerts

Some credit monitoring packages scan the dark web to see if your identity or personal information have been compromised and are being traded or sold. These alerts allow you to take action before your identity is used to open new credit accounts or your existing credit accounts are used to make fraudulent purchases.

Score Simulation and Score Insights

Have you ever wondered what the effect on your credit score might be if you pay off credit card debt balances, get a credit line increase or apply for a credit card?

Some credit monitoring services give you a chance to experiment in a virtual sandbox and see the possible effects on your score before you make any real changes to your accounts.

Dispute Tools

For tracking purposes and direct efficiency, it’s probably best to make a dispute directly with the credit bureau if there’s a mistake on your credit report, but a handful of credit monitoring services have built this functionality into their platform.

What to Look for in a Credit Monitoring Service

Some credit monitoring services may offer more options than you need and some may not offer enough information or features. Consider your needs before choosing.

If you’re considering a service just to keep an eye on things, your needs will differ from someone preparing for a mortgage or rebuilding bad credit.

• Access to all scores: Many services only offer access to your credit score from one bureau. However, it’s common to find slightly different information on each credit report from each respective credit bureau. For in-depth reporting, you may also want access to the individual scores for various credit types, like your credit card score or your auto loan score.
• Trusted name: The consumer credit space is littered with companies that don’t offer much value — even for free — or who may be trying to sell your information to other marketing partners. Some are more candid about how they make money. For example, Credit Karma recommends products and earns a commission when you buy and other free services may bury the details deep inside their terms of service agreements.
• Mobile and desktop apps: Depending on the devices you use, you may want access to alerts when you’re on the go. Not all providers offer a mobile app, so this may be a deciding factor.
• Easy to cancel: Your needs for credit monitoring software may be temporary or you may not need a premium service forever. Maybe you’re working to improve your credit prior to buying a home. After the mortgage is approved, a service with fewer features may be adequate. Make sure you can get out easily when you’re ready and consider your needs carefully before agreeing to a lengthy or expensive contract.
• Easy-to-use reports: Can you print out your report and bring it to a loan broker or save to read your credit report at the monthly family budget meeting? Believe it or not, some reporting services make this difficult.

Choosing the best credit monitoring service requires that you match the features to your needs. Some providers offer a basic service like fraud monitoring or ID theft protection.

If you’re building or rebuilding your credit or if you have a credit goal in mind, like getting a great mortgage rate or a low lease rate, you’ll probably want a full-featured credit monitoring service with more tools.

Choose the Best Credit Monitoring Service Today

It’s important to mention that AnnualCreditReport.com is a free option that provides all three credit reports once per year as required by federal law. However, the government-authorized site doesn’t give you a score, just the reports, nor does it provide credit monitoring.

Cost-conscious consumers can choose from several lower-cost credit monitoring plans starting at about $10 per month from the list above or take advantage of Credit Karma’s free credit monitoring system.

For the most detailed reporting, it’s tough to beat MyFico’s Premier plan, which is pricier than competitors but provides the same reports used by most lenders, along with a wealth of tools and report options.

Frequently Asked Questions

The post Best Credit Monitoring Service by Eric Huffman appeared first on Benzinga. Visit Benzinga to get more great content like this.

You don’t have to be an active investor to enjoy a good Wall Street movie. Most don’t require more than a basic understanding of trading. In fact, it helps sometimes if you suspend some of your investment strategies and wealth-building theories for a couple of hours. Stock market documentaries can benefit from an open mind as well. Often they don’t just tell a story but also hold a few lessons — even lessons of what not to do. You can sign up for a free 30-day Amazon Prime trial and get unlimited access to all the Wall Street and stock market movies you’d like – and thousands more. Here are the best stock market & wall street movies.

Quick Look at the Best Stock Market and Wall Street Movies:

• Wall Street
• Wall Street: Money Never Sleeps
• Trading Places
• The Wolf of Wall Street
• Boiler Room
• Margin Call
• The Big Short
• Floored
• Trader
• Warren Buffett: The World’s Greatest Money Maker

Best Stock Market & Wall Street Movies

1. Wall Street (1987)

“Greed is good.” ~ Gordon Gekko Michael Douglas’s portrayal of Gordon Gekko leaves us with an impression of Wall Street that’s difficult to shake, setting a new mold for Hollywood’s Wall Street tycoon. All who follow in similar roles in later movies somehow still remind of the slicked-back well-dressed corporate raider. You don’t need to be an expert stock trader to understand the plot of Wall Street. It’s a time-tested story, with a stock market backdrop and Oliver Stone’s flair for mixing grit and glimmer to pull us into each scene. An all-star cast includes Martin Sheen and Charlie Sheen, father and son both in real life and in the movie, Daryl Hannah, Hal Holbrook, and Michael Douglas, of course. Charlie Sheen plays Bud Fox, the ambitious protege of Gordon Gekko — until Gekko makes a play for the airline at which Fox’s father is a union leader. Then it turns into a game of financial survival and both sides are all in.

2. Wall Street: Money Never Sleeps (2010)

The original Wall Street movie was so well-known that it’s a bit surprising that the studio waited until 2010 to make a sequel. Like many sequels, Wall Street: Money Never Sleeps doesn’t pack the same punch as the original — and can be a little tougher to follow — but that doesn’t keep the movie from being fun to watch. Michael Douglas is back as Gordon Gekko, just released from prison, penniless and ostracized. Shia LeBoeuf enters the story as Gecko’s future son-in-law, to be married to Gekko’s daughter, played by Carey Mulligan. Much of the story centers around a stock market and economy in turmoil —  and wouldn’t you know it, Gekko finds a way to play economic disaster to his advantage as well.

3. Trading Places (1983) 

In Trading Places, Eddie Murphy, as Billy Ray Valentine, has a way of making complicated things simple to understand. Murphy’s character approaches trading with a streetwise perspective and a keen understanding of human nature that often seems to escape the more learned investors, most of whom are from old money. The movie’s premise takes a street hustler, Murphy, and drops him into a life of privilege as the result of a bet between rich men that questioned the role of favorable or unfavorable circumstance in a man’s success in life, a question more poignant than the movie’s light-hearted approach suggests. “That man is a product of a poor environment. There’s nothing wrong with him, I can prove it.”  – Mortimer Duke, Trading Places.

4. The Wolf of Wall Street (2013)

A remake of its 1929 namesake, The Wolf of Wall Street spins the yarn of Jordan Belfort, played by Leonardo DiCaprio, a young man who sees how a local broker sells stocks and knows he can do it better. He goes on to build his own firm, and excess is a key component of the movie, riding alongside cunning, daring, and yes, the exhilaration of risk. There are limits to how far you can push an enterprise that sells worthless stocks, as DiCaprio’s character learns, finding himself in the crosshairs of federal authorities. Jonah Hill, Margot Robbie, and Matthew McConaughey help to round out the cast in the well-acted movie that pulls you in from the first scenes, immersing you in a movie premise so absurdly far removed from the lives most of us live that you can’t help but watch.

5. Boiler Room (2000)

You won’t learn anything about how Wall Street works when you watch Boiler Room, but you’ll learn why buying stocks from a broker who calls you out of the blue to pitch you on the next big thing might not be a great idea. The movie focuses on an investment firm on Long Island, a high-pressure sales force that doesn’t take no for an answer as they sell stocks of companies that may or may not exist. Ben Affleck, Vin Diesel, and Giovanni Ribisi star in this high-octane stock-selling flick that finds the primal side of the business and the male gender, telling its tale through this snarling wolf pack of brokers who wear Italian suits, drive expensive cars, and leap into fistfights with anyone who doesn’t belong to the pack.    

6. Margin Call (2011) 

Inspired by real events, Margin Call speaks to the financial crisis of 2008-2009, drawing a grim picture of the personalities who brought the world to the brink. The movie doesn’t pretend to follow the real events of the financial meltdown of 2008, instead, it suggests that it might have looked like this on the inside had you been a fly on the wall. There aren’t any feel-good moments in the movie. Still, the movie is instructive and more than once will make you question who was really at fault for the housing crisis and the ensuing economic collapse. “There are three ways to make a living in this business: be first, be smarter, or cheat.” Margin Call (2011) – Senior Partners Emergency Meeting    

6. The Big Short (2015) 

In the months leading up to 2008’s economic panic, a handful of outsiders saw the white-crested top and ominous shadow of the tsunami headed our way. Don’t we all wish we could have predicted it? At any rate, these outsiders worked out a scheme to bet against the system with the big banks as their targets. Based on the book by Michael Lewis, The Big Short somehow manages to make us think — as well as laugh — as the world’s financial system is at its precipice.

Best Stock Market & Wall Street Documentaries

1. Floored (2009)

“If you want a friend, get a dog. You don’t have friends in the pit.” – Floored

They’re often rude and crude and they sometimes punch each other in the face, but they’re real and their grit and primal instincts draw you in as they spin their tales of six-figure losses in a day or seven-figure gains in a week. Until 1997, when computer trading arrived, up to 100,000 men and women barked, shouted, screamed, and jostled on the trading floors of Chicago’s trading exchanges. The city of Chicago, a hub of transportation, became a center for futures trading related to livestock, agricultural products, and anything else that flowed through on railroads, roadways, or by a river. Later trading introduced energy trading, metals, and currencies, as well as stocks and bonds. Arguably, the pits made Chicago one of the country’s leading banking centers as well. This documentary takes you down into the energized pits with the barkers. As the story unfolds, you’ll also learn of the devastation that comes from being on the wrong end of a trade during a market swoon and the quieting of the trading floor as computer trading becomes the primary way trades are made. This film will leave you in awe of the gladiatorial energy these traders bring to the battle every day —  and at the same time saddened, wondering what becomes blood warriors when the war goes digital.

2. Trader (1987)

In 1987 the stock market crashed, ultimately taking nearly 23 percent of its value from investors. It was the single largest one-day percentage decline in history. Soft spoken and mild-mannered until he needs to make a trade, stock market prognosticator Paul Tudor Jones predicts the 1987 stock market crash with the help of Peter, a young statistician who works by his side. The pair draw parallels between the markets dynamics in the late 1920’s and the market in 1987 before the crash, finding over a 90% correlation in data points — even as the market rallied bullishly on bad news. Paul is a futures trader and one of the most successful index traders in America, heading up Tudor investment corporation, an investment management company with clients around the world In an early-morning overseas forex trade Paul nets $100,000, the average home price in 1985. In another trade, starting pre-market Paul acquires stock futures worth nearly $90 million in the span of 10 minutes, while simultaneously selling into the market to keep the price from rising too quickly before he fully builds his position. Putting on his lucky sneakers, Paul watches as the market moves down and sideways. Forced to exit the position as the market continues its downward trend, Paul loses $6 million on the speculative trade. Railing against the perception that Wall Street traders are defined by greed, Paul commits 10% of his firm’s profits to charities, primarily the “I Have a Dream” foundation, further pledging to pay the college tuition for underprivileged kids in Brooklyn associated with the group — provided that they graduate high school. While the trading dynamics are captivating, Paul’s compassion is sincere and heart-warming, proving once again that none of us are easily defined as stereotypes would have us believe.

3. Warren Buffett: The World’s Greatest Money Maker (2009)

Get ready to learn a few things. Where the fiction movies in our list are better described as entertainment than education, this BBC documentary takes you inside the life and thought processes of the world’s most successful investor. Famous for longer than many traders have been trading (or even alive, in some cases) Warren Buffett explains one of his many golden rules: Invest, don’t speculate. Still living in the home he bought over 50 years ago for $31,000 and driving a vehicle that he acquired inexpensively because it had prior hail damage, the down-to-earth Oracle of Omaha helps us all to remember that money isn’t everything. This fascinating portrayal departs from other movies and documentaries on our list by leaving the viewer inspired, invigorated with a new and childlike sense that anything is possible, as long as you’re patient and study every situation carefully.

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