Is it time to play defense? Economists have a fairly simple story to tell about the 2023 economy: things are weird. Inflation raged out of control in 2022, but has been falling in 2023. A volatile stock market remains below its 2021 highs, but still trended positive since the start of the year and may have entered a new bull market. Mortgage rates have tripled, but try telling that to the housing market. Economists and investors alike have issued steady warnings about a coming recession, but it feels like each month’s labor statistics beat the last.
A financial advisor can help you prepare your portfolio for a potential recession. Find a financial advisor today.
In other words, nobody really has a handle on what’s happening out there. That said, there are some potentially troubling signs ahead, especially for the third quarter of 2023. Several long-term factors may come to a head in late summer, ranging from top-level issues such as banking instability and delayed-impact Federal Reserve rate hikes to bottom-up issues such as resumed student loan payments. Together, it might all be enough to finally tip the economy into a long-awaited recession.
The right approach to this, as Morgan Stanley argued in a recent brief, might be to start thinking defensively.
“The stock market has managed to stay positive for much of this year. However with interest rates at their highest level in more than a decade and economic growth slowing, not to mention recent turmoil in the banking sector, uncertainty looms large,” writes Daniel Skelly, managing director and head of Morgan Stanley’s wealth management market research and strategy team.
“Additionally, equity valuations are already high relative to earnings – and current earnings estimates may be inflated. As a result, investors may see another drop in the stock market before they can truly declare the bear market over,” Skelly also writes.
In the face of this uncertainty, Skelly says investors may want to consider playing defense in the back half of 2023. In particular, he recommends seeking out dividend stocks. The reason is volatility, as dividend stocks tend to be an excellent buffer against unpredictable markets for four key reasons.
Price Supports
Dividend stocks tend to have built-in support against price volatility. In the short term, when companies issue a dividend to their shareholders, the price of a stock tends to drop. This has to do with a number of factors, most often the fact that new investors don’t want to invest if they’re being left out of the upcoming payments.
That’s not a bad thing, though, because when the share price drops for a dividend-paying stock the asset’s overall yield rises. For example, say you pay $10 per share for a stock that pays $1 in dividends. That’s a 10% yield on your investment ($1 dividend payment / the $10 you paid to receive it). If the share price drops to $8, but the company maintains its $1 per share dividend, that yield floats up to 12.5%.
That builds in a counter-cyclical pressure on the stock. As the share price falls, the yield increases. As the yield increases, more investors will get interested in the stock. That new interest will presumably drive new investment, boosting the share price back up. It’s not a guaranteed cycle, there’s much more going on here, but it can help smooth out volatility relative to stocks that generate their value entirely based on returns.
Stronger Returns
Historically, dividends have played a much larger role in market returns than many investors realize. As Morgan Stanley notes, in recent years dividend payments have lost ground compared to capital gains. From 2013 to 2022, only about 17% of the stock market’s overall returns came in the form of dividend payments. However, this has less to do with reduced payments and more to do with the explosive gains in stock value over that decade.
Historically, though, dividend payments have accounted for anywhere between 37% and 40% of the market’s overall returns.
Morgan Stanley expects a reversion to norms. “The next several years are likely to be marked by lower equity returns and higher volatility,” Skelly writes, “which could lead dividends to account for a greater portion of total stock market return.”
If the economy does slip into a recession, or even if the stock market simply enters longer-term bear territory, then capital gains-based returns will suffer. Long-term investors who can afford to wait out a downturn will probably be fine, but anyone who is looking to generate returns in the next year or two will probably face much less reliable, often less profitable, share prices. Dividend stocks can help offset that risk.
Signals for Good Fundamentals
Long-term investors should take note too, though.
As Morgan Stanley writes, dividends are a very strong bellwether for the underlying strength of a company. “When a company can reliably pay dividends or even increase them, it likely has a certain level of financial strength and discipline. For investors, this regular income stream can offer some hedge in what continues to be an uncertain stock market. In fact, in 2022, the S&P 500 overall lost about 18%, but the S&P 500 Value Index (which is often used as a proxy for dividend stocks) kept its losses to about 5%, and the S&P 500 High Dividend Index lost about 1%.”
In essence, when a company can afford to pay or maintain dividend payments, it’s signaling that it has significant cash on hand above and beyond its business needs. Now, to be sure, this is not always the case. It is not unheard of for corporate leadership to recklessly reward themselves and other investors at the expense of long-term business interests. So make sure you evaluate a company’s whole picture. If dividend payments take place in the context of weak leadership or an atmosphere of poor judgment, pay attention.
Otherwise, dividends can show that the company has strong revenue, good cash reserves and a handle on its debt, and that it expects this situation to continue. Especially if the economy enters recession, that’s an excellent signal for fundamental value. It suggests that this company can be a good long-term investment, regardless of current share prices.
Inflation Hedge
Finally, dividend stocks have historically been an excellent hedge against inflation.
Dividend-paying stocks tend to make up an enormous portion of the stock market’s return during periods of high inflation. One analysis by Fidelity found that when inflation was at 5% in the 1940s, 1970s and 1980s, dividends made up 54% of the S&P 500’s overall returns. This is in large part because companies can adjust their dividend payments on a quarterly basis, letting them keep up with the changing value of money.
In an atmosphere of ongoing inflation, dividend stocks are historically a strong choice.
Where to Focus Your Attention
For active stock pickers who would like to pursue a defensive dividend strategy, Morgan Stanley recommends four key areas of investment:
Industrials: Manufacturing and logistics firms are likely to benefit from increased infrastructure and defense spending, according to Morgan Stanley.
Health care: Medical firms have tended to outperform the market in past recessions, and are poised to take advantage of new technologies.
Consumer goods: Morgan Stanley expects these firms to raise consumer prices and recover well from high commodity prices over the past year.
Global stocks: Investing in global high-dividend stocks can allow investors to diversify their portfolios and capitalize on the momentum in this area.
When you look for dividend stocks, be somewhat judicious. In particular, be careful of stocks with yields that are too high, Skelly advises. This can signal an imbalance between the stock’s share price and its dividend payments, suggesting high payments that the underlying business may not be able to sustain.
Also, look at the stock’s price-to-earnings (P/E) ratio. Despite concerns over bear market territory, investors are also worried that many of the market’s high-performing stocks may be overvalued relative to the company’s underlying earnings. In those cases, investors can often expect the stock to lose value, and to lose value particularly quickly in the event of a recession.
Bottom Line
Many investors are worried about a recession in late 2023. To insulate your portfolio, Morgan Stanley recommends investing in dividend stocks to take advantage of their historic stability and potential for outsized returns in down markets. Active stock pickers who wish to pursue this strategy may consider dividend stocks in the industrial, health care and consumer goods sectors.
Dividend Investing Tips
If you need help investing in dividend stocks or want more guidance when it comes to your whole portfolio, consider speaking with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Interested in dividend investing? You’ll want to familiarize yourself with how dividends are taxed. The exact dividend tax rate you pay varies by the type of dividends you have: non-qualified or qualified. Here’s everything you need to know about dividend taxes.
Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
Since launching in 2021, hundreds of thousands of users have used the TPG App to track more than 100 billion points and miles.
To help users maximize their points potential even more, the TPG App has a new feature called “Rewards Boost,” giving users even more personalized insights into choosing their next credit card.
How the new feature works
The TPG App already tracks users’ spending across all of their connected cards, including via its “Out Making a Purchase” Card Advisor feature, which helps users choose the most optimal credit card already in their wallet for a specific purchase in real time.
The app’s latest feature, “Rewards Boost,” analyzes users’ existing spending habits to recommend a credit card based on their highest spending category to maximize earnings. It also shows users exactly how many points they could have earned the previous month by using those cards.
For example, let’s say you spent a significant amount of money, $1,200, on dining last month via your Capital One Venture Rewards Credit Card.
Rewards Boost would let you know that 2 miles per dollar per purchase earned from the Venture card would equate to 2,400 miles per month. This card earns users 2 miles per dollar per purchase, a stellar return for flat-rate rewards and certainly better than earning no rewards at all. However, Rewards Boost would notify you that another card, such as the American Express® Gold Card, would have earned you more since it earns 4 points per dollar on dining at restaurants (including takeout and delivery in the U.S.) in addition to 4 points per dollar on up to $25,000 in purchases at U.S. supermarkets per calendar year (then 1 point per dollar).
Sign up for our daily newsletter
By using an Amex Gold on those dining purchases, you could have earned 4,800 points, equivalent to $96 when used as Amex Membership Rewards, per current TPG valuations. If May was a typical month for dining spending for this person, then over time, using this card would equate to over $1,150 annually in points just in the restaurant and dining category.
Though you may be deterred by the Amex Gold’s $250 annual fee (see rates and fees), Rewards Boost would inform you that you’re still saving more than $900 in net points value – and that’s before factoring in the aforementioned spending categories, in addition to 3 points per dollar on flights booked directly with the airline or through the Amex Travel portal and 1 point per dollar on all other eligible purchases. These earning rates are on top of the statement credit offered by this card, including $120 in Uber Cash annually and a $120 annual dining credit (both divvied up as $10 monthly credits).
The real value of Rewards Boost
We get it — one of the biggest hurdles for getting a new credit card is understanding whether it will truly be valuable to you and your personal spending habits. Also, the high annual fees of some cards (looking at you, The Platinum Card® from American Express; see rates and fees) can be enough to scare off even seasoned credit card veterans.
With Rewards Boost, you don’t have to worry about keeping track of every credit, perk or other benefit a card offers just to barely offset an annual fee for a card that doesn’t fit your lifestyle. Rewards Boost tells you the exact value you could be saving on a monthly and annual basis just by switching to using a card to complement your biggest spending category.
Bottom line
Not only does Rewards Boost show your best next card, but it takes all the guesswork out of whether a card will actually be a valuable addition to your wallet.
Download the free TPG App to see how you can boost your rewards today!
Related reading:
For rates and fees of the Amex Gold Card, click here. For rates and fees of the Amex Platinum Card, click here.
Federal bank regulators have taken another step to address suspected bias in the residential appraisal profession.
The Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, National Credit Union Administration and Consumer Financial Protection Bureau have proposed guidelines for how banks and other mortgage lenders should consider challenges to home appraisals.
The joint guidance, released for public comment on Thursday, gives lenders direction on how to craft policies for initiating an appraisal review process known as a reconsideration of value, or ROV, for collateral valuation. The proposal flags a number of deficiencies that could be used to trigger an ROV, including discrimination on the grounds of race, color, religion, sex, disability, familial status or national origin.
“Deficient collateral valuations can keep individuals, families, and neighborhoods from building wealth through homeownership by potentially preventing homeowners from accessing accumulated equity, preventing prospective buyers from purchasing homes, making it harder for homeowners to sell or refinance their homes, and increasing the risk of default,” the joint proposal reads. “Valuations that are not credible may pose risks to the financial condition and operations of a financial institution. Such risks may include loan losses, violations of law, fines, civil money penalties, payment of damages, and civil litigation.”
The proposal is the latest government action to emerge from the White House’s property appraisal and valuation equity, or PAVE, task force, which was assembled in 2021 to address potential discriminatory practices that have contributed to racial wealth disparities. Last week, the same agencies proposed guidance on how to deal with automated valuation models.
On Thursday, regulators also noted that an ROV should be initiated when appraisal reports are compiled using incomplete or inaccurate information, poor valuation models, inaccurate assumptions or conclusions that are “otherwise unreasonable, unsupported, unrealistic, or inappropriate.”
The guidance states that a financial institution can request an ROV based on its own review process or based on information provided by a consumer, loan officer or other lending official. Notably, this process allows for prospective borrowers to request the consideration of other comparable properties not included in the initial appraisal.
Comparable properties, also known as comps, are the backbone of property valuation. Appraisers are tasked with finding similar properties based on factors such as size, number of rooms and other attributes that have been sold recently in the area immediately surrounding a subject property.
Appraisers say the mechanisms of this process prevent personal bias from creeping into property valuation. Critics say limiting the use of comps to the immediate proximity of a subject property perpetuates long-standing biases, with the historically majority-minority neighborhoods being permanently disadvantaged compared to their majority-white counterparts.
ROVs are not a new concept — lenders and consumers have long been able to appeal property valuations. But, as the joint proposal notes, there have been questions about when and how these processes can and should be initiated, and how to do so without hindering the independence of appraisers. The concern is that making the process too expansive could pressure appraisers to value properties closer to contract value than they might otherwise.
The proposal notes that the Truth in Lending Act and its implementing statute, Regulation Z, prohibits lenders from compensating, coercing, extorting, bribing or taking other steps to encroach upon an appraiser’s independent valuation of a property. But, the proposal notes that the same regulation enshrines the right for lenders to challenge appraisals that include critical errors.
The public will have 60 days to weigh in on the proposal, which will be posted to the Federal Register.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Investing in stocks can seem like a daunting task.
There are so many things to consider when it comes to investing, and the stock market is constantly moving.
Stock market investing is a popular option to increase net worth and make money.
Many people are looking for ways to invest their money, with the number of individual investors increasing rapidly in recent years.
This guide covers many important factors for how to invest in stocks for beginners.
Starting out as a newbie trader can be scary and overwhelming… don’t worry, all seasoned traders had to start at the beginning too!
Let’s take away that quell those thoughts and focus on why you want to learn to invest in stocks.
This guide will give you everything you need to know about how to invest in stocks as a beginner investor!
What Are Stocks?
In the most basic form, stocks are a form of investment. When you own a stock, you have a piece of ownership in the company’s equity.
The stock market is a real-time financial market in which investors buy and sell stocks and other securites. The stock market is made up of many companies and individuals who are actively investing in stocks.
Stocks are an excellent way for companies and individuals to invest in a company and receive a share of the company’s profits.
Many of the growth stocks (FAANG stocks) are those who investors want their stock price to increase over time. Thus, increasing their overall portfolio’s net worth.
FAANG Stocks is an acronym for: Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly known as Google).
Some companies like Chevron (CVX) pay out a dividend each quarter to their investors.
There are thousands of stocks available to trade.
What Can You Invest In The Stock Market?
There are many investment opportunities in the financial market, so it is important to be informed about what you can invest in. Below are some of the places where you can invest your money:
Stocks
Bonds
Mutual funds
ETFs
Commodities
Futures
Options
Now, we are going to look at the most common.
Individual stocks
Individual stocks are a type of investment that you can make yourself.
You can choose how many shares of a certain company you want to purchase.
For example, you like Tesla for how they are innovative in the electric car space. You can choose to invest 20 shares of their stock.
As a long-term investor, you want to hold a portfolio of 10-25 stocks. Find a list of beginning stocks to build your portfolio.
Individual stocks can be bought or sold as a way to dip your toe into the stock-trading waters.
As a short-term investor, you are looking to make money as the stock price increases or decreases.
Mutual Funds
Mutual funds are managed portfolios of stocks.
As a result, mutual funds typically have load fees equal to 1% to 3% of the value of the fund.
One of the most popular mutual funds is VTSAX because of its expense ratio is .04%
Mutual funds are a clear choice for most investors because of the simplicity to invest in the market. This can be a good investment for both novice and experienced investors, as they offer decent returns with lower risk.
They tend to rise more slowly than individual stocks and have less potential for high returns. Mutual funds are a great way to diversify your portfolio and gain exposure to a variety of different securities.
All mutual funds must disclose their fees and performance information so that you can make an informed decision about whether or not to invest.
Exchange traded funds (ETFs)
Exchange traded funds (ETFs) are a type of exchange-traded investment product that must register with the SEC and allows investors to pool money and invest in stocks, bonds, or assets that are traded on the US stock exchange.
They are inherently diversified, which reduces your risk.
This is a good option for beginner investors because they offer a large selection of stocks in one go.
ETFs have a lower minimum to start investing, which is a draw for many investors starting out with little funds. Plus there are many different types of ETFs to choose from.
ETFs are similar to mutual funds, but trade more similarly to individual stocks. With ETFs and Index Funds, you can purchase them yourself and may have lower fees.
Why Stock Prices Fluctuate
Stock prices fluctuate because the financial markets are a complex system. There are many factors that can affect the price of a stock,
There are a number of factors that can influence stock prices, including:
Economic indicators like GDP growth, inflation, and unemployment rates
Company earnings reports
The overall health of the economy
Political and social instability
Changes in interest rates
War or natural disasters
Supply and demand,
Actions of the company’s management
Short squeezings like what happened with GME or AMC
The volatility in the stock market is the #1 reason most people stay out of investments. However, on average, the stock market has moved up 8-10% a year.
What is the best thing to invest in as a beginner?
The best thing to invest in as a beginner is your time.
You need to learn how the stock market works. Just like you would get a certification or degree, you should highly consider an investing course.
Learn and devote as much time as you can to investing in stocks.
How To Invest In Stocks For Beginners?
Investing in the stock market can be a great way to make money! If you’re looking for ways to make money or grow net worth, investing in a stock is a smart choice.
With online access and trading being easier now than ever, it can be easier than ever to start buying stocks.
Let’s dig into how to invest in stocks like a pro.
FYI…You should do your own research before investing.
Step #1: Figure out your goals
Figure out your goals to help with setting an investing strategy.
What are you trying to achieve with stock market investing? Is it supplemental income? A certain level of wealth for retirement? Are you looking for short-term or long-term gains?
Once you know what you’re aiming for, it will be easier to find the right stocks and make wise investment decisions.
Your reason to invest in stocks will be different than everyone around you.
Some people want to supplement their weekly income.
Others want to invest in companies for the long term.
My goal is to make weekly income from the stock market. That is my investment strategy for non-retirement accounts.
You need to spend time understanding WHY you want to buy stocks.
Knowing this answer will help you define what type of trader you will be.
Step #2. Decide how you want to invest in the stock market
When you decide to invest in the stock market, you need to choose what you want to invest in.
You can invest in stocks, which are shares of ownership in a company, or you can invest in bonds, which are loans that a company makes. There are also other options like mutual funds and exchange-traded funds (ETFs), which are collections of stocks or bonds.
Also, you can expand this to what types of investments will you have in various retirement or brokerage accounts. For example, you may invest in mutual funds with your 401k, ETFs with your Roth IRA, and stick with individual stocks for your taxable account.
This is a personal decision.
Many people when they are first starting to trade stocks choose to limit purchasing stocks with a limited percentage of their overall portfolio.
Step #3. Are you invest in stocks for the short term or long term?
The buy and hold investor is more comfortable with taking a long-term approach, while the short-term speculator is more focused on the day-to-day price fluctuations.
Once again, this is a personal preference.
One of the most common themes of many investing gurus is, “Remember that stock prices can go down as well as up, so it’s important to stay invested for the long term.”
However, this full-time trader wants to make money on those highs and lows.
Knowing your overall investment horizon will help you decide how much time you plan to hold onto your investments to reach your financial goal.
Also, you can choose different time horizons for different accounts.
Step #4: Determine your investing approach
Passive and active investing are two main approaches to stock market investing.
Passive investing does not involve significant trading and is associated with index funds.
Passive investing is a way to DIY your investments for maximum efficiency over time.
Thus, you would contribute to your investment account on the xx day of the month with $xx amount of money.
This happens with consistency regardless of where the market stands on that day.
You are less warry of where the stock market will go and focused on overtime it will continue to go up.
Active investing takes the opposite approach, hoping to maximize gains by buying and selling more frequently and at specific times.
Active investing is when an investor is actively acquiring, selling, or holding bought stocks.
This could be with day trading or swing trading.
You may hold stocks for less than a day, a few days, or a couple of weeks.
The purpose of having active investing is to make profits.
In the stock market, investors make efforts to increase their net worth over time or to make income off the market.
Step #5: Define your investment strategy
When it comes to investing in the stock market, there are a few key factors you need to take into account: your time horizon, financial goals, risk tolerance, and tax bracket.
Do you want to be an active trader or stick with passive investing? What kind of investor am I?
There is no right or wrong answer as this is a personal preference.
Ultimately, you want returns to be greater than the overall S&P 500 index for the year.
Once you’ve figured these out, you can start focusing on specific investment strategies that will work best for you.
Be aware of any fees or related costs when investing. Fees can take a bite out of your investments, so compare costs and fees.
Step #6: Determine the amount of money willing to lose on stocks.
Trading stocks online is inherently risky.
You want to consider what your “risk tolerance” is. Simply put, how much are you willing to lose in stocks before you want to quit?
The biggest reason most people quit trading stocks is that they do not know their risk tolerance and fail with risk management.
You will lose on trading stocks. The goal is to lose a small amount on some of the trades and gain a greater amount of more of your trades.
How much risk you can reasonably take on given your financial situation?
What are your feelings about risk?
What happens when your favorite stock drops 25%?
Understanding your risk tolerance and how much you are willing to lose will help you keep your losses small.
Start with a small amount of money when investing in stocks. Also, make sure you have enough money saved up so you can handle any losses that may occur.
How to Start Investing in Stocks
There are a variety of ways to start investing in stocks. Some methods include getting a small account balance and then buying shares, creating an investing club with friends, or researching the companies you want to invest in.
Now, that you have determined how and why you want to invest in stocks. Let’s dig into the nitty gritty of how to manage a stock portfolio.
On the other hand, if you don’t invest enough, you could miss out on potential profits. Try starting with an amount you’re comfortable losing if the stock market does go down.
1. Open an investment account
There are a few things you need to do in order to start investing in the stock market.
The first is to open an investment account with a broker or an online brokerage firm.
There are different types of accounts you can open:
Taxable accounts like an individual or joint brokerage
Retirement accounts like IRA or Roth IRA
These are the most basic investment accounts, here is a list of types of investment accounts.
If you plan to hold EFTs or mutual funds, Vanguard is a great place to start.
If you plan to be an active trader, I would look at TD Ameritrade or Fidelity. Be wary of Robinhood or WeBull.
2. Saturate yourself in Stock Market Knowledge
On the simplest level, it can be incredibly easy to begin your investing career with little-to-no knowledge, research, and expertise.
If you have even a remote understanding of stocks, then learn what you need from an easy-to-find YouTube video, followed by watching some of your favorite TV shows to learn more about the market and its secrets.
With that said, you need to be digesting the basics from start to end of getting your first investment started.
As the title reveals, investing can seem intimidating and complicated. Thus, stock market knowledge is invaluable.
3. Consider an Investing Course
A typical investing course would teach how to invest in stocks (and possibly other investments).
As a beginner trader, it is unlikely you will know the full extent of how the stock market works. There are many intricacies you must learn and understand.
Beginners should learn about stock investing basics, such as diversification and investment criteria.
Many investing courses offer a platform on how to make money by trading stocks.
Personally, I highly recommend buying this investing course.
If you choose not to follow my advice, that is fine. Come back when you have lost more money in the stock market than the price of the courses.
I CAN NOT STRESS ENOUGH… how important it is to have a solid foundation and practice in a simulated account before you use your real money.
4. Research the companies you want to invest in
When you’re ready to start investing in stocks, it is important that you do your due diligence and research the companies you want to invest in.
Look for trends and for companies that are in positions to benefit you.
Consider stocks across a wide range of industries, from technology to health care. It’s also important to remember that stock prices can go up or down, so always consider this before making any investment decisions.
5. Choose your stocks, ETFs, or mutual funds
Next, you have to decide what fits your investing strategy. Are you looking to buy:
Stocks
ETFs
Mutual Funds
Regardless of which type of investment you make, you must look for companies that have attractive valuations and growth prospects. In the case of index funds or ETFs, which fund has the companies you find attractive.
Most importantly, you should also take into account the company’s financial health and its prospects for future growth.
Make sure you understand the risks associated with holding a particular stock, including possible price fluctuations and loss of value.
7. Take the Trade
This is the hardest step for most people is to take their first trade.
Thus, why learning to trade stocks is great to learn a simulated account using fake money. Then, move to a LIVE account using your real money.
At some point, in your investing in stocks journey, you must press the buy button.
For many the investment platform may be overwhelming to use, so check out your brokerage’s YouTube videos to help you out.
8: Manage your portfolio
Managing your portfolio is important to keep your investments in good shape.
If you are a long-term investor, diversify your portfolio by investing in different types of investment vehicles and industries.
If you prefer to swing trade or day trade, then you want to make sure you always have cash on hand and are rotating your portfolio to take profit.
Investing can be difficult for beginners who often lack knowledge about the stock market.
It is important to remember to keep investing money and rebalance your portfolio on a regular basis. This will help ensure that you stay on top of your investments and achieve the desired result.
9. Selling Stocks
For most investors, it is harder to sell their stocks than to purchase them. There are a variety of factors for that. But, you must sell your stocks at some time to realize your gain.
Don’t panic if the market crashes or corrects – these events usually don’t last very long and history has shown that the market will eventually rebound. Most people tend to panic sell when stocks are low and FOMO buy when the market is at highs.
When you are ready to sell, aim to achieve a percentage return on your investment.
This will require some focus on your time horizon and the stocks you want to invest in.
Also, you need to consider any taxes that may be owed on the sale of stock.
If you’re new to stock investing, consider using index funds instead of individual stocks to gain broad market exposure.
10. Journal & Analyze your Trades
Journaling is a way of recording the important decisions you make during trading to help yourself remember what happened in your trades. It can be used as a tool for reflection, learning from mistakes, and reviewing your strategy.
Analyzing your trades means looking back on your trading history with the goal of improving it.
This is the most overlooked step of the investing process.
When it comes to buying and selling stocks, journalling what is happening in the market is an important part of being a successful investor.
Stock Market Investing Tips for Beginners
Ask any seasoned trader, and they will have a list of investing tips for beginners.
They have made plenty of trading mistakes they do not want to see newbies do the same thing.
When starting to invest in the stock market, beginner investors often seek out consistent and reliable investments.
This allows them to slowly learn about the stock market and take calculated risks while also earning a return on their investment. Over time, as they gain experience, they can expand their portfolio to include riskier but potentially more rewarding stocks.
1. Invest in Companies That You Understand
An investor should know the company they are investing in and have an idea of what type of return they expect.
When you are starting out, it is best to invest in stocks of companies that are easy to understand and have a proven track record.
Do NOT invest in stocks based on the advice of friends, what you read in the news, or on a whim – these can be risky moves. Be wary of the popular stocks you can find on the Reddit Personal Finance threads.
2. Don’t Time the Market
In the world of investing, there is one rule that no investors should ever break: do not time the market.
By following this rule, you will always be on top of your investments and will be able to reap the rewards.
There are times to buy stocks and sell stocks. This is something you will learn when investing in a high-quality investing course.
As an average investor, trying to time the market will leave you frustrated by your minimal returns or great losses.
3. Avoid Penny Stocks
Penny stocks are the lowest-priced securities on the market, and they don’t offer any significant upside potential to their investors. While you may hit a home run return on some, many penny stocks tend to trend sideways.
The risk is not worth the return.
If you plan to invest in stocks, avoid penny stocks and focus on healthy companies.
4. Consider Buying Fractional Shares
Fractional share investing lets investors buy less than a full share at one time. Many times, you may not be able to afford the price of a full share.
For example, buying a share of Amazon (AMZN) may cost you upwards of $2800 or more. Thus, you can invest a smaller amount with a fractional share.
You would have to check if your brokerage company allows the purchase of fractional shares.
5. Stay the Course
In order to be successful, a trader must stay the course and maintain their focus. By staying focused, they will have less chance of making mistakes that may lead to big losses or overtrading.
When you’re starting out in the stock market, it’s important to be disciplined with your buying. Don’t try to time the market, because you’re likely to fail. Instead, buy shares over time and stay the course.
That way, you’ll be more likely to see a profit in the long run.
6. Avoid Emotional Trading
In order to be successful in the stock market, you have to maintain a level head.
Responding emotionally will only lead to bad decision making. Instead, stay the course and trust your research and analysis.
Know your weaknesses as well as your strengths.
7. Do Your Research
When you’re ready to start investing in the stock market, it is important to do your research so you can make informed decisions.
There are a lot of stocks to choose from, and it can be tempting to invest in them all.
But remember, you don’t want to spread yourself too thin. Invest in stocks that you believe in and that have a good chance of making you money.
8. Build Wealth
Stock market investing is one of the best ways to grow your money over time.
For long-term investing, you buy stocks in companies and hold them for a period of time, typically years. Over time, as the company grows and makes more money, so does your stock. This is one of the most common ways to build wealth over time.
The other way with short-term investing is to consistently take profit and grow your account over time.
Stock investing FAQs
Here is a list of the most common questions and answers on stock investing.
Q: What is the difference between investing and trading?
Trading is buying or selling financial products with the goal of making a profit. This is normally a day trader or swing trader.
Investing, on the other hand, refers to the process of putting money into an investment with the hope that it will grow. Someone who is focused on the long-term.
Q: Do you have to live in the U.S. to open a stock brokerage account?
No, you do not have to live in the U.S. to open a stock brokerage account. You must find a brokerage company in your area of residence abroad.
Q: How much money do I need to start investing?
The very common question of, “How much should you invest in stocks first time?”
It is recommended to start investing with $500 or more. However, you can start with Acorns with as little as $5.
Check out this investor’s story by starting with a small account of $500 and growing it over $35k in less than 6 months.
It is best to grow your account with your growth or profit.
Q: Do I have to pay taxes on the money I earn from stocks?
Yes, you will be required to pay taxes on the money you earn from stocks.
Q: What are the best stocks for beginners to invest in?
The best stocks for beginners to invest in are those that have a history of staying consistently on an uptrend. These companies’ stock prices have typically risen over the course of the year.
Find a list of beginning stocks to build your portfolio.
Q: How do beginners buy stocks?
Above, we outlined this in detail. In order to buy stocks, there are a few different steps that you should follow in order to maximize your chances of success.
The first step is making sure you have an account. Once you have an account, the next step is to decide which stocks you want to invest in. Then, you must buy your stock. Finally, you must decide when you want to sell your stock for a realized gain or loss.
Q: How many stocks should you own?
The best answer is it depends on your investing strategy.
As a short-term investor, you can only manage a smaller number of trades.
As a long-term investor, you need a more well-rounded portfolio. of15-25 stocks.
More likely than not, the short answer is “as many as you can afford.”
Q: What is the best thing to invest in as a beginner?
The best thing to invest in as a beginner is an index fund.
Indexes are great because they diversify across many different types of investments and don’t require much effort on the part of the investor to maintain. Index funds are also less risky than other investments, especially in the beginning stages of an individual’s investing career.
Q: How do we make money?
Traders make money in many ways. They can trade stocks, bonds, futures, and options on equities. They can go long when the market goes up and short when the market goes down.
Traders also use trading systems that are usually automated to manage the trades they make to maximize profit.
Trading is a risky investment and it’s not uncommon for traders to lose money. In order to keep losses small, many traders use the trading strategy based on minimizing risk in order to get the desired return.
Learn how fast you can make money in stocks.
Q: Why is Youtube Option Trading So Popular?
Video on how to trade options is very popular on Youtube. This is because of the high volume of interest on this topic.
For many people, learning options is an advanced strategy that takes more time and knowledge to learn.
This is my favorite youtube option trading channel as well as an overall investing strategy.
Additionally, traders are able to get a much higher return on motion trading versus going long or short on stocks.
Q: What is volume in stocks?
Volume is a measure of the number of shares traded in a given period, usually trading days.
This is an important metric if you plan to exit your trade to know there are enough buyers to buy your stock.
Q: How to invest in penny stocks for beginners?
Penny stocks are shares of a company that typically trade for less than $5 per share, which is also known as penny stock trading.
Investing in penny stocks can be a lot of fun and the highest risk, and there are many ways to get involved. For anyone who is new to the world of investing in penny stocks, it can be intimidating to know where to start.
However, there are a few things that you should keep in mind before diving into the world of penny stocks. One of these is researching what types of companies you want to invest in. Many of these penny stocks are not healthy companies and burning through cash.
It is important to always be careful when investing in penny stocks. Keep in mind that the risk of losing money is high and you should invest only what you are willing to lose.
Q: How to invest in stocks for beginners robinhood?
Robinhood is a stock brokerage company that allows users to invest in stocks without paying any fees. It also provides real-time quotes and charts. To invest, the user must have an account with Robinhood that holds at least $0.
Most major brokerage companies have zero commission fees on trading stocks as well.
Beware, Robinhood is known for stopping to trade various stocks during times of volatility whereas other’s brokers do not.
Q: What is a good price to buy at?
This is a hotly debated question as every investor sees the market from their view.
More often than not, people wonder the best time to buy stocks.
As such, you can read is now a good time to buy stocks?
Ready for Stock Market Investing?
If you are new to investing in stocks, there are a few things you take into consideration before diving into the market.
For starters, it is important to understand how stock markets work. You should also know the difference between a stock and an investment.
Investing in stocks can be a bit complicated, but this guide walked you through the basics of how to invest.
Before you invest in stocks, it is important that you understand your investment strategy. That way, you can make informed decisions about where to put your money and how much risk you are willing to take on.
Most people shy away from learning how to actively trade stocks because of the movies about Wall Street they have watched.
You will get a deeper understanding of investing in stocks the longer you educate yourself on the concept.
Overall, it is wise to diversify your portfolio and don’t put all your eggs in one basket.
So, what is your next move to start investing?
One of the best ways to improve your personal finance situation is to increase your income.
Here are the best investing courses to guide your path. With time and effort, you can start enjoying the lifestyle you want.
Learn how to supplement your daily, weekly, or monthly income with trading so that you can live your best life! This is a lifestyle trading style you need to learn.
Honestly, this course is a must for anyone who invests. You will lose more in the market than you will spend this quality education – guaranteed.
Read my Invest with Teri Review.
Photo Credit:
studentloanplannercourse.com
Learn how to reach a six figure net worth in 5 to 10 years, even if you have a massive amount of student loans.
This beginning investment course will help you pay off debt and start your path to six figures.
After taking a second job as a driver for Amazon to make ends meet, this former teacher pivoted to be a successful stock trader.
Leaving behind the stress of teaching, now he sets his own schedule and makes more money than he ever imagined. He grew his account from $500 to $38000 in 8 months.
Check out this interview.
Know someone else that needs this, too? Then, please share!!
Mortgage-backed securities prepayment speeds increased 22% month-to-month in May, but that was largely due to seasonality related to traditional spring buying activity, a Keefe, Bruyette & Woods report stated.
The conditional prepayment rate across all issuer types was 6.2 in May, versus 5.1 in April. For May 2022, the CPR was 9.9.
“However, prepayments still remain very low, and we expect speeds to remain low for the foreseeable future as purchase activity remains subdued and the majority of the mortgage market is still 300 basis points out of the money to refinance,” Bose George, a KBW analyst, wrote.
The latest Mortgage Bankers Association Weekly Application Survey put the 30-year conforming mortgage at 6.81%, the jumbo at 6.74% and loans insured by the Federal Housing Administration with an average rate of 6.73%. Those rates are keeping many existing homeowners from seeking a new residence as well as from refinancing.
A year ago, the conforming 30-year FRM averaged 5.4% but in 2021, it was 3.15%. “It would take a significant decline in rates (which we do not expect) for transaction volumes to increase meaningfully” for mortgage originators,” George said.
George estimated just 1% of the market is in the money to refi. If rates were to fall 300 basis points, it would make financial sense for 28% of current borrowers to refinance. At a 200 basis point decline that shrinks to 12% and at 100 basis points, just 4% would be in the money.
KBW remains positive on the six mortgage insurers “given that we expect credit to hold up better than current valuations (near/below book value) suggest,” George said. “While we are neutral on most mortgage originators, gain-on-sale margins appear to have bottomed, so we are becoming more constructive.”
The CPR for Fannie Mae bonds in May was 6.3, versus 5.2 in April and 9.8 one year ago. When it comes to Freddie Mac, the CPR last month was 6.1, compared with 5.0 in April and 9.3 for May 2022.
Over the same time frame, the Ginnie Mae CPR of 7.7 was up from 6.4 but down from 14.2.
Editor’s note: This is a recurring post, regularly updated with new information and offers.
Southwest Airlines is a favorite amongst many domestic U.S. flyers. The airline offers free checked bags, operates a ton of obscure routes and makes travel easier for families with complimentary priority boarding. Of course, the airline has its own points program, too: Rapid Rewards. You can use these points to book free flights (plus taxes) on any Southwest route with zero blackout dates. The airline also offers the Companion Pass, one of the most lucrative perks in the frequent flyer world.
But how do you earn Rapid Rewards points? Well, that’s what we’re going to answer in this article. We’ll dive deep into the program and show you all the different ways you can earn Southwest points by flying, using cobranded credit cards and leveraging your everyday purchases.
Earn points by flying Southwest
As you’d expect, you can earn Rapid Rewards points by flying on Southwest Airlines. The amount of points you earn per flight depends on three things: how much you paid for your ticket, the fare class you booked (Wanna Get Away, Wanna Get Away Plus, Anytime or Business Select) and your elite status.
Thankfully, determining how many points you’ll earn for each flight is easy. Here’s how much each Southwest Airlines booking class earns before tax:
Wanna Get Away: 6 points per dollar.
Wanna Get Away Plus: 8 points per dollar.
Anytime: 10 points per dollar.
Business Select: 12 points per dollar.
Additionally, Southwest A-List and A-List Preferred elite members earn extra points on their flights:
So, if you book a one-way Wanna Get Away flight from Chicago’s Midway International Airport (MDW) to New York City’s LaGuardia Airport (LGA) for $100 before taxes with no elite status, you’d earn 600 Rapid Rewards points. It’s important to note that distance is not a factor when earning Rapid Rewards points.
In other words, if you paid that same amount for a flight from MDW to St. Louis Lambert International Airport (STL) or one from Baltimore/Washington International Thurgood Marshall Airport (BWI) to Oakland International Airport (OAK) in California, you’d earn the same 600 points.
Southwest also makes it very clear how many points you’ll earn for each leg of your trip during the booking process. From the search results page, hover over the flight you’re considering and it will display the number of points you’ll earn:
Sign up for our daily newsletter
If you’re noticing that the math doesn’t add up based on the numbers above, you’re right. The base fare of this ticket is actually $127.80. When you multiply that by six (since it’s a Wanna Get Away fare), you get 766.8, which Southwest generously rounds up to 767 points.
At this time, Southwest does not have any partner airlines. This means that you can only earn Rapid Rewards points by flying on Southwest Airlines-operated flights.
Earn points with a Southwest credit card
Southwest Airlines has several cobranded credit cards you can use to earn Rapid Rewards points. The great thing about these cards is that the welcome bonuses, in addition to credit card spending, will count towards the Southwest Companion Pass.
Just keep in mind that these cards are subject to Chase’s 5/24 rule, meaning you likely won’t be approved if you’ve had five or more credit applications across any bank in the last 24 months. Here are the cards and their current bonuses:
Southwest Rapid Rewards Priority Credit Card: Earn 60,000 bonus points plus a 30% off promo code after spending $3,000 on purchases within the first three months of account opening.
Southwest Rapid Rewards Premier Credit Card: Earn 60,000 bonus points plus a 30% off promo code after spending $3,000 on purchases within the first three months of account opening.
Southwest Rapid Rewards Plus Credit Card: Earn 60,000 bonus points plus a 30% off promo code after spending $3,000 on purchases within the first three months of account opening.
Southwest Rapid Rewards Premier Business Credit Card: Earn 60,000 points when you spend $3,000 on purchases in the first three months of account opening.
Southwest Rapid Rewards Performance Business Credit Card: Earn 80,000 bonus points when you spend $5,000 on purchases in the first three months of account opening.
Related: The best Southwest Airlines credit cards
Transfer Southwest points from Chase Ultimate Rewards
Southwest has one credit card transfer partner: Chase Ultimate Rewards. You can transfer your Ultimate Rewards points to Rapid Rewards at a 1:1 ratio, which typically process instantly.
Whether you should execute these transfers, however, is a different story. TPG currently values Rapid Rewards points at 1.5 cents each, while Ultimate Rewards points are worth 2 cents apiece. As a result, if you transfer points to Southwest, you may sacrifice some value that could be put toward redemptions like top-tier Hyatt properties or Singapore Airlines business class.
If you want to give your Ultimate Rewards balance a boost for a Southwest transfer, here are some cards that offer nice sign-up bonuses at the moment:
Quick note:Chase Sapphire Reserve cardmembers can redeem their Ultimate Rewards points at 1.5 cents per point through the Chase travel portal to book flights. Meanwhile, Sapphire Preferred and Ink Business Preferred cardholders can redeem at 1.25 cents each. Unfortunately, Southwest Airlines itineraries are not bookable in this way since the portal is powered by Expedia and Southwest doesn’t sell its tickets through OTAs.
Related: From international business class to domestic hops: 6 of the best Chase Ultimate Rewards sweet spots
Transfer Southwest points from Marriott
You can also transfer hotel points from a variety of programs to Southwest Rapid Rewards. Most of these offer a relatively poor value proposition, but there is one exception to this rule: Marriott Bonvoy.
Marriott points transfer to Southwest Rapid Rewards at a 3:1 ratio. Plus, you’ll get a 5,000-point bonus when you transfer 60,000 Marriott points at a time. As a result, 60,000 Marriott points will get you 25,000 Southwest points, improving the effective transfer ratio to 2.4:1.
Related: The best Marriott credit cards
Earn Southwest points with partners
Beyond flying and using credit cards, you can earn Rapid Rewards points through many of your everyday purchases by filling out surveys and even by transferring points from other loyalty programs. Here are some additional ways to earn bonus Rapid Rewards points through Southwest’s assorted partners.
Rapid Rewards shopping portal
Southwest’s online shopping portal is a great way to earn points on online purchases. Just like Rapid Rewards dining, the points earned through Rapid Rewards Shopping are separate from the points earned with your credit card.
Just sign up for a Rapid Rewards Shopping account, find a participating merchant and click through the link before purchasing. You’ll automatically earn bonus points on your purchase just by starting at the portal instead of going to the merchant’s website directly.
Each merchant awards a different number of points per dollar spent and these rates frequently fluctuate, so check Rapid Rewards Shopping often. You may also come across promotions and other deals that may give you extra points, especially around the holidays.
However, bear in mind that Southwest isn’t the only airline with a shopping portal. You can easily compare earning rates with shopping portals by using an aggregator like CashBackMonitor.com. We recommend doing this to ensure you’re always getting the best return on your online purchases.
Related: TPG reader credit card question: Which credit card should I use in shopping portals?
Rapid Rewards Dining
Most airline loyalty programs have dining rewards initiatives and Southwest Rapid Rewards is no exception. Through Southwest Rapid Rewards Dining, you can earn extra miles at participating restaurants. To do this, all you have to do is sign up for an account and link your favorite credit card(s) that you use for restaurant purchases.
Whenever you swipe one of those cards at a participating restaurant, you’ll earn extra Rapid Rewards points. These come in addition to the miles you earn with your credit card, so make sure to use one of the best credit cards for dining for the best return on your purchases.
If you do utilize the Rapid Rewards Dining program, you’ll definitely want to sign up for email notifications. By enrolling in email notifications, you will earn 3 points per dollar spent at participating restaurants. If you opt out of receiving emails, your earning rate is cut to 1 point per two dollars spent. Additionally, Southwest members earn tiered bonuses:
New member: Earn 500 bonus points when you spend $25 at a participating restaurant and complete an online review within the first 30 days of joining.
First step: 500 bonus points after earning 1,500 points from dining and completing reviews (one time only).
Thank You: 300 bonus points after every 1,000 points accrued from dining and completing reviews (ongoing).
While privacy is important, agreeing to receive a few emails a week is a small price to pay for substantial bonus points, especially if you order takeout quite a bit or charge reimbursable dining expenses to your credit card.
Related: 12 restaurant loyalty programs that are worth joining
Southwest Rapid Rewards hotel booking site
Have a hotel stay coming up? Use Southwest’s hotel booking portal to earn extra points on each stay. The amount of points varies by the price of your stay. Generally, the more expensive a room is, the more points you’ll earn. Southwest states that rooms can earn up to a whopping 10,000 points per night. Usually, though, you’ll earn much less.
For example, I conducted a test search for a one-night stay at the Club Quarters Hotel Embarcadero in San Francisco. The room costs $260 for a night in August and awards 260 Rapid Rewards points per night. While this is certainly better than nothing, it’s a small number of miles.
You will, however, earn more points on “Southwest Airlines Points Plus properties” through the portal. The InterContinental Mark Hopkins San Francisco is one such hotel. This property costs $313 for a one-night stay in August, which yields 7,000 Rapid Rewards points. This is worth $105 based on TPG’s valuations — a much better return.
Note: You probably won’t earn traditional hotel points on these bookings, nor will you earn credits toward elite status qualification. Even if you already have elite status with the hotel in question, you may not enjoy the standard on-property perks since you booked through a third-party website. Thus, you’ll need to decide whether you value your hotel points and elite status benefits more than the bonus Rapid Rewards points you could earn.
Southwest also partners with several hotel programs, so travelers can earn Rapid Rewards points instead of hotel points.
Related: 6 reasons to avoid booking through an online travel agency
Earn points through rental car bookings
Southwest also partners with all the major rental car companies, allowing you to earn Rapid Rewards points. You can typically earn 600 Rapid Rewards points by booking your rental car through Southwest or requesting points at check-in. Some partners even allow you to request points on past bookings.
Earn points by taking surveys
Finally, you can earn Rapid Rewards points by filling out quick surveys through Rewards for Opinions and E-Rewards. Each survey earns a different amount of points and the length of the surveys vary, so this can be a good way to kill time while earning extra points. After you sign up and complete your first survey within three months, you’ll earn 500 bonus points. Just keep in mind that points can take up to six weeks to post to your account.
Related: Earn points and miles for completing surveys
Buy Southwest points
If you need Southwest points fast and transferring isn’t an option, buying Southwest points might be a worthwhile way to top up for a specific award. The standard rate — 3 cents per point — is more than twice TPG’s valuation. We don’t recommend buying at this price under most circumstances.
That said, the airline frequently runs promotions that offer better deals. For example, the airline is currently running a targeted promotion where you can buy points with up to a 50% discount through June 20, 2023. This brings the purchase rate down to 1.5 cents per point. That’s a perfect match for our valuation, which can make it worth it to top off your account for your next flight.
Related: Current buy points and miles promotions
Bottom line
Southwest Rapid Rewards points are easy to earn. In addition to earning points from flying, you can also earn them by allocating your everyday spending to the proper credit cards or by shopping and dining with select merchants. Using a combination of all of these methods may help you stockpile Rapid Rewards points quickly.
Additional reporting by Kyle Olsen and Christina Ly.
Wells Fargo’s outstanding commercial real estate loans were $154.7 billion (16% of total loans), with $35.7 billion in office loans at the end of March. Potential loan defaults and declining values of office properties have posed concerns for some lenders in recent months. Blackstone president Jonathan Gray emphasized the “unprecedented weakness” in older office buildings, … [Read more…]
With the start of summer upon us, now may be a great time to evaluate your credit card portfolio. Credit card sign-up bonuses and welcome offers are the quickest and easiest way to rake in lots of points and miles, so we regularly update the roundup of our favorite current offers in our best credit cards guide.
But to help you keep up with an ever-changing list of bonuses, we’ve also compiled a list of the best card offers currently available — especially the ones that are worth an extra look right now because they are at all-time highs or may end soon.
Since many issuers have restrictions on how often you can earn a bonus on a card, it’s important to time your application for when there’s a good offer. Also, higher bonuses don’t always stick around for long, so if you’re considering one of these offers, you’ll want to hop on it sooner rather than later.
Finally, if you’re not ready to jump on a higher-end card, consider these great starter cards or even one with a 0% introductory annual percentage rate (APR) offer.
The best credit card offers for June 2023
Card
Sign-up bonus/welcome offer
Welcome offer value*
Annual fee
The Business Platinum Card® from American Express
120,000 points after you spend $15,000 on eligible purchases with the card within the first three months of card membership.
$2,400.
$695 (see rates and fees).
Ink Business Preferred Credit Card
100,000 points after you spend $15,000 on eligible purchases with the card within the first three months of card membership.
$2,000.
$95.
The Platinum Card® from American Express
80,000 points after you spend $6,000 in the first six months, though you may be able to get a higher bonus through the CardMatch tool (terms apply).
$1,600.
$695 (see rates and fees).
American Express® Green Card
60,000 points after you spend $3,000 on purchases in their first six months of card membership. Also, get 20% back on eligible travel and transit purchases in your first six months to earn up to $200 back.
$1,400 ($1,200 in points plus up to $200 in cash back).
$150 (see rates and fees).
Capital One Venture X Rewards Credit Card
75,000 miles after you spend $4,000 on purchases in the first three months of account opening.
$1,388.
$395.
Capital One Venture Rewards Credit Card
75,000 miles after you spend $4,000 on purchases in the first three months of account opening.
$1,388.
$95.
Chase Sapphire Reserve
60,000 bonus points after you spend $4,000 on purchases in the first three months of account opening.
$1,200.
$550.
Chase Sapphire Preferred Card
60,000 bonus points after you spend $4,000 on purchases in the first three months of account opening.
$1,200.
$95.
American Express® Gold Card
60,000 points after you spend $4,000 in the first six months of card membership, though you may be able to get a higher bonus through the CardMatch tool (terms apply).
$1,200.
$250 (see rates and fees).
Southwest Rapid Rewards Plus Credit Card, Southwest Rapid Rewards Premier Credit Card, and Southwest Rapid Rewards Priority Credit Card
60,000 bonus points plus a 30% off promo code after spending $3,000 on purchases in the first three months from account opening.
$900.
$69 (Plus), $99 (Premier) and $149 (Priority).
United Club Infinite Card
80,000 bonus miles and 1,000 Premier qualifying points (PQP) after you spend $5,000 on purchases in the first three months from account opening. Offer ends Aug. 9.
$880.
$525.
IHG Rewards Premier Business Card
165,000 points after spending $3,000 on purchases in the first three months from account opening.
$825.
$99.
Hilton Honors American Express Surpass® Card
130,000 Hilton Honors bonus points and a free night reward after spending $2,000 in purchases on the card in the first three months of cardmembership. Offer ends July 19.
$780.
$95 (see rates and fees).
* Welcome offer value is determined using TPG valuations and is not provided by nor reviewed by the issuer.
The Business Platinum Card from American Express
This business card stands out not only for its 120,000-point welcome offer but thanks to added travel perks that can easily cover the card’s $695 annual fee (see rates and fees). Cardholders enjoy automatic Gold status in both the Hilton Honors and Marriott Bonvoy loyalty programs, along with access to a wide variety of airport lounges — including Amex Centurion, Priority Pass and Delta Sky Club (when traveling on same-day Delta flights). Enrollment is required for select benefits.
Cardholders also enjoy 5 points per dollar on flights and prepaid hotels booked at American Express Travel, along with 1.5 points per dollar on eligible purchases in select business categories and eligible purchases of $5,000 or more (on up to $2 million of these purchases per calendar year).
Related: Amex refreshes Business Platinum Card with new perks, higher annual fee and a 120,000-point bonus
On top of that, the card comes with up to $200 in annual airline fee statement credits and a 35% points rebate for flights booked through Amex Travel in first or business class on any airline (up to 1 million points back per calendar year), or in any class on the U.S. airline of your choice each year. Non-travel benefits include up to $400 in annual statement credits toward U.S. Dell purchases, up to $360 in credits toward Indeed, up to $150 toward select Adobe purchases and up to $120 toward wireless telephone services.
Sign up for our daily newsletter
Enrollment is required for select benefits.
Read our review of the American Express Business Platinum Card for more information.
Official application link: The Business Platinum Card® from American Expresswith 120,000 points after you spend $15,000 on eligible purchases with the card within the first three months of card membership.
Ink Business Preferred Credit Card
Then there’s the Ink Business Preferred. According to TPG’s valuations, this card’s welcome bonus alone is worth $2,000 since you can take advantage of Chase’s excellent collection of airline and hotel transfer partners. Points redeemed through the Chase travel portal are worth 1.25 cents each, which isn’t bad, either.
Another factor in this card’s favor? Its tremendous earning rates. You’ll earn 3 points per dollar across the following categories on up to $150,000 in combined purchases (1 point per dollar thereafter):
Travel.
Shipping purchases.
Internet, cable and phone services.
Advertising on social media sites and search engines.
Depending on which categories you spend in, you could earn a whopping 450,000 bonus points per year if you maxed out that $150,000 cap.
Among the Ink Business Preferred’s unsung benefits are cellphone protection, primary rental car coverage (when renting for business purposes) and other travel and purchase protections. You can also add employee cards to your account for free.
Read our full review of the Ink Business Preferred Credit Card for more information.
Official application link: Ink Business Preferred Credit Card with 100,000 bonus points after you spend $15,000 on eligible purchases with the card within the first three months of account opening.
The Platinum Card from American Express
Often referred to as the king of the premium travel rewards cards, the Amex Platinum offers a slew of benefits — along with a $695 annual fee (see rates and fees). Cardholders enjoy perks such as automatic Gold status with both Hilton Honors and Marriott Bonvoy plus access to a wide range of airport lounges, including Amex Centurion, Priority Pass and Delta Sky Club (on same-day Delta flights). On top of that, you’ll get up to $200 in annual airline fee statement credits, an up-to-$200 hotel statement credit to use toward prepaid Amex Fine Hotels + Resorts or The Hotel Collection bookings (the latter of which requires a minimum two-night stay) via Amex Travel, and an up-to-$189 Clear Plus membership statement credit — along with numerous other perks. Enrollment is required for select benefits.
Related: It’s a ‘lifestyle’ card now: A closer look at the Amex Platinum’s 6 new benefits
Non-travel benefits include an up-to-$240 digital entertainment statement credit (split into monthly $20 credits) for Audible, The New York Times, SiriusXM, Peacock, The Wall Street Journal and services under the Disney umbrella — including Disney+, ESPN+ and Hulu.
Cardholders also receive an up-to-$155 Walmart+ credit (subject to auto-renewal; Plus Ups are excluded), an up-to-$300 SoulCycle bike credit and an up-to-$300 Equinox statement credit for eligible Equinox memberships (now available as an annual benefit rather than monthly credits). You also receive Uber VIP status and up to $200 in annual Uber Cash (split into monthly $15 credits for U.S. rides and Uber Eats orders plus a $20 bonus in December).
Enrollment is required for select benefits.
Finally, cardholders will enjoy enhanced earning rates on many travel purchases:
5 points per dollar on flights booked directly with airlines or with Amex Travel (on up to $500,000 on these purchases per calendar year).
5 points per dollar on prepaid hotels booked with Amex Travel.
1 point per dollar on other eligible purchases.
And while the current welcome offer provides solid value, be sure to check the CardMatch Tool to see if you can receive an even higher one (offers are targeted and subject to change at any time).
Read our review of the American Express Platinum Card for more information.
Official application link: The Platinum Card® from American Express with 80,000 points after you spend $6,000 on purchases in the first six months of card membership.
The American Express Green Card
The American Express Green Card provides a compelling offering in the mid-tier travel category. With 3 points per dollar on broader travel, restaurants and transit as well as annual statement credits for Clear and LoungeBuddy that more than cover its annual fee, the Green from Amex is a card that modern travelers should consider.
The earning rates and benefits of the American Express Green Card will be most attractive to young professionals and millennials (or millennials at heart) who travel for work, pleasure or both. The card earns 3 Membership Rewards points per dollar on travel, restaurants and transit, so you’ll want to consider this card if a large chunk of your budget goes toward these categories.
The Amex Green also offers annual up to $189 Clear Plus and up to $100 LoungeBuddy statement credits that can more than offset the $150 annual fee (see rates and fees) while making your time in the airport more efficient and relaxing. If you can utilize these statement credits, the card can easily be a worthwhile addition to your purse or wallet.
Read our review of the Amex Green for more information.
Official application link: Amex Green with 60,000 Membership Rewards points after you spend $3,000 on purchases in your first six months of card membership. Also, get 20% back on eligible travel and transit purchases in your first six months to earn up to $200 back.
Capital One Venture X Rewards Credit Card
The Venture X card is Capital One’s premium rewards card and offers great earning rates and incredible perks.
Aside from a hefty welcome bonus of 75,000 miles after spending $4,000 on purchases in the first three months – worth about $1,388 according to our valuations thanks to Capital One’s excellent airline and hotel transfer partners – the card gives members up to $300 back in statement credits annually for bookings made through Capital One Travel and 10,000 bonus miles every account anniversary, starting on their first anniversary (worth $100 toward travel, or $185 by our valuations).
As for earning rates, the Venture X racks up 10 miles per dollar on hotels and car rentals booked via Capital One Travel, 5 miles per dollar on flights booked via Capital One Travel, and an unlimited 2 miles per dollar on everything else.
Frequent travelers will also enjoy taking advantage of access to Capital One’s developing network of airport lounges as well as the ability to enroll for Priority Pass membership for entry into more than 1,300 lounge locations worldwide (though this no longer includes participating restaurants). It also added the ability to access Plaza Premium lounges worldwide in 2022 and launched The Premier Collection in 2023, giving cardmembers on-property perks at a curated set of luxury hotels.
Read our review of the Capital One Venture X card for more information.
Official application link: Capital One Venture X Rewards Credit Card with 75,000 bonus miles after you spend $4,000 on purchases in the first three months from account opening.
Capital One Venture Rewards Credit Card
The Venture Rewards packs a pretty good punch for a mid-tier credit card. It earns a flat 2 miles per dollar spent on all purchases worldwide, but you can earn 5 miles per dollar on hotels and car rentals booked through Capital One Travel. The miles you earn with this card can be transferred to Capital One’s 17 airline and three hotel partners or redeemed through the Capital One Travel portal.
The card stands out for offering an application fee credit for Global Entry or TSA PreCheck every four years; many other cards that offer this benefit have annual fees of $400 or more. This TSA PreCheck/Global Entry application fee credit alone is worth up to $100. When making everyday purchases, you may also get Warranty Manager Service which can be used for extended warranty protection. The Venture Rewards card doesn’t impose foreign transaction fees, so you can use the card overseas without accumulating extra charges.
Read our review of the Capital One Venture Rewards Card for more information.
Official application link: Capital One Venture Rewards Credit Card with 75,000 bonus miles after you spend $4,000 on purchases in the first three months from account opening.
Chase Sapphire Reserve
This is one of the best premium credit cards available.
It earns a whopping 10 points per dollar on Lyft (through March 2025), Chase Dining booked through Ultimate Rewards, and hotel and car rental purchases through the Ultimate Rewards Travel portal. Cardholders also earn 5 points per dollar on airline travel booked through the Ultimate Rewards Travel portal, 3 points per dollar on travel (after using the $300 travel credit) and dining, and 1 point per dollar on everything else.
Chase defines travel and dining quite broadly, including everything from parking fees to Airbnb stays and food delivery orders. Perks of the card include a $300 annual travel credit, Priority Pass membership, a $5 monthly DoorDash in-app credit (through December 2024), a complimentary DashPass membership and an impressive array of travel protections.
Read our review of the Chase Sapphire Reserve for more information.
Official application link: Chase Sapphire Reserve with 60,000 points after you spend $4,000 on purchases in the first three months of card membership.
Chase Sapphire Preferred Card
If you can’t justify a high annual fee or want a solid card with an appealing set of perks, the Chase Sapphire Preferred is an ideal fit. It earns 5 points per dollar on all travel purchased through Chase Ultimate Rewards; 3 points per dollar on dining, including eligible delivery services, takeout and dining out; 3 points per dollar on select streaming services; 3 points per dollar on online grocery purchases (excluding Target, Walmart and wholesale clubs); 2 points per dollar on all other travel; and 1 point per dollar on all other purchases.
The points you earn with this card can be transferred to Chase’s airline and hotel partners or redeemed for 1.25 cents each through the Chase Ultimate Rewards portal. Benefits include a $50 annual credit on hotel stays purchased through Ultimate Rewards, at least 12 months of DashPass membership (when activated by Dec. 31, 2024), primary rental car coverage, up to $500 in trip delay reimbursement if you’re delayed more than 12 hours or overnight, up to $10,000 in trip cancellation and interruption insurance and up to $100 per day for up to five days in baggage delay reimbursement if your bag is delayed more than six hours.
Read our review of the Chase Sapphire Preferred for more information.
Official application link: Chase Sapphire Preferred with 60,000 points after you spend $4,000 on purchases in the first three months from account opening.
American Express® Gold Card
The Amex Gold card is a favorite of many TPG staffers thanks (in large part) to its terrific earning rates:
4 points per dollar on dining at restaurants (including takeout and delivery in the U.S.)
4 points per dollar at U.S. supermarkets on up to $25,000 in purchases per calendar year (1 point per dollar after that).
3 points per dollar on flights booked directly with airlines or through Amex Travel.
1 point per dollar on all other eligible purchases.
The card also offers up to $120 in annual credit for Uber rides and Uber Eats purchases and up to $120 in statement credits for select dining purchases (enrollment is required for select benefits) — all for a manageable annual fee of $250 (see rates and fees)
And while it’s not providing a limited-time bonus for new cardmembers, you can often find elevated welcome offers through the CardMatch tool. The card currently features a public welcome offer of 60,000 points after you spend $4,000 on eligible purchases within the first six months of card membership. However, some new customers can earn a 75,000-point or even 90,000-point welcome offer via the CardMatch tool after meeting the same minimum spending requirements. Note that these elevated offers are targeted and subject to change at any time.
Alternatively, you can refer a friend through the Amex referral program — and when your friend applies for a new account by June 7, you can earn an additional +5 rewards per dollar (as either points or cash back, depending on the card) on eligible U.S. supermarket purchases for three months after they’re approved (starting from the first date the referred friend’s account is opened), on up to $25,000.
Additionally, new applicants for the Amex Gold through a referral link will be eligible for an up to $200 statement credit after reaching minimum spending requirements, on top of that card’s usual welcome offer.
Read our review of the American Express Gold Card for more information.
Official application link: American Express® Gold Card with 60,000 points after you spend $4,000 in the first six months of card membership.
Southwest personal cards
All three personal of Southwest’s personal credit cards — the Rapid Rewards Plus, Rapid Rewards Premier and Rapid Rewards Priority — are currently sporting identical welcome offers: 60,000 bonus points plus a 30% off promo code after spending $3,000 on purchases in the first three months from account opening. This is the first time Southwest has offered a promo code as part of a sign-up bonus on a credit card.
The code will appear directly in your Southwest.com account within eight weeks of meeting the spending requirement. It can be used — only once — on a single one-way or round-trip Wanna Get Away, Wanna Get Away Plus, Anytime and Business Select fare, and is available for use until October 31, 2024.
Given it is a single-use promo code, it would be best to save this for a more expensive ticket. You’ll get the biggest savings when using the code for round-trip travel and/or during peak travel periods like the summer or the holidays.
Read more about the three cards and this limited-time offer.
Official application link: Southwest Rapid Rewards Plus
Official application link: Southwest Rapid Rewards Premier
Official application link: Southwest Rapid Rewards Priority
United Club Infinite Card
The United Club Infinite Card is the ideal card for United lounge access — bar none.
The United Club Infinite Card’s $525 annual fee sounds high until you factor in the United Club membership included with the card. Membership normally costs $650 per year for non-elite members.
In addition, one of the primary disadvantages of many airline credit cards is a low return on spending, even on branded purchases, as most airline cards only offer 2 or 3 points per dollar on airline purchases. But the United Club Infinite Card sets a new standard with an impressive 4 points per dollar on United purchases.
If you spend thousands of dollars on United flights each year, the United Club Infinite Card is worth considering.
Read our review of the United Club Infinite for more information.
Official application link: United Club Infinite with 80,000 bonus miles and 1,000 Premier qualifying points (PQP) after you spend $5,000 on purchases in the first three months from account opening. Offer ends Aug. 9.
IHG Rewards Premier Business Card
New applicants for the IHG Rewards Premier Business card can earn 165,000 bonus points after spending $3,000 on purchases within three months from account opening.
Your bonus will come in the form of IHG points, which TPG values at half a cent each. Thus, this bonus is worth $825.
Generally speaking, you won’t get fantastic earning rates on most hotel credit cards — especially on broad categories like dining and groceries. That said, the IHG Premier Business card could be a solid option, especially at participating IHG properties.
When you use your card at IHG hotels and resorts, you’ll earn 10 points per dollar spent on your stay. This is in addition to the 10 base points that all IHG One Rewards members accrue at most participating brands. And since you have automatic Platinum Elite status with the card, that’ll give you another 60% bonus on top of the base points. When combined, that translates to a total of 26 points per dollar spent on most IHG stays — or a 13% return on spending, based on TPG’s valuations.
Beyond IHG purchases, cardholders of the IHG Premier Business will earn points at the following rates:
5 points per dollar spent on travel, dining and gas purchases.
5 points per dollar in select business categories, such as social media and search engine advertising and at office supply stores.
3 points per dollar spent on all other purchases.
You’ll also receive a free night certificate (worth up to 40,000 points) every year when you renew your card and enjoy your fourth night free on award stays of four nights (or longer)
Read our full review of the IHG Rewards Premier Business for more information.
Official application link: IHG Rewards Premier Business card with 165,000 bonus points after spending $3,000 on purchases within three months from account opening.
Hilton Honors American Express Surpass® Card
The Hilton Honors American Express Surpass® Card provides solid earnings at Hilton properties and automatic Hilton Gold elite status, which offers complimentary breakfast, increased earnings and space-available upgrades when you stay at Hilton properties.
Hilton Honors Gold status is one of the best mid-tier hotel loyalty statuses you can obtain. As a Hilton Gold elite member, you’ll get complimentary breakfast, space-available room upgrades and improved earnings when staying at Hilton brands. Luckily, you can easily earn and maintain Hilton Gold status since it is an automatic perk of the Hilton Honors American Express Surpass Card.
The Hilton Surpass card is an ideal choice for those who stay at Hilton properties often and want a cobranded credit card with a modest annual fee and valuable perks.
Read our full review of the Hilton Surpass for more information.
Official application link: Hilton Surpass with 130,000 bonus points and a free night reward after spending $2,000 in purchases on the card in the first three months of cardmembership. Offer ends July 19.
*Bonus offer value is based on TPG valuations and not provided by issuers.
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
For rates and fees of the Amex Platinum card, click here. For rates and fees of the Amex Business Platinum card, click here. For rates and fees of the Amex Gold card, click here.
For rates and fees of the Amex Green card, click here.
For rates and fees of the Hilton Honors Amex Surpass, click here.
Additional reporting by Ryan Wilcox and Eric Rosen.
Great deal: Get up to $400 worth of Amex points for spending $1,000 with Air France-KLM
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Sign up for our daily newsletter
Editor’s note: This is a recurring post, regularly updated with new information and offers.
American Express and Air France-KLM are partnering to offer targeted cardholders a great Amex Offer. There are two versions of the offer: if you’re targeted, you can get a $200 statement credit or 20,000 Membership Rewards points for spending $1,000 or more with Air France or KLM.
If you have one of these offers, you must add it to your card and spend a minimum of $1,000 in one or more eligible transactions directly with the respective carrier. According to the terms and conditions, you must make the purchase through the US version of the airline website and your flight must originate in the US.
If you have the 20,000 Membership Reward offer, it’s worth a higher $400, according to TPG valuations.
With either offer, you’ll also earn bonus points per dollar spent on the airfare — 5 points per dollar if you book directly with airlines or through American Express Travel, on up to $500,000 on these purchases per calendar year with The Platinum Card® from American Express.
Keep in mind that this offer expires on July 30.
If you prefer to use your points on an Air France or KLM flight, you can fly to Europe for as few as 11,250 miles one-way.
Additional reporting by Emily Thompson.
Featured image by DARREN MURPH/THE POINTS GUY
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Update: Some offers mentioned below are no longer available. View the current offers here.
If you’re looking for a way to both support the LGBTQIA+ community and earn some frequent flyer miles, there’s a good opportunity from United Airlines you won’t want to miss.
During the month of June, United MileagePlus is offering 5 miles per dollar donated to three LGBTQIA+ charities. The offer is valid for donations of up to $1,000 per United card made to the following charities:
The Trevor Project, which is the world’s largest suicide prevention and crisis intervention organization for those who identify as LGBTQIA+.
The Human Rights Campaign, the largest LGBTQIA+ advocacy group and lobbying organization in the U.S.
StartOut, a nonprofit organization that focuses on the growth of the LGBTQIA+ community in the workforce.
While you would only earn $12.10 worth of miles for every $1,000 donation, according to our latest valuations, you can take pride in the fact that you helped the efforts of a noteworthy cause.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
To take advantage of this promotion, you’ll first need to make sure you are the primary cardholder of one of these United credit cards:
Sign up for our daily newsletter
United Gateway Card.
United Explorer Card.
United Quest Card.
United Club Infinite Card.
United Business Card.
United Club Business Card.
Click through to your selected charity on this page (note that donations to local chapters of these organizations may not be eligible), then select how much you wish to donate.
Keep in mind that this United MileagePlus offer is applicable for donations totaling no more than $1,000 per card. No registration is required to benefit from this promotion. To receive your miles, all you have to do is make your donation with your chosen United credit card by June 30, 2022. The bonus miles may take up to eight weeks to post to your account.
Full terms and conditions for the promotion are available here.
If you have more than one of the cards listed above, you can max out the promotion on each card. For example, you can make a $1,000 donation with your United Club Infinite Card and another $1,000 donation with your United Business Card to receive 5,000 miles per donation, or a total of 10,000 miles.
Related: Happy Pride! Here’s all we’re doing at The Points Guy to celebrate Pride Month