Money Management

Data shows that home prices might decline notably during the second half of 2023. Read on to learn more. 

For months on end, prospective home buyers have been struggling due to a combination of factors, including elevated home prices and higher mortgage rates. The latter might, unfortunately, be here to stay for a while. But home prices could drop during the second half of 2023, and that’s something buyers may want to gear up for.

Could home prices take a fall?

Vanguard expects U.S. home prices to decline 5% during the second half of the year. And that’s not a small drop.

We don’t know how expensive it will be to take out a mortgage loan during the second half of 2023. But if borrowing rates dip a small amount at the same time home prices decline, buyers might find themselves in a stronger position to make an offer than they’ve been in for a while. And that’s something worth taking advantage of.

Of course, a big wild card factor for home prices will be inventory. The housing market has sorely lacked supply for several years on a national scale, and there’s really no reason to assume that inventory will pick up tremendously during the second half of the year.

In spite of this, Vanguard seems pretty convinced that home prices are poised to dip. And while that’s not ideal for sellers, it’s great news for anyone looking to buy.

How to get ready to buy a home

While home prices might fall during the latter part of 2023, that doesn’t mean they’re going to plunge. So you’ll still most likely need a sizable down payment to pull off a home purchase. Try boosting your savings account balance now so you have the funds available to put down should a buying opportunity present itself. And if you’re getting a tax refund, it could pay to allocate that money for home-buying purposes.

At the same time, take a look at your credit score. If it’s not in the upper 700s or higher, try your best to give it a boost. The higher your score is, the more competitive an interest rate you’re likely to snag on a mortgage once you apply.

You can boost your credit score by paying all bills on time and knocking out a chunk of credit card debt. Checking your credit report for errors is a smart move, too. If your credit report contains a mistake, you’ll have a chance to get it corrected so it doesn’t hurt your chances of locking in a more affordable mortgage later this year.

While we can’t say with certainty that home prices are going to fall in a few months’ time, it’s encouraging to see that one financial company expects that to happen. If you’ve been waiting for an opportunity to buy, now’s the time to grow your savings and raise your credit score to put yourself in the best position to pounce.

Also, make a priority list of the qualities and features you want in a home. Even if home prices fall in the near term, you’re likely to have limited options. So it’s important to know what home features are and aren’t a must have.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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It’s important to make sure you’re buying a home in the right area. Read on to see how to get that information. 

Some people grow up in certain neighborhoods and decide to live there as adults because they like the idea of being familiar with their surroundings and knowing what to expect. But that may not be feasible for you. It certainly wasn’t feasible for me.

I grew up in Brooklyn, New York. When my parents bought the house I lived in as a child, I’m pretty sure they spent less than $100,000 to buy it. These days, their home is worth exponentially more than that because property values in Brooklyn have appreciated tremendously through the years, to the point where the median sale price of a Brooklyn home was recently $900,000, as per Redfin.

Because I knew that buying a home in Brooklyn as an adult wouldn’t be feasible — partly because I couldn’t swing such a high mortgage payment and partly because I needed more space — I moved to a suburban area instead. And I know many people who similarly did not end up living in the neighborhoods or towns they grew up in due to affordability issues.

But if you’re going to take a chance on a new neighborhood, it’s important to do your research. And that doesn’t just mean reading statistics online.

It’s important to talk to your would-be neighbors

There are different sites that allow you to pull up important information about a neighborhood you’re thinking of buying in. You can use Zillow, for example, to track home values, and you can use Niche to get school district ratings, which may be very important to you if you have kids.

But those numbers won’t tell you the whole story. And they also won’t necessarily tell you how pleasant — or unpleasant — your life will be if you move to a given neighborhood. That’s why a better idea is to talk to the people who would conceivably be your new neighbors and get the inside scoop.

In my town, for example, the schools are highly rated, and that’s something parents looking to buy here might appreciate. But what most parents don’t realize is that our town offers very little in the way of bus transport, so getting children to and from school can be a hassle. Plus, there’s also a glaring lack of parking. My children and I actually walk over a mile to school every morning partly for the exercise, but partly to avoid the hassle of dealing with limited parking and ridiculous traffic.

The issues with bussing and parking, however, are ones you generally won’t know about unless you talk to people from my town. And that’s why it’s important to have those conversations before trying to buy in that area. That way, you know what you’re signing up for.

It’s not just a matter of money

It’s important to buy a home in a neighborhood that works for you financially. In my case, since the neighborhood I grew up in was out of reach, I had to pivot. But it’s also essential to find a neighborhood that lends to a nice quality of life.

I’m not saying I live a miserable existence because of the transportation situation at our schools. But had I known that before moving here, would I maybe have considered a different town? It’s possible.

That’s why your best bet is to talk to actual people who live in the neighborhood you might want to buy in. Walk around and stop people on the streets who seem approachable. Or go online, see if there’s a neighborhood Facebook group you can join, and introduce yourself as someone who’s looking for information as a prospective buyer.

Any given neighborhood is apt to have its pros and cons. But it’s important to know what those are before committing to living there.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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Amazon Pet Day is May 2 and 3. Keep reading to see the best pet must-haves you can save on during this sale. 

When it comes to buying pet supplies, you have options. You likely have both independent and big-box pet supply shops in your town, and you can lean on Chewy’s delivery service. Your grocery store may even have an aisle of pet food and other supplies.

But for convenience and selection, you might turn to Amazon, especially if you have a Prime membership. I share my home with three cats, and I frequently buy food, toys, and other items for them from Amazon. If you also often turn to Amazon for pet supplies, you might consider setting up a pet profile for your four-legged friend.

This is a great week to be a pet owner, because today and tomorrow (May 2 and 3) are when Amazon is holding its Pet Day sale! This 48-hour sale runs from 12 a.m. PDT on May 2 to 11:59 p.m. PDT on May 3, and you don’t even have to be a Prime member to save on gear for your pets. Non-Prime members can get fast free shipping on orders of $25 or more (on items sold by Amazon). Here are some of the best deals we found on offer for Amazon Pet Day.

1. A rechargeable laser toy for 58% off

In my experience, some cats are absolutely wild about chasing (and failing to capture) the dreaded red dot! If you have a tiny hunter in your midst, check out the Valonii Rechargeable Motion Activated Cat Laser Toy. It has a built-in motion sensor that triggers the laser light to appear when your cat is nearby. It also has two operating speeds and the battery is rechargeable. It’s on sale for $16.99, a savings of 58%.

2. A set of foldable pet steps for 29% off

If your dog or cat is getting up in years and has trouble hopping on the bed or couch to hang out with you, a set of pet steps might be just the ticket — and if they fold for easy storage, that’s all the better. For Pet Day, Amazon has the Best Pet Supplies Foldable Foam Pet Steps in gray linen for just $63.83, which saves you 29% off the list price.

3. A pet water fountain for 49% off

Handwashing in my bathroom is sometimes a tricky proposition, because my oldest cat is often there trying to drink from the sink. The solution? Check out the Wonder Creature Cat Water Fountain, currently on sale for almost half off its list price ($17.99, down from $34.99). In addition to keeping your credit card tab low, this fountain will keep your pet drinking, meaning less risk of kidney and urinary tract problems.

4. An automatic feeder for 42% off

If you work away from home, or hate getting up early in the morning, it might be hard to keep up with a regular feeding schedule for your dog or cat. Might I recommend an automatic feeder? Right now, Amazon has the VOLUAS Automatic Pet Feeder (in the four liter size) for $46.74, which is 42% off from its $79.99 list price. You can schedule this feeder to dispense up to four meals a day!

5. An aquarium gravel cleaner for 23% off

If you have fish and other aquatic pets, it’s likely that your tank is your pride and joy — and you want to keep it clean for your little finned friends. Right now, you can score the AKKEE Electric Aquarium Gravel Cleaner for $53.99, a savings of 23%. This tool can help you do a water change, clean the substrate at the bottom of your tank, and even clean the algae from your tank walls.

6. Pet nail clippers for 15% off

It’s easy to tell when my cats need their nails trimmed, as they start getting stuck on the upholstery around my home. Whether you’ve got dogs or cats (or any other furry creature with claws!), it’s a good idea to keep on top of those nail trims. Check out gonicc Dog & Cat Pets Nail Clippers and Trimmers, which are going for $12.70 right now. These have a safety blade that can help prevent accidentally cutting your pet’s nails too short, and they can be locked for safety when not in use.

7. A cozy pet bed for 25% off

Even if your dog or cat sleeps on your bed at night, it’s still nice to give them a bed of their very own to relax in as they please. You can pick up a medium-sized Bedsure Calming Dog Bed in camel for just $37.39 this week, down from the list price of $49.99. These beds are soft and fluffy, and can even be machine washed, which means you won’t be draining your checking account to buy a new one the first time it inevitably gets dirty.

Amazon can be a great place to score pet supplies, and especially during the Amazon Pet Day sales event. Hop on over for a look at the above deals and more, before it all ends!

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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Building an investment portfolio? Read on to see how to go about it. 

Whether you’re buying stocks for your IRA, brokerage account, or both, it’s important to assemble a nice diverse mix of them. A diversified portfolio could help protect you during periods of market volatility. And it could also help you grow a lot of wealth over time.

But one mistake many investors make when buying stocks is loading up on too many of them. And that’s a trap you don’t want to fall into.

The problem with owning too many stocks

It’s definitely a good idea to aim for a broad mix of stocks in your investment portfolio. But there may come a point when you’ve taken that concept to too much of an extreme.

If you own too many individual stocks, you might struggle to keep tabs on them. And that could mean hanging onto a stock that consistently underperforms, thereby losing money.You might also end up with a portfolio that isn’t as diverse as you think it is if you buy too many stocks.

Let’s say you own shares of 80 different companies. The value of your shares can fluctuate over time so that if, say, you started out with 15% of your portfolio in energy stocks, you might end up with 35% of it in energy stocks down the line. That’s not necessarily what you want. But if you have so many stocks and share prices to track, you might struggle to strike a better balance.

How many stocks should you own?

If you’re thinking that an ideal stock portfolio is one that contains several hundred stocks, you’d generally be wrong. There are no hard and fast rules when it comes to the specific number of stocks you should own, but the Motley Fool says that the average diversified portfolio holds between 20 and 30 stocks, and the Motley Fool’s official recommendation is to own at least 25 different stocks.

As such, you may decide you want to own 32 stocks, or 35, and that’s okay. The key is to limit yourself to a number of stocks that you can reasonably manage.

You can potentially keep tabs on 30 different companies, give or take. But continuously tracking the performance of 100 different companies may be beyond your capabilities.

If you’re worried that owning fewer stocks will leave you with a portfolio that’s less diverse, you can always load up on some broad market ETFs, or exchange-traded funds, instead. With ETFs, you can take a bit more of a hands-off approach as an investor. And because ETFs offer built-in diversification, they’re a good bet for building a portfolio that’s conducive to growing wealth.

Finally, if your goal is to make money in the stock market, be sure to focus on the quality of the stocks you’re buying, not the quantity. You’re better off owning shares of 20 great companies than shares of 30 companies that are just mediocre. And you definitely shouldn’t invest in new companies without doing your research first for the express purpose of diversifying, because that might set you back more than help you achieve your financial goals.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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More banks and credit card companies are starting to adopt artificial intelligence (AI). Read on to learn how it will impact both consumers and financial institutions. 

Credit cards have been a staple of personal finance for decades. Currently, there are close to 600 million credit card accounts in the U.S. However, as technology continues to advance, we are starting to see the rise of artificial intelligence (AI) in the credit card industry. AI is an exciting development that will have a significant impact on both consumers and financial institutions. AI is the umbrella term for any computer program that can think or behave like a human being. This technology will impact credit cards to make accurate predictions and decisions based on data analysis, such as spending habits, demographics, and more. Here are five ways in which AI will affect credit cards in particular.

1. Personalized offers, promotions, and maximizing rewards

With the use of AI, credit card companies will be able to analyze consumers’ spending habits and provide personalized offers and promotions. This will ultimately increase customer satisfaction and loyalty. For example, if the AI system discovers that a user frequently spends money on travel, it can provide offers for discounted airfare and hotel stays.

Another example is MaxRewards, an app that helps you manage all of your credit card points and miles. It can also help you maximize credit card rewards. One of MaxRewards’ key features is recommending the best credit card to use at nearby merchants so you can earn the most rewards on purchases. You can quickly see the best credit card to use for each spending category and see all the offers you qualify for. Credit cards often offer bonus rewards and deals that you may not know about, but the app automatically activates them for you so you can earn more rewards.

2. Fraud detection

As more people shop online, credit card fraud is expected to hit over $400 billion over the next decade! AI systems can analyze millions of transactions at an incredibly fast pace, allowing banks and credit card companies to detect fraudulent activities quickly. This will help to reduce the number of fraudulent transactions and protect consumers from identity theft. Additionally, AI can learn from consumer behavior patterns and detect deviations, flagging any suspicious activity automatically.

By analyzing past data points related to fraudulent activities, AI algorithms can be trained to recognize certain patterns that could indicate future attempts at fraud before they occur. This means that financial institutions can be alerted about potentially fraudulent activity much faster than if they had relied on manual methods. This helps ensure that any potentially fraudulent activities are detected early on, before they have a chance to cause serious losses or damage.

3. More accurate credit scoring

AI has the potential to revolutionize how credit scores are calculated. AI can identify patterns and trends that may not be obvious to human analysts. For example, AI can detect subtle changes in a person’s financial behavior over time and predict how those changes may affect their creditworthiness in the future. This information can be used to provide personalized recommendations to improve credit scores, such as paying off certain debts or establishing a track record of timely payments.

Additionally, AI can help lenders make more informed decisions by providing them with a more accurate picture of a person’s credit score. AI also has the potential to help individuals who are starting out with no or limited credit history. Lenders can use alternative data, such as their employment history and online behavior, to determine whether to extend a loan or credit card offer. AI can also monitor borrower behavior and provide personalized financial advice to help them build credit and improve their overall financial health.

4. Customer service

AI-powered customer service chatbots are already in use and are quickly becoming more advanced. This will provide a more streamlined and efficient experience for customers who have issues or questions with their credit cards. AI-driven chatbots can learn from earlier interactions and continually improve their responses.

Banking has shifted from in-person at branches to digital banking online as chatbots have become one of the most widely adopted technologies. In 2019, only 2% of banks and 3% of credit unions in America deployed chatbots. Going into 2023, that number has increased tenfold, with 18% of banks and 30% of credit unions adopting it and an additional 25% of credit unions planning to do the same in 2023. By 2030, experts state that customers won’t be able to tell if they are interacting with a bot or a human!

5. Predictive analytics

With its ability to analyze large data sets, AI can provide insights into consumer behavior patterns. This information can be used by credit card companies to predict which products and services could be successful in the market, allowing them to stay ahead of the competition. Every year, Americans pay $120 billion in credit card interest and fees, adding to nearly $1 trillion in total credit card debt.

It is important for Americans to be able to accurately compare and find the best credit cards for their needs. AI can now quickly compare features like annual fees, rewards programs, and interest rates in order to help a consumer find the perfect fit for their personal finances.

AI is still in its infancy when it comes to its full potential, but we can already see a considerable impact in the credit card industry. With its ability to detect fraud, offer personalized promotions, and streamline customer service, AI is shaping up to be a game changer for the financial sector. With time, AI will continue to impact the credit card industry, helping both banks and credit card holders.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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A large nest egg is a good thing. But is it enough? Read on to see why it’s important to have cash on hand in retirement. 

There’s no such thing as a magic retirement savings figure that will guarantee you long-term financial security. But many people think that if they manage to save $1 million for retirement, they’ll be all set.

Now, the reality is that the amount of money you’ll need as a retiree will hinge on factors such as where you live and how you choose to spend your time. Your health will also play a role. But it’s pretty fair to say that people who retire with $1 million are at least in decent financial shape.

If you’re retired with $1 million in savings, you may be wondering if it’s important to have an emergency fund on top of that. After all, you’re not working, so it’s not like you need to replace income. And you clearly have a lot of reserves to tap for an unplanned bill, whether it’s a home repair or needing to buy a new car.

But having a $1 million nest egg doesn’t necessarily mean you don’t need a separate emergency fund. Rather, you’ll need to think about what your nest egg consists of.

How’s your $1 million spread out?

When we talk about a retirement nest egg, we’re not necessarily referring to a single account, like an IRA or 401(k). For some people, the term nest egg might refer to the sum total of their various accounts.

But let’s assume you have $1 million in a single retirement plan. If you have a portion of that money — say, enough to cover about a year’s worth of bills — in cash, then that could serve as your emergency fund.

However, if your entire $1 million is invested in assets like stocks and bonds whose value can fluctuate, then you may want to stick some cash in a savings account. That way, you’ll have some money whose value can’t change on a whim.

You may be hesitant to keep too much money in cash as a retiree because if you continue to invest your nest egg, it might continue to grow during your retirement, thereby giving you access to more money. But it’s also important to have money you can pull out at a moment’s notice for an unplanned expense. And you don’t want that money to come in the form of a stock or ETF, because if its value is down when you need to take a withdrawal, you’ll lock in a loss.

Make sure you’re covered

Fidelity reported that in 2022, almost 300,000 of its 401(k) accounts had at least $1 million in them. But that doesn’t mean savers in that boat are totally set as far as their emergency funds go.

It’s a good idea to have about a year’s worth of cash in an emergency fund so that if your portfolio takes a huge dive, you can wait things out without having to instantly lock in a loss. You may have some cash sitting in your IRA or 401(k). But if not, you’ll want to make a point to put some in the bank.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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