I wrote to you a few days ago about the coronavirus and its impact on the markets. The markets are continuing their slide again today, with indexes entering what’s known as a correction, as fears about the spread of the virus have grown.

I’ve said it before, and I’ll say it again. It’s important not to focus on the short-term noise. The only guarantee I’ll ever give you is that markets will go up and they’ll go down, and nobody can say with certainty where they will be tomorrow. However, over time markets tends to go up.

What should you do now?

When markets go down, you should stay the course. Specifically, we think it’s best for everyone to invest in their Mix and turn on Auto-Stash.  Auto-Stash can be your best friend right now. I want you to look back at this time in a few years knowing you picked up investments during all the market cycles. Your Mix is a diversified grouping of bonds and stocks that are global. (There are three types of mix: conservative, moderate, and aggressive.) You can find the mix investments by searching “mix” in the app or in the balance section of investments. If you already own the mix, bravo—keep adding to it on a regular basis.

The Stash Way is the best guidance we can give for up markets and down markets. Simply, consider investing small amounts in your Mix and other investments, on a regular basis.  We make this easy with Auto-Stash. Now, more than ever, is a time to set it and let Auto-Stash work it’s magic.

Market performance over time

We’ve shared this graph with you before, but it’s essential to keep top of mind. The following shows the performance of the S&P 500 for the last 25 years. The S&P 500 is an index that reflects the earnings of the 500 biggest companies in the U.S., and it’s considered a benchmark for the entire stock market. Over time, you’ll see that the price of stocks tends to go up. You’ll notice this chart includes some pretty steep sell-offs in the past, such as the Dotcom bust, and the mortgage crisis that led to the recession in 2009.

Source: Yahoo Finance, February, 2020¹

There are a couple of things that I want to say. First of all, when the markets fall, it can be a great buying opportunity, just like when the markets go up. Here’s the thing: We’ve been in a bull market for about ten years with stock prices basically going straight up. Some may say the price of equities, or stocks, is perhaps even too high.

And when stock prices fall, as they have for the past few days, it’s a chance for you to add to your Mix and other investments at lower prices. (As a reminder Investing involves risk. You should always take your personal circumstances into consideration when making investment decisions.) 

Follow the Stash Way

So what is the Stash Way? We’re glad you asked! It’s a fundamental part of our investing strategy, which has three pillars.

• Invest regularly: Even if you take small amounts and invest them every week or every month, that can add up through the power of something called compounding.

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

• Diversify: Diversification means you’re not putting all of your eggs in one basket, so you can better weather the stock market’s ups and downs. That means you won’t put all of your money in too few stocks, bonds, or funds.

In addition to buying one of the Mixes and sticking to the Stash Way, here are some other tactics to consider.

• People often flock to gold and other precious metals, in what’s called a flight to safety. Why? Gold is gold–it’s a hard metal that always has value. (A word of warning though, gold prices can also be very volatile.)
• You can also consider bonds. Did you know that a generation ago, when people talked about investing in the stock market, that mostly meant they were investing in bonds. Believe it or not, the bond market is much larger than the equities markets, and can provide a measure of stability, acting as a counterweight to stocks. In fact, bond yields often stay stable when the stock market drops.
• Park My Cash (search for it in the Stash app) is an option if you want less “ups and downs” and a lower risk investment.

We are in this all together. Stash is your financial home and your financial partner, and we are here for you.

Stash on!

Brandon Krieg
Founder and CEO

The post Stash’s CEO on Weathering the Storm appeared first on Stash Learn.

And this week markets are reacting to the breakdown of trade negotiations with China, and a renewed trade war as the U.S. has doubled tariffs on $200 billion worth of Chinese imports.

For new investors, seeing the market suddenly start going up and down like a roller coaster can be nerve-wracking. Consider these tips and our general advice:

Follow the Stash Way, our three-step strategy that includes regular investing, diversification, and long-term investing. We also recommend you turn on Set-Schedule, which lets you keep adding small amounts to your investments on a regular basis.

Market volatility is normal.

We’ve been in a bull market for a number of years now. Our economy continues to grow, and markets have been trading at all-time highs.

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

Consider taking a long-term view.  On average, if you look at the last 100 years, markets have increased slightly more than 8% a year*. Going forward, experts predict a long-term expected annual return for US large cap stocks (i.e., the S&P 500) of 5.9%.**

That said, there are some years where the market is strong and some years when things are not as strong. This is why you should consider taking that long term view when you’re thinking about investing.

Some things to think about.

There are two approaches that you can think about. The first one to consider is moving to less volatile investments. If you’re anxious about markets, you could think about adding bonds to your portfolio. They’re often good long-term investments that could help dampen the fluctuations in your returns.

Another option to consider, if you’ve got small amounts of money, is to ride out the downturn and stick to a regular investing schedule, and invest over time. You’ll effectively be purchasing investments sometimes when stocks are low, and sometimes when they’re high. Over time, share prices should even out.

What is a trade war?

You can read our longer piece here. But in short, a trade war is when countries engage in a tit-for-tat over tariffs. In response to increased U.S. tariffs on Chinese goods and services, China plans to impose $60 billion of new tariffs on a variety of U.S. exports.

The existing tariffs have already increased some costs for U.S. consumers, and have reduced demand for some U.S. exports, which could dent our economy, according to experts.

How might the trade war increase costs at home?

The economic conflict appears to be having a negative impact on U.S. farmers, who lost about $12 billion in the first quarter of 2019. Sales of soybeans to China were particularly hard hit. Also, the U.S. spirits industry, producers of whiskey and other hard alcohol, have experienced declining exports not only to China, but to Europe, Canada, and Mexico, where new U.S. tariffs on products have also caused trade tensions, according to sources. Meanwhile, U.S. consumers paid an estimated $12 billion in higher costs related to tariffs since 2018, according to reports. And they are experiencing higher prices on a wide range of items including dryers, lumber, cars, and clothing, shoes, and furniture, among others.

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

Trump has argued such agreements have flooded the U.S. with cheaper foreign-made goods, which make it difficult for U.S. manufacturers to compete. We’ll see how this all plays out.

Look at the big picture.

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

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

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

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

The post How to Keep on Stashing Through the Trade War appeared first on Stash Learn.

I have some really big news: You can now earn stock every time¹ you spend with your Stash debit card!

You may have heard the buzz, because people are just so excited about Stock-Back. It’s the world’s first rewards program that gives you stock every time² you use your Stash debit card, and it’s paid for by us³.

Our goal at Stash has always been to build world-class tools to help you manage your financial life better, and Stock-Back makes you an investor whenever⁴ you swipe your card. Just think—as you live your life, we’ll build your portfolio with you.

So far, your response has been overwhelming! In the first couple of weeks since we launched Stock-Back, Stashers have gotten more than 500,000 Stock-Back rewards. Users who have signed up are investing automatically where they spend day today. We think that’s just so cool, and we’re only gaining speed.

Here are just a few of the millions of ways you can earn Stock-Back:

• Go to McDonalds, and boom—you get stock in MCD.
• Go to your local car wash—you get stock in a diversified ETF.
• Pay your T-Mobile bill, and guess what—you get stock in TMUS.
• Pay your Con Edison power bill—you get stock in ED.⁵

You already know that Stash banking has customer-first features such as no minimum account balances, zero overdraft fees⁶, and the ability to receive your paycheck two days early⁷. But we wanted to do more—way more.

With the addition of Stock-Back, your debit card and your investment account can work together seamlessly to maximize your financial power—making the most of your spending and creating a portfolio that is a reflection of how you live your life.

Stashers want more from their financial institutions than unnecessary fees and charges for using their own money. We think Stock-Back is another building block to enable you to do more with your money.

The Stash community is over 3 million strong now. We’re so proud to be on this journey with you as you take control of building a brighter financial future for yourself.

Stash on!

The whole Stash team wakes up every morning laser-focused on our mission to provide you with the tools, guidance, and education you need to grow wealth and live your best life. We have so many more exciting new things planned for 2019, including some pretty amazing enhancements to the Stash App.

In the meantime, enjoy the nice weather and keep on Stashing!

Brandon Krieg
Founder and CEO

P.S. As always, we love to hear from you. Please write to us at ideas@stash.com.

The post Why We Built Stock-Back® appeared first on Stash Learn.

I hope you’re having a great holiday season so far, and trying to save a little more than you’re spending. (I know it’s hard.)

It’s been a few months since I sent out my last note, and I want to discuss a few topics related to the markets and your portfolio.

We’re a few weeks into some real volatility, which is a fancy word for the roller coaster that the market has been on recently. I’m going to share some of my views around this, and give you some ideas about what you can do.

Here’s the reality

Eighty percent of Americans live paycheck to paycheck, and 40% can’t come up with $400 in an emergency. These statistics are crazy and scary.

You don’t need to be a statistic. There are things you can do to beat the odds.

So what should you be doing?

Auto-Stash, Auto-Stash, Auto-Stash—I can’t say it enough.

Auto-Stash allows you to automate your investments on a consistent basis, and build wealth over time.

That means some weeks you’ll be buying shares when they’re high, other weeks when they’re low, and over time, the highs and the lows should balance themselves out. Like now, for instance, you’ll be buying while the market has been down. But it could be up tomorrow, nobody knows, and we don’t have a crystal ball. (I wish I did, though!)

Here’s why Auto-Stash can be a great tool. By putting small amounts of money into your investments on a regular basis, you can feel good about ignoring market volatility and focus on investing for the long term. Even $5 a week can make a difference.

We think Auto-Stash is so important, that’s why we made it part of The Stash Way.

So, why are the markets going down right now?

There isn’t one reason, there are a few:

• Fear over rising interest rates, and whether the Federal Reserve will continue raising short-term rates over the coming year.
• Escalating trade tensions, including tariffs with China, are causing some emotional angst.
• Something called the yield curve.

So what should you do with all this information?

Ignore the noise

TV news personalities and talking heads can make investing really confusing (that’s their job), but it’s actually very simple. You should continue investing through all the ups and downs. Don’t focus on today’s news, or even next week’s. When it comes to most of the news about the market, I believe it’s a lot of short-term noise.

Overall the U.S. economy is doing fine, and I’m very optimistic about the future. For sure, it’s been a really hard month for the markets. But  I’ve seen this before over my 20-year career in finance. This is why we set Stash up to focus on your long-term financial goals.

If you’re trying to “trade” through this, good luck to you. We don’t, and will never recommend timing the market.

Here’s why: Markets don’t just go up, they can also go down. The current market has been pretty extreme, so the down days have been big, and the up days also have been big. The type of market we’re in now can actually be a good thing for your long-term portfolio if you’re using Auto-Stash. You want to consider actively participating in the markets, even when they’re volatile, at all the prices, high and low.

History doesn’t always repeat itself but if you look at the market between 2000 and 2017, it has increased an average of 6.26% annually.  And we all know there have been some good and bad years over this time.

Last, but not least

I want to say that you’re awesome! Three years ago, Ed and I started Stash to help you get off the sidelines and start taking control of your financial future. Today, three million of you have Stash accounts and we couldn’t be more proud.

Don’t be afraid of this volatility, embrace it. Just keep following our time-tested strategy. If you don’t have it on already, go ahead and turn on Auto-Stash, you’ll find it in the home feed of the Stash app.

When in doubt, follow The Stash Way.

We look forward to many great years ahead as we help you meet your financial goals.

Thanks—and keep on Stashing!

Brandon Krieg
CEO – Stash

The post Stash’s CEO: It’s Always the Time to Invest for the Long Term appeared first on Stash Learn.

When I quit my job on Wall Street, I had that feeling you get the night before you start a big adventure. My partners and I were excited to find out what it would actually look like when Stash was in the hands of real people.

Over my 20 year career, I learned that many Americans simply don’t invest. I saw that Wall Street made it difficult for people to start, by keeping the investing world confusing, expensive, and intimidating. I knew there was something fundamentally wrong with that, and I hoped Stash would be that solution. What I didn’t know was that you’d take Stash and ignite a movement.

And that’s precisely why we’re excited about what’s happening in this community. Every single one of you represent something bigger than a single investor changing his or her financial future. You’re part of a group of people that are diversifying the investing world. You’re bringing a fresh, new perspective and you’re proving that you don’t have to change who you are in order to invest.

My favorite part of the day is talking to members of the Stash community—Uber drivers, men and women of our military, artists, teachers, and entrepreneurs. People like you, your friends and your peers around the country. And there’s one thing that gets me every time. It’s when someone says, “I never realized that I could actually become an investor. Not just have a service pull money out of my account and do something fancy with it behind the scenes, but actually do it myself. I just didn’t think that was possible. And I feel really good about it.”

That’s why I’m excited to announce that we just closed another round of funding—our Series A (you can read about it here). We raised $9.25 million, which means that our business is growing and people are watching. Eyes are on this movement and what it means for the world of finance.

Here’s what we’re going to do with the funding: We’re going to grow and continue to reach more people. We’re going to build new features for you, and continue to improve the Stash experience. We’ll infuse the app with educational content, designed to build your investing confidence and financial literacy. We’re going to expand our account offerings, tools within the app and investment opportunities to meet your needs—you started with a personal account, and we’re going to work hard to provide other types of accounts so you can meet your family’s goals as well.

And above all, we’re going to continue to put your needs, and the needs of the Stash community first. Because that’s what financial companies are supposed to do.

You’ve known this all along—it’s not Wall Street’s world. It’s yours. You’re part of a movement, and there’s no stopping you now.

Sincerely,

Brandon Krieg
CEO & Co-Founder

The post Letter from CEO to Stash Investors appeared first on Stash Learn.