FedEx (FDX) stock is spiraling Friday after the logistics giant missed top- and bottom-line expectations for its fiscal first quarter and revised its full-year outlook.

In the quarter ended August 31, FedEx's revenue decreased 0.5% year-over-year to $21.6 billion and its earnings per share (EPS) plunged 20.9% from the year-ago period to $3.60.

In a statement, FedEx CEO Raj Subramaniam called the quarter "challenging." However, he added that the company remained "focused on transforming our network, improving our efficiency, lowering our cost-to-serve, and enhancing our ability to adapt with speed to evolving market dynamics." 

Subramaniam says he is "confident in the value-creation opportunities ahead as we focus on reducing our structural cost, growing revenue profitably, and leveraging the insights from our vast collection of data as we continue to build the world's most flexible, efficient, and intelligent network."

FedEx's results fell short of analysts' expectations. Wall Street was anticipating revenue of $21.9 billion and earnings of $4.76 per share, according to CNBC.

As a result of this disappointing start to the year, FedEx revised its full-year outlook. The company now anticipates low single-digit revenue growth and earnings per share in the range of $20 to $21. It had previously forecasted low to mid-single-digit revenue growth and EPS in the range of $20 to $22.

"Our revised outlook reflects our continued confidence in the execution of our DRIVE [cost-cutting] initiatives and the effects of our recent pricing actions, which we expect to help offset weaker-than-expected demand trends," said FedEx Chief Financial Officer John Dietrich in a statement.

Is FedEx stock a buy, sell or hold?

It's been a volatile year for FedEx on the price charts and Friday's decline nearly erases the industrial stock's year-to-date gain. Still, Wall Street has remained bullish toward FDX. 

According to S&P Global Market Intelligence, the average analyst target price for FDX stock is $310.77, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy. However, analysts are downwardly revise their price targets and ratings and may cut their ratings following the disappointing quarter.

Financial services firm Stifel is one of those that lowered its price rating on FedEx after earnings, to $321 from $327, while maintaining its Buy rating on the large-cap stock.

"Secular macroeconomic tailwinds are waning for FedEx, or are at least on pause for now, especially as trends like e-commerce penetration of total retail reset lower vs where they were at the height of the pandemic," says Stifel analyst Bruce Chan. "We believe there is still long-term opportunity for FedEx once secular trends resume their glide path post-COVID, and in a more mature and more disciplined global oligopoly, FedEx should be well-positioned to benefit."

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FedEx (FDX) is one of the more noteworthy names on this week's earnings calendar and for good reason it seems. The stock jumped more than 11% out of the gate Wednesday after the logistics giant beat top- and bottom-line expectations for its fiscal fourth quarter and issued an inline outlook for its fiscal 2025.

In the quarter ended May 31, FedEx's said its revenue increased 0.9% from the year prior to $22.1 billion and its operating margin improved 40 basis points to 8.5%. (A basis point = 0.01%.) The company also reported a 9.5% year-over-year increase in its earnings per share (EPS) to $5.41.

"We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin in a challenging revenue environment," FedEx CEO Raj Subramaniam said in a statement. 

Subramaniam added that the results reflect the continued execution of the company's DRIVE cost-cutting initiatives. "We expect this momentum to continue in fiscal 2025 as we advance our efforts to create the world's most flexible, efficient, and intelligent network," the executive said.

FedEx's top- and bottom-line results came in ahead of analysts' expectations. According to Yahoo Finance, Wall Street was anticipating revenue of $22.07 billion and earnings of $5.35 per share.

FDX also provided its outlook on fiscal 2025, calling for low-to-mid single-digit percentage revenue growth from the prior year and earnings in the range of $20 to $22 per share. This satisfied analysts' expectations for revenue growth of 3.1% and earnings of $20.91 per share.

Is FedEx stock a buy, sell or hold?

Wall Street is bullish towards the industrial stock. According to S&P Global Market Intelligence, the average analyst target price for FDX stock is $312.87, representing implied upside of roughly 7% to current levels. Additionally, the consensus recommendation is Buy.

Financial service firm Stifel is one of the more bullish outfits on FDX stock with a Buy rating and an updated price target of $327, increased from its previous target of $303.

"FedEx has been powering through a bold and transformative cost savings program in DRIVE, and network consolidation in Network 2.0," Stifel said in a note this morning. "There's a lot of good stuff happening at FedEx right now, in our view, and provided management can stay on track, we continue to like the opportunity here."

The $327 price target represents implied upside of nearly 12% to current levels.

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No matter the job market, unions facilitate bargaining on behalf of their members. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Labor unions are flexing their muscles in a way they haven’t done in years. In negotiations over pay and benefits, labor leaders aren’t being shy about their demands. They know they have leverage in many industries where workers are scarce, and they feel that this is the year to bargain hard.

Some early wage talks have set the tone: The Teamsters’ tentative deal with UPS, which will avert a crippling strike, if the members of the union vote to take the deal, as we expect. Workers are in line for $7.50/hour more in pay, which will be phased in over the multiyear contract.

Then there’s United Airlines’ pilots’ union, which scored up to a 40% pay hike in their new deal with the airline earlier this summer. FedEx pilots recently rejected a rise of up to 30%, after seeing that. American Airlines has upped its offer to its pilots by $1 billion as it seeks to match what UA agreed to. Southwest’s pilot union is also threatening to strike. 

Any pilot strike isn’t imminent. Federal law requires long talks before pilots actually walk off and cause major travel and shipping disruptions. But most airlines will have little choice but to sweeten pay substantially.

The biggest contract up for negotiation next is the Detroit autoworkers’ deal. The United Auto Workers union is in talks with GM, Ford and Stellantis, the parent of Chrysler, and the new UAW president is making no bones about wanting a big raise for his members, along with other concessions. Among them: Reinstating adjustments for cost-of-living increases, and ending Detroit’s tiered system of wages and benefits. 

Odds are good that at least one of the Detroit Three gets hit with a strike after the current UAW contract expires on Sept. 14. The union has a hefty strike fund and is willing to use it to drive a hard bargain. Its leaders know how much car prices have risen in recent years. Right or wrong, they think Detroit can afford a big pay hike. Strikes by smaller unions are also brewing or popping up. 1,400 workers at a locomotive plant in Pennsylvania have walked off the job. So have some healthcare workers. 

Other unions are threatening to join in with sympathy strikes. For instance, UPS pilots, who have their own union, were willing to walk out to help the Teamsters. And some traditionally open-shop industries have seen organizing pushes. More than 340 Starbucks stores have organized. Some Amazon warehouse workers have tried, as well. Most have failed so far, but that may not be the end of the story.

Is all this the start of a renaissance in private-sector unions? Not exactly. Membership is way down from a few decades ago, and that is unlikely to reverse. But the unions that remain are going to play hardball. That, in turn, means wages figure to keep rising faster than normal, making inflation slower to fall.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

As negotiations between major unions and employers stall, a potential strike could have far-reaching consequences. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Keep an eye on these labor disputes with big potential ramifications.

First, union United Auto Workers (UAW) is taking a more aggressive approach to contract negotiations with the Big Three automakers under President Shawn Fain than in previous years. Talks began earlier this month with the goal of reaching a deal before the current one with Ford, GM and Chrysler parent Stellantis expires in September.

Among the union’s demands: increasing wages, ending tiered structures for wages and benefits and reinstating annual cost-of-living adjustments for workers. More important is how the union aims to achieve them.

Under Fain, UAW, which represents 150,000 hourly workers at the Big Three automakers, has refused to name a single automaker on which to initially focus negotiations. Instead, the union has hinted at taking on Ford, GM and Stellantis simultaneously. UAW also says it’s not afraid of a prolonged fight, with $825 million in its strike fund.

During the last round of bargaining in 2019, a breakdown in talks between automakers and the union resulted in a 40-day strike against GM. The automaker claims the strike cost it $3.6 billion that year.

Meanwhile, the Teamsters and UPS averted a possible strike, for now, when they reached a tentative agreement on July 25. Union members need to vote to approve the new contract. Failure to ratify the tentative agreement, which addresses disputes about wages and benefits for part-time employees, could mean another strike threat looms. 

If a strike were to occur, you could expect parcel shipping rates to jump by 10%, as capacity is strained at FedEx and other parcel delivery companies. LTL, or less than truckload, companies should also benefit. They carry smaller freight than traditional truckload companies. Also poised to profit: Intermodal rail, a shift that is already happening as shippers schedule alternatives to UPS. 

Absent a strike, shipping rates will continue at their current low level.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Stocks jumped out of the gate and never looked back as investors cheered an encouraging reading on consumer confidence. Solid earnings from logistics giant FedEx (FDX) and athletic footwear and apparel retailer Nike (NKE) only added to the day's positive momentum, with both stocks surging in reaction to their quarterly results. It was the good news Wall Street was looking for, and sent the major market indexes notably higher. 

Starting with the economic data, the Conference Board said this morning that consumer confidence surged to 108.3 in December from November's reading of 101.4. This was the first increase in consumer confidence since September, and the highest reading since April. "The economy is still headed towards a recession, but the consumer continues to show signs of resilience which could delay a significant tumble for equities," says Edward Moya, senior market strategist at currency data provider OANDA.

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Meanwhile, in earnings news, FedEx stock rose 3.4% after the company reported higher-than-expected fiscal second-quarter earnings and said it will cut costs by an additional $1 billion this fiscal year, bringing total savings to $3.7 billion. Additionally, Nike soared 12.3% – easily making it the best Dow Jones stock today – after the firm beat top- and bottom-line estimates and said inventories were down compared to the previous quarter.

As for the major indexes, the Dow Jones Industrial Average rose 1.6% to 33,376, the S&P 500 Index gained 1.5% to 3,878, and the Nasdaq Composite jumped 1.5% to 10,709.

Be Prepared for This Bear Market to Continue

Today's broad gains were promising, but let's not forget that the stock market remains in bear-market territory. Plus, many strategists expect the bear market to continue well into 2023. 

"The Federal Reserve remains committed to taming inflation by keeping monetary policy tight, as Jerome Powell emphasized in his press conference, which is not great news for the stock market and supports the bear market continuing into 2023," says James Demmert, chief investment officer of Main Street Research. "The Fed is trying to engineer a soft economic landing that in our view has a high likelihood of failing and causing a recession in 2023."

As a result, the major market indexes "are vulnerable at current levels," Demmert adds. 

Given this precarious market backdrop, investors would do well to focus on sectors that historically perform well in market downturns, like healthcare or consumer staples. Another option is to embrace the best bear market ETFs, or funds that cover a variety of strategies that tend to work well in uncertain times.

Investors have plenty of worries – chief among them inflation and a potential recession. But the engine that ultimately drives the stock market is corporate profits. As long as earnings growth stays on track, then corporate America—and by extension, your stock portfolio—remains on solid ground.

Which is why the recent earnings preview from FedEx (FDX) was so unnerving. While the official report for the quarter ended August 31 comes out Thursday, FedEx warned on September 15 that it would have bad news, with quarterly results severely impacted deteriorating economic trends in Asia, Europe and the U.S. FedEx stock was immediately penalized, and is down more than 20% since this pre-announcement.

The key question for every investor is whether the shipping giant is suffering from a company-specific malaise or whether FedEx’s problems are a broad-market bellwether portending widespread doom. “FedEx is no ordinary economic actor, as its business literally touches every corner of the global economy” says Sheraz Mian, director of research for Zacks, an investment research firm.

A Downgrade for FDX

Analyst Colin Scarola, at investment research firm CFRA, suspects that part of the problem at FedEx is that it failed to adjust operations in its Express division (50% of revenues) as more international passenger flights, which transport some air freight as well, came back online after the pandemic-related slowdown, raising competition. "We don’t doubt that some of the poor performance is related to ongoing global economic headwinds and high inflation worldwide. But the extent of the decline at Express leads us to believe that poor operational execution is also at play,” says Scarola, who has cut his firm’s rating of FedEx from Strong Buy to Hold.

Still, the broader challenges facing FedEx are by no means unique, says Zacks’ Mian. “Company-specific challenges notwithstanding, we know that the macroeconomic landscape is expected to be tougher. Europe is practically in a recession already and China has held itself down with its zero-Covid policy. The U.S. economy has been faring better, but everyone knows there is pain ahead.”

You can see that pain reflected in the diminishing earnings estimates from a consensus of Wall Street analysts for companies in the S&P 500 stock index. According to Zacks, analysts expect third-quarter profits (for the three-month period through September) to be up just 1.2%, with revenues increasing 9.1%, compared to the same quarter a year ago. For context, in the pandemic-rebound third quarter of 2021, companies logged year-over-year earnings growth of 41.4%, according to Zacks, on revenue growth of 17.5%. And it gets worse: Without counting outsized earnings from the energy sector, estimated third-quarter earnings growth for the remainder of the S&P 500 would be down 5.5% from the same period a year earlier.

Refinitiv, another earnings tracker, has a slightly more positive outlook for the third quarter, with the analysts it polls projecting a 5% growth rate for S&P 500 profits compared with third-quarter 2021 levels. Not counting energy profits Refinitiv projects a 1.7% decline in growth. The outlook for earnings has gotten bleaker quickly—in July, analysts were looking for S&P 500 profits to grow more than 11% overall for the third quarter. Last October, they were calling for 14.5% growth.

Pain in Many Sectors (but not Energy)

For all of 2022, Refinitiv reports consensus estimates of 7.9% growth in profits overall for S&P 500 companies, compared with an explosive 52% in 2021. But the positive full-year 2022 outlook masks some pain in a few sectors: earnings growth is seen falling 12.2% for financial firms; 11.8% for communication services companies and 4.3% for consumer discretionary names, which provide non-essential consumer goods and services (think retail and restaurants, for example.) By contrast, energy sector earnings are expected to soar by 151% (think high gas prices).

Look for more earnings signposts from companies reporting this week, including IT consultant Accenture (ACN) and retail giant Costco (COST).

And although the deteriorating profit outlook overall calls for caution, it’s too early to despair. In a recent note to clients entitled “Earnings Estimates Collapse,” Jonathan Golub, chief stock strategist at Credit Suisse, acknowledged that many investors are interpreting the recent decline in estimates as a harbinger to recession. But his work shows that in high inflationary periods, including 1973, 1980 and 1981, earnings peaked just two months prior to the onset of recession, on average. “With earnings growth projections still positive,” he concludes, “revisions would have to fall much more to signal an economic contraction.”

Stocks capped off a terrible week with another slide as a warning from one of Wall Street's bellwether firm's stoked concern about the U.S. economy.

After Thursday's close, delivery giant FedEx (FDX, -21.4%) – whose financial results are often seen as a read on broader economic conditions – issued preliminary fiscal first-quarter earnings and revenue figures that were well below estimates. The company cited a recent acceleration in "global volume softness," and specifically pointed to "macroeconomic weakness in Asia and service challenges in Europe." FDX also withdrew its outlook for the full fiscal year, and said it is initiating several cost-cutting measures to offset the effects of lowered demand, including deferring staff hiring, closing 90 FedEx office locations and ending Sunday operations for several FedEx Ground locations. The company is slated on the earnings calendar to report its full quarterly results after next Thursday's close.

Wall Street's nerves were already frayed ahead of FedEx's financial warning, as this week's red-hot inflation reading all but assured another large rate hike from the Federal Reserve at next week's meeting. But an additional contributing factor to this week's massive volatility is likely today's quadruple-witching options expiration, which is when index futures, index options, stock options and individual-stock futures all expire at once. This happens four times a year – on the third Friday in March, June, September and December – and sometimes leads to heavy volume and erratic moves in parts or all of the market.

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At the close, the Nasdaq Composite was down 0.9% at 11,448, the S&P 500 Index was off 0.7% at 3,873, and the Dow Jones Industrial Average was 0.5% lower at 30,822. All three indexes suffered significant weekly losses.

Other news in the stock market today:

• The small-cap Russell 2000 fell 1.5% to 1,798.
• U.S. crude futures eked out a modest gain to end at $85.11 per barrel.
• Gold futures rose 0.4% to finish at $1,683.50 an ounce.
• Bitcoin slipped 0.9% to $19,629.81. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• International Paper (IP, -11.2%) and Packaging Corporation of America (PKG, -11.0%) plunged after Jefferies analyst Philip Ng downgraded the packaging stocks to Underperform, the equivalent of Sell. The downgrade reflects "the massive inventory glut in containerboard, with our checks indicating orders decelerating sharply & broad based downtime taken even by the smaller players," Ng writes in a note. "Our contacts believe a fourth-quarter price cut is imminent, and considering the 5%-6% of new capacity slated to come online the next 12 months have yet to impact the mkt, conditions could worsen in 2023."
• Growth stocks were some of the biggest decliners today, with Meta Platforms (META, -2.2%), Twilio (TWLO, -4.8%) and Snowflake (SNOW, -6.1%) seeing big declines.

Why Low-Volatility Funds Could Be a Good Strategy

Don't be discouraged. Yes, it's a difficult time for the stock market – and there's likely more volatility to come. But investing is a marathon, not a sprint, and there are ways to ride out the storm. Most recently, we've mentioned the use of quality income-paying stocks, like the Dividend Kings or Dividend Aristocrats, all of which have decades of consistent dividend growth under their belts.

But given this week's panic-selling, it seems like an opportune time to revisit low-volatility strategies. "Minimum volatility is a defensive bet," says Huw Roberts, head of analytics at data research firm Quant Insight. "The whole aim is to keep people invested in the market, but targets stocks that aren't as volatile or don't always behave in the same way as the overall index (say the S&P 500)." Huw adds that for those "worried about inflation, Fed rate hikes etc.," taking this route might be a good strategy. Here, we've compiled 10 low-volatility funds that could give investors peace of mind over the long run. Check them out.

We're at the tail end of earnings season and the list of names reporting this week is thin. Still, of those remaining on the earnings calendar, results from shipping giant FedEx (FDX, $246.79) will certainly be in focus amid global supply-chain disruptions.

The stock has struggled on the charts since peaking near the $320 per-share mark in late May. However, since bottoming at a 52-week low around $216 in early October, FDX is up roughly 14%.

Can a solid earnings report keep the wind at FedEx's back?

The company is slated to report its fiscal second-quarter results after Thursday's close. Analysts, on average, are calling for earnings of $4.25 per share, down 12% on a year-over-year (YoY) basis. Revenue, meanwhile, is expected to arrive at $22.44 billion, an 8.9% improvement over the year prior.

Baird Research analyst Garrett Holland has an Outperform (Buy) rating on FedEx ahead of earnings. "Quarter-to-date trends have been tracking largely as expected as supply-chain challenges have weighed on volume growth," he says.

But pricing strength remains strong and could be further elevated should COVID-19 disruptions – most recently the omicron variant – continue in 2022, he adds. As such, he remains an "opportunistic buyer of transports."

Morgan Stanley analyst Ravi Shanker isn't so sure. He has an Equal Weight rating on FDX, which is the equivalent of a Hold.

Shanker thinks that while "an ongoing recovery and strong consumer should remain supportive of topline results," he expects FedEx to report adjusted earnings of $3.84 per share – below the consensus estimate – as "labor availability issues that weighed on results last quarter are likely to remain both a productivity and cost headwind."

He also believes the cuts FDX made last quarter to its full-year guidance were not steep enough and sees "risks to fiscal second-quarter and fiscal 2022 numbers as pandemic tailwinds die down."

For the full fiscal year, Shanker is targeting for earnings per share (EPS) of $18.49, which is lower than analysts' consensus estimate for earnings of $19.62 per share.

Bullish Analyst Eyes "Healthy Upside" for Adobe Earnings

Adobe (ADBE, $642.38) will also step into the earnings confessional after Thursday's close to unveil results for its fiscal fourth quarter.

Analysts are certainly upbeat toward ADBE. Of the 31 pros following the stock tracked by S&P Global Market Intelligence, 18 have a Strong Buy rating, eight call it a Buy and five say Hold.

One of those with a Buy rating is Mizuho Securities analyst Gregg Moskowitz. Looking ahead to earnings, he believes the maker of Photoshop and Acrobat "is very well-positioned to benefit from digital transformation with its highly comprehensive end-to-end offering that differentiates it from competitors and should enable it to drive more holistic sales across its clouds."

He cites favorable quarterly checks from the research firm that he thinks will lead to "healthy upside" to Street estimates.

As for those Street estimates, the pros, on average, are projecting a 19.3% year-over-year pop in revenue to $4.09 billion. This should fuel a 13.9% rise in earnings to $3.20 per share, they say.

Analysts See Strong Earnings Growth for Darden Restaurants

Olive Garden parent Darden Restaurants (DRI, $151.65) is the lone name reporting earnings on Friday, with its fiscal second-quarter results due out ahead of the open.

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The company reported stronger-than-anticipated earnings and revenue in September, sending its stock up 6.1% in reaction – and to (what was at the time) a new record closing high of $159.50.

"We are growing more confident in Olive Garden's sales upside potential and DRI's apparent better visibility into inflation outlook is encouraging," said BMO Research analyst Andrew Strelzik after the report was released. However, he maintained his Market Perform (Hold) rating, saying "a balanced risk/reward keeps us on the sidelines."

Since its last earnings report, DRI stock's performance on the chart has been choppy, though shares are currently up 10% for the month-to-date.

Another positive earnings report could help Darden Restaurants end the year on a high note. For the company's fiscal first quarter, the consensus estimates are for earnings of $1.44 per share (+94.6% YoY) and revenue of $2.23 billion, a 134.4% improvement over its year-ago results.

On June 18, 1971, at the age of 27, Fred Smith used his $4 million inheritance to start Federal Express. Today, FedEx is a multibillion-dollar company. Mr. Smith delivered on his inheritance. Mr. Smith’s story got me thinking about my kids and their future, albeit much more humble circumstances.

I have three young children. I wonder if I could I leave behind a little something for them like Mr. Smith’s parents did? I hope so. However, there’s a chance I may use up my savings in retirement. What if I wanted a little more certainty? What if I could pre-fund and guarantee my kids an inheritance? After all, I save for my kids’ college, and I save for my retirement, why is saving for an inheritance any different?

It’s not that I want to make my kids rich. Instead, I want to give them a chance to compete with families like that of Fred Smith’s. I also know if I can save for and guarantee my kids’ inheritance, I won’t have to worry about it later on. If we plan correctly, my wife and I could spend every dollar on ourselves in retirement, zeroing out our bank account. We could do this if we knew we already planned for and guaranteed our kids a tax-free $1 million inheritance.

So, how do we do it?

Instant estate

The simplest, surest and most tax-efficient way to create an immediate inheritance for the next generation is by using life insurance. Here’s how it works.

If you give your child a check for $10,000 or $15,000 that’s nice, but that’s not a game changer. It may help with a wedding or a new car. It may be spent on bills. If we want truly transformational change, to give our kids the opportunity to do something big in life, we need to think big.

I work with a 65-year-old couple in Florida. They have enough money to live on but wanted to make sure they left something for the next generation. They want to leave their kids and grandkids $1 million total. At their age, the annual outlay for a $1 million life insurance policy is about $14,000 a year. The policy is guaranteed till their age 120.* This is not term life insurance: That doesn’t last that long. If they both pass at age 90, the return on their life insurance policy is a 6.64% tax-free rate of return. Tax-free because a life insurance death is income tax-free. They would have to earn 9.22% in a taxable investment, assuming a 28% federal and state combined tax rate. Not bad.

For my family, I am a little younger, 43, and looking at a life insurance policy that costs $5,000 a year for 30 years with a $1 million death benefit guaranteed to age 120*. At age 86, that’s a 6.13% tax-free rate of return, again assuming combined federal and state 28% tax rate. This means I’d have to earn about 8.51% before taxes to get that same $1 million**. That might be possible in an all-stock portfolio, but there are no guarantees in the stock market, plus there are taxes to consider in all stock portfolio.

A life insurance death benefit is income tax-free. Can’t say that about an IRA or 401(k). Both of those get eaten up by income taxes. Not to mention, there are several bills on the hill calling for the elimination of the step-up-in-basis rule, with some exclusions. That change doesn’t bode well for large stock inheritances, but it does favor life insurance, since the death benefit is income-tax free.

True, the kids will have to wait until Mom and Dad pass to receive the life insurance inheritance, that is the trade-off. However, at the parents’ death all the insurance money goes into trust — protected from creditors, divorces and lawsuits. It’s a cleaner, neater, more tax-friendly way to create a guaranteed inheritance for the kids.

Peace of Mind

The peace of mind is knowing that whatever happens in the future — inflation, high medical bills, a stock market crash, and if I live a really long time (up to age 120) — I know my kids will at least get the $1 million life insurance policy. The peace of mind is also knowing that now that the kids’ inheritance is planned for, I am free to spend all my retirement money on retirement. I don’t have to skimp on my retirement to leave something for the kids. I can even choose to leave anything that’s left to charity. I can do this because the kids are already provided for because we pre-funded and guaranteed their inheritance with the life insurance policy.

That is the ultimate retirement plan. We spend all our money on our retirement, leave the rest to charity, and the kids get the life insurance policy.

What to consider

• Life insurance is based on age and health.
• Premiums and benefits are guaranteed by the insurance company. For this reason, you want to work with a financially sound company.
• You can pay the insurance premium for a certain number of years or pay for life. Make sure you can comfortably afford the policy, because there are penalties to cancel. I advise finding a premium that fits your budget.

Premiums are the same whether you purchase online or through an agent — there are no discounts. I suggest using an independent agent. For my clients, I shop the coverage around to multiple carriers, talk with the underwriter about each case, and tweak the policy design to make it more affordable for the client.

If you’d like a quote to see if pre-funding an inheritance can work for you, please email me at maloi@sfr1.com.

*For illustrative purposes only, your experience may differ.

**Guaranteed by the claims paying ability of the insurance carrier.

Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Stocks finished the week in mixed fashion as the Dow Jones Industrial Average was weighed down by financial stocks, but the tech-heavy Nasdaq Composite rebounded following yesterday's heavy selloff.

Big banks turned lower after the Federal Reserve declined to extend a pandemic-era exemption that allowed them to hold less loss-absorbing capital on their books. Because banks use money to make money, the market typically boos any increase in capital requirements, which lowers banks' revenue potential. JPMorgan Chase (JPM, -2.3%) and Goldman Sachs (GS, -1.0%) were among the Dow's top laggards as a result.

Tech stocks, meanwhile, returned to their winning ways after a Thursday spike in bond yields stoked inflation fears that sent traders scrambling out of the highest-flying names. Facebook (FB, +4.1%) popped on news that it is working on a version of its Instagram site suitable for children under the age of 13.

"Treasury yields pulled back slightly overnight following yesterday’s scary-looking spike, and that helped the bounce in the tech sector even as global risk assets remained under pressure in the wake of yesterday's dip on Wall Street," wrote Ken Berman, founder and CEO of GorillaTrades. "The fact that the Fed didn't extend an emergency rule that allowed banks to keep less reserves caused some turmoil among financials in early trading, but volatility remained relatively low in the other sectors."

At Friday's closing bell, the blue-chip Dow lost 0.7% to close at 32,628, while the Nasdaq gained 0.8% to 13,215. The broader S&P 500 split the difference, dipping 0.1% to finish at 3,913.

Other action in the stock market today:

• Visa (V) plunged 6.2% on a report that the Justice Department is opening an antitrust probe.
• FedEx (FDX) jumped 6.1% after beating analysts' earnings estimates.
• The small-cap benchmark Russell 2000 added 0.9% to 2,287.
• Gold futures managed a 0.5% improvement to $1,741.90 per ounce.

There's something to be said for sticking to what's working.

Despite a couple of days of underwhelming performance, the Dow is outpacing the Nasdaq by a wide margin so far this year.

Partly that's because investors in priced-to-perfection tech stocks have been quick to sell after years of big gains. And partly that's because the Dow contains some of the largest and most liquid ways to play promising contemporary trends.

After all, if you're investing in stocks set to benefit from the return of travel, leisure and hospitality, you're surely checking out Dow stock Walt Disney (DIS). If you're looking for stocks that offer exposure to a wider reopening of the economy, you'll recognize longtime Dow component Coca-Cola (KO) as a smart play. And there's no way you can add bets on big-time infrastructure spending to your portfolio without including Dow stalwart Caterpillar (CAT).

Indeed, whether you're looking to bet on a rotation into more value-oriented names or the potential outperformance of the most cyclical stocks, the Dow's 30 stocks contain multitudes. To get an idea of what the blue-chip average can do for you, have a look at how analysts' rate all 30 Dow stocks at this point in the economic cycle.

The task of returning unwanted products has become a lot more challenging during this pandemic.

If you've been holding on to an unwanted item purchased in-store or online just before retailers temporarily closed brick-and-mortar locations or suspended e-commerce transactions, you're in luck. Most have extended their standard return window to accommodate customers who've been sheltering in place for weeks. But the trends aren't all favorable for consumers: Big-box retailers such as Costco and Walmart have temporarily discontinued returns for select household items -- including paper products and cleaning supplies -- due to health and safety concerns. And due to the increased volume of returns and e-commerce activity in general, it may take retailers longer than usual to process refunds, says consumer-savings expert Andrea Woroch.

For purchases that need to be returned by mail, the United States Postal Service remains open, as do major shipping outlets such as UPS and FedEx.

We've examined amended return policies for many popular brick-and-mortar retailers and e-commerce sites to identify how soon shoppers will need to initiate a return in order to get a full refund. Here's what we found.

Most items ordered from Amazon between March 1 and April 30 can be returned through May 31. (See 16 Things You Can't Return to Amazon.) You'll need to log into your account to initiate the return process and select a shipping method.

If you choose UPS drop-off (at an authorized shipping location) or a drop-off via an Amazon Hub Locker, you will need to print out a prepaid shipping label. The shipping cost is deducted from the refund amount. If you opt for a shipping carrier of your choice, such as FedEx or USPS, you'll have to pay for the shipping costs upfront and provide your own mailing label.

For customers who purchased items at a brick-and-mortar location prior to stores temporarily closing, American Eagle asks that you hold onto these items until stores have reopened. Currently, the retailer is unable to accept returns or exchanges by mail for products purchased in-store. American Eagle isn't placing a time limit on exchanges or returns once stores have reopened.

Online customers are still able to make returns by mail, but should expect processing delays. If you have questions pertaining to your order, you can live-chat with American Eagle's customer service department.

Apple stores are closed until further notice, which means customers aren't currently able to make in-store returns. Once brick-and-mortar locations reopen, customers have up to 14 days after the reopen date to return an unwanted item for a full refund.

If you'd like to return an online order, go to apple.com/orderstatus to start the process and print a return shipping label. You can opt to ship the order back yourself or schedule a pickup.

With its stores temporarily closed, the electronics retailer has extended its return policy: Items purchased on March 1 through May 17 can be returned until May 31 for a refund. Currently, Best Buy is only permitting contactless curbside returns and exchanges. You will need proof of purchase and an ID, such as your driver's license, to complete the process.

In-store product trade-ins and recycling services have been suspended until further notice. Items purchased with a third-party contract, such as cell phones, cellular tablets or AppleCare monthly plans, must still be returned within 14 days of purchase.

For online returns, if the reason you are returning the item is for anything other than an error by Best Buy, the cost of shipping will be deducted from your refund.

The warehouse club will continue to honor its return policy, which allows members to return unwanted products at any time for a full refund, on most items it sells at local Costco locations. There are exceptions, such as cellular phones, electronics and major appliances, that must be returned within 90 days of purchase.

However, amid health and safety concerns related to COVID-19, there are certain products that cannot be returned until further notice. This includes bottled water, disinfectant spray, paper towels, rice, sanitizing wipes and toilet paper.

For online returns, you'll need to log into your account and print a shipping label to return via mail. To see a list of items that cannot be returned via the warehouse club's online return center, go here.

DSW's standard return policy, which allows customers to make returns up to 90 days from the date of purchase for a full refund, is still valid. While many locations remain closed, you can make returns at stores that allow contactless curbside pickup. You'll need to contact your local DSW to find out when curbside return hours are in operation.

Upon arrival, you need to contact the phone number provided to notify an associate you have arrived. That person will then come to your car to take your return.

The e-commerce site is now giving customers 21 days from when a return has been initiated and accepted by the seller or a return shipping label has been provided to send the unwanted item back.

Once the return has been received by the seller, they'll have five business days to inspect the item, confirm it's in good condition and issue your refund.

All of Gamestop's brick-and-mortar locations are closed to customers. While you can make purchases online and pick them up via the retailer's contactless "Delivery@Door" service between noon and 8 p.m. local time, product returns and exchanges have been suspended. Those services will resume once stores reopen.

The video game retailer will amend its return window once stores reopen to allow customers enough time to make returns and receive refunds.

Home Depot is asking customers to refrain from making in-store returns at this time but is still accepting them. The home improvement chain has extended its standard 90-day return policy to 180 days from the date of purchase on most new and unopened merchandise.

There are certain items that must be returned within 30 days including area rugs, consumer electronics, furniture, gas-powered equipment and generators. Some Home Depot items -- from gift cards to some appliances -- can't be returned at all.

Customers can return eligible online orders by mail. Once you've been approved for a return, you'll receive a shipping label via e-mail. Drop your package off at your local UPS store or dropbox.

All of the furniture retailer's U.S. stores remain closed. As a result, IKEA has suspended its 365-day return policy and isn't accepting any new returns or exchanges until further notice. For exchanges and online returns shipped back prior to March 16, those orders are being processed as quickly as possible.

When stores resume normal operations, IKEA promises customers whose return window expired during the closure that it will take that into consideration when processing future refund requests.

Kohl's big-box stores have remained closed to help combat the spread of COVID-19. As a result, the retailer is allowing customers up to 30 days once stores reopen to make returns with a valid receipt or account look-up for a full refund.

This applies even if the item surpasses their standard 180-day return window and includes all Kohl's merchandise except for premium electronics. Items such as headphones, speakers, computers and tablets must be returned within 30 days of purchase (see full list here).

Lowe's has extended its 90-day return policy to 180 days from the original purchase date. Customers can return most new or unused merchandise in-store for a full refund with proof of purchase. Returns for items purchased with a gift card will be refunded as an in-store credit. There are a select group of products that have a modified return policy and are listed below:

• Highway trailer: Within 60 days of receipt in its original state with original paperwork, including title (if applicable).
• Liquid paint: Within 60 days of purchase.
• Major appliances: Refrigerators, washers, dryers, ranges, hoods, dishwashers and some microwaves must be returned within 60 days of purchase.
• Outdoor power equipment: Mowers, chainsaws, generators, pressure washers, trimmers and blowers must be returned within 60 days of purchase.

If you're looking to return an online order, you'll need to affix the prepaid shipping label included with your order to the original packaging. You can then drop it off at your local parcel carrier.

If you made an in-store purchase on or after February 15 that you want to return, you can do so in-store up to 30 days after your local Lululemon location reopens. You'll need your receipt, and the items must be unworn and unwashed.

Online customers can return orders right now by mail, but it can take up to 15 days for shipments to reach the retailer's distribution warehouse due to high demand. Once your return has been received, the refund process will be initiated.

Nike has temporarily extended its 30-day return policy to 60 days for all in-store and online purchases made after February 14. As part of their standard policy, customers are able to test out their new shoes or apparel to make sure they're satisfied with their purchase. If not, you can return the items within the allotted timeframe for a full refund.

For online orders, you don't need a receipt, but will need to provide your order number (which you can get from your order confirmation e-mail). For in-store or gift purchases, you'll need the original receipt or gift receipt. If you have none of these things and the items you're attempting to return have been unworn and unwashed, you will receive a store credit.

All Nike customers -- even those who made purchases before February 14 -- can still make a return after 60 days, but only if the item is unworn and unwashed.

Nordstrom's standard return policy, which allows customers to return unwanted purchases at any time with a proof of purchase, still stands.

Some Nordstrom locations are offering contactless curbside returns. Check the retailer's store locator tool to find out if curbside returns are available in your area. Or, ship back unwanted purchases -- online and in-store -- via USPS using a prepaid shipping label provided by the retailer.

Due to an increased volume of returns and coronavirus-related delays, customers should anticipate the processing of refunds to take longer than the standard 14 days.

Customers who made purchases in-store on or after February 15 can return those items with a proof of purchase for a full refund up to 30 days after Sephora stores reopen. Those who made purchases between January 15 and February 14 can return unwanted items that are new or gently used (say, you tested out a new product once or twice, but soon decided you didn't like it) with a receipt for store credit.

If you made an online purchase, the beauty retailer has extended its standard 30-day return policy to 60 days. This will allow online customers enough time to return orders by mail. Once the items have been received, Sephora will refund your order using the original method of payment.

If you purchased an item in-store or online with a "return by" date between March 26 and April 26 at Target, you now have until June 15 to return it for a refund or store credit. The big-box retailer had previously suspended returns during that period.

Customers who wish to return online orders can do so by mail using the retailer's online return center. You'll need to print out a shipping label and drop off the package at a UPS location.

Returns for items purchased in-store before temporary store closures took effect have been suspended until brick-and-mortar locations reopen.

If you ordered an item online or through Ulta's app and chose "curbside pickup," you can ship the items back to the beauty retailer's return center. You'll be responsible for shipping costs. You will also need to print out your order confirmation, clearly mark the items being returned and include it with your shipment.

For more details, go to ulta.com/ways-to-shop-ulta-beauty/pickup and click the "What if I want to return my curbside pickup order?" dropdown.

Walmart has temporarily suspended returns and exchanges of apparel, food items, health and beauty products, household cleaning supplies, laundry detergent, paper products and pharmacy items amid the coronavirus outbreak. For all other goods, the big-box retailer recommends initiating the return process online or through their app before venturing to your local store location.

You'll need your receipt containing a valid transaction number to do this. If the items purchased are eligible, you'll be able to print out a shipping label and mail the unwanted items back for free. If they aren't eligible, you'll have six additional weeks on top of Walmart's standard 90-day policy to make in-store returns once that service has resumed for impacted product categories.

Online orders sold and shipped by Walmart.com can be returned up to 90 days after purchase by mail. Exchanges of online orders currently cannot be processed by mail. You will need to do so in-store for eligible items. Products purchased online from third-party sellers via Walmart's marketplace do not qualify for returns, refunds or exchanges.

Return pick-ups of large items, such as furniture weighing more than 100 pounds or furniture sets that require freight shipping, have been temporarily suspended. You can contact Wayfair.com's customer service directly at 844-616-9555 for clarity on when pick-ups will resume in your area.

For all other items, their standard return policy remains in effect. You have 30 days from the date of delivery to return an unwanted item. You will be on the hook for return shipping costs, and the product must be received in its original condition and packaging.

Items that cannot be returned (unless you receive them damaged or defective) include bundled items (for example, "5 for $25," unless the entire bundle is returned), clearance items, gift cards, personalized items, products you've already assembled or are marked as non-returnable on the packaging.

Everyone’s aware of the seasonal pattern around the holidays. As Thanksgiving and Black Friday near, retailers ramp up their discounts until going full-bore for a roughly monthlong bargain bonanza. But there’s an investment thesis, too: Companies whose sales and profits peak around Christmas tend to make good stocks to buy for a short-term bump.

It doesn’t always work with every seasonal stock, of course. Some companies have bad quarters. And in broad-market corrections and bear markets, almost everything falls – even quality firms that are performing well.

But if a normal seasonal pattern holds, several companies – that have exhibited this pattern of rising and falling in previous years – should do quite well. They’re not just retail stocks either. Many other types of associated investments get the same type of multi-month boost.

Here are seven stocks to buy for a 2018 holiday season pop, though many of them you may want to keep well into the new year.

Data is as of Nov. 15, 2018.

• Market value: $59.5 billion
• FedEx (FDX, $227.81), the package delivery company formerly called Federal Express, often does well during the Christmas quarter, and 2017 was no exception. Shares gained more than 12% from early October through late December, though it did give back nearly all those gains in the March quarter, falling 8%.

The stock looks like a bargain at the moment, trading at just 11.2 times analysts’ estimates for next year’s profits. The dividend, at 1.1%, doesn’t look like what you’d expect out of a value play, but you’re getting outstanding payout growth – the 65-cent quarterly dividend has jumped 160% since the beginning of 2016.

But there’s more than a value proposition; FedEx keeps growing at a decent rate. Last year’s revenues of $65 billion should hit $71.3 billion this year, then $75.2 billion next, analysts say. Speaking of the pros, 21 of the 28 analysts following the stock give it buy-equivalent ratings, and none have it as a sell.

Nancy Perez, managing director and senior portfolio manager at Boston Private, a Boston-based wealth management company, thinks e-commerce should translate into another healthy season for FedEx. She sees revenue growing by double digits as it continues to gain traction from the strong U.S. economy. And it’s one of just a few companies that actually benefit from Amazon.com (AMZN) rather than suffer from it – at least for now.

• Market value: $775.2 billion

Speaking of Amazon.com (AMZN, $1,619.44), the e-commerce giant is up more than 35% year-to-date. That sounds great, but anyone following the stock would know that it was so much better just a few months ago.

A broader collapse in tech stocks has hit Amazon particularly hard. AMZN shares are in bear-market territory, having fallen more than 20% off its early September peak. The company didn’t help itself in late October, when it announced a robust 29% jump in third-quarter revenues that nonetheless failed to beat Wall Street expectations.

Still, Amazon could be in position for a holiday rebound.AMZN shares jumped 22% during the 2017 Christmas quarter, and while shares weakened to start 2018, they took off again after the company reported terrific results in early February.

Boston Private’s Perez says Amazon should do well again in the 2018 holiday season, citing a National Retail Federation forecast that overall Christmas-season sales will rise 5% from last year.

Edward Jones consumer analyst Brian Yarbrough expects Amazon to continue gaining market share against brick-and-mortar retailers this Christmas season, as convenience becomes ever more important and consumers continue to evade crowds. He did, however, have it as merely a hold based on its value in early October, as the correction in tech stocks began.

• Market value: $921.6 billion
• Apple (AAPL, $191.41) is another tech stock that has fallen into bear-market territory, if only even briefly, with a quick 20% drop between its Oct. 3 high and its Nov. 14 low. While it made headlines as the first U.S. company to reach $1 trillion in market capitalization earlier this year, it has since ceded that mark, though it remains the most valuable company by market value.

Apple has struggled mightily since its most recent earnings report, in which it not only reported flat iPhone and Mac unit sales, but said it would no longer report unit sales – what many analysts took as a sign that Apple expects gadget sales to be underwhelming going forward.

Boston Private’s Perez points out Apple still has an attractive valuation compared to other tech stocks. AAPL trades at a forward P/E of merely 13 despite analyst predictions for double-digit profit growth next year and a dividend that, while modest at 1.5%, is rapidly growing. Moreover, there’s still a bull case – namely, Perez believes, Apple’s efforts to push more users to spend on its Services division offerings such as iCloud and Apple Music.

Last year, Apple rose by about 10% during the holiday season. Considering how low expectations appear to be for Apple’s unit sales, perhaps a similar-sized rebound could be in the cards for the rest of the year.

• Market value: $18.3 billion
• Best Buy (BBY, $67.78) has stunned a lot of market experts over the past few years by delivering strong returns in the face of Amazon’s business advances. That included a 20% jump during the holiday-season months.

BBY has cooled off a bit this year, however, pacing for slight losses with about six weeks left in the year. Rumors of poor Christmas sales dragged the stock in February, then shares fell further once the bad news was confirmed in March.

But John Burke – CEO of Burke Financial Strategies in Iselin, New Jersey – still likes Best Buy. “Best Buy beat expectations with their August earnings report, with strong sales in electronics, mobile phones and entertainment,” he writes, growing e-commerce by 10% and in-store revenues by 5%.”

And if analysts’ projections hold, Best Buy should remain one of the best turnaround stories in the market. The pros still believe the retailer will post modest revenue gains this year and next (versus many other brick-and-mortar operators that continue to see sales slide), and they expect 15% profit growth this year followed by a 7% climb in 2019.

As for a holiday boost this year? Best Buy should benefit from a broader uptick in consumer spending, but it’s also positioning itself to gain customers from deceased Toys R Us by bolstering its toy selection for the 2018 holiday season.

• Market value: $9.9 billion
• Gap (GPS, $26.22) stock often can be a big Christmas tease. The stock rises as reports grow of a great holiday season … then falls back when more modest numbers are released. Last year, for instance, GPS rose 18% during the fourth quarter, but fell back by about 6% during the March quarter.

Gap admittedly isn’t as strong a long-term play as the rest of the stocks on this list. The Gap brand specifically is struggling. Last quarter, the company reported its seventh consecutive quarter of growing same-store sales, yet the Gap brand specifically reported a 5% decline in comps. Analysts worry that heavy discounts are dissuading customers from ever paying full price, and crimping margins.

There are a few reasons to buy. GPS shares have been knocked into deep-value territory of less than 10 times future earnings estimates, and patient shareholders are being paid to wait via a 3.5% dividend.

Admittedly, even if the Gap has a boffo fourth quarter, it will take more than one strong report to convince investors that there’s a real long-term buy-and-play thesis here. But even whispers of a good Q4 could be enough to propel battered-and-bruised GPS shares considerably higher.

Put another way: Gap may be a good short-term play for more speculative investors.

• Market value: $29.6 billion
• Southwest Airlines (LUV, $53.23) is the most domestic focused of major U.S. airlines, and that – as well as an emphasis on top-tier customer service – has helped the stock nearly triple over the past five years.

It hasn’t been smooth sailing the whole way. In fact, LUV had more than tripled as of just a month ago, but the stock turned tail fast in late October despite a very strong quarterly earnings report. Southwest delivered record third-quarter earnings per share of $1.08, operating revenues grew 5.1% year-over-year and revenue per available seat mile (an important airline operating metric) improved by 1.2% YoY. All these results came in the face of higher fuel costs.

Investors still responded by selling in droves, and shares remain off nearly 20% for the year-to-date.

A strong Christmas season could turn the tide. LUV shares jumped nearly 12% during the holiday quarterly of 2017, and airline ticket prices are expected to jump sharply for the 2018 holiday season. Meanwhile, investors who decide to stick around for longer than just a few months should be rewarded with a quickly growing payout that has more than doubled since 2016. In fact, LUV represents one of the fastest-growing dividends in Warren Buffett’s Berkshire Hathaway (BRK.B) portfolio.

• Market value: $285.3 billion
• Walmart (WMT, $99.54) has lost a little bit of steam of late amid Vermont Sen. Bernie Sanders’ push to force the company to raise its minimum wage to $15 across the board. But the company remains a retailing juggernaut whose projected $515.7 billion in current-fiscal-year sales is more than double the $232.3 billion that analysts expect Amazon.com to earn this year.

It also spread plenty of holiday cheer to investors in 2017, rocketing 26% during the holiday quarter alone.

Edward Jones’ Yarbrough expects Walmart to excel this Christmas, too. He likes their efforts in e-commerce, which has been led by the 2016 purchase of Jet.com, but also include other smaller e-commerce pickups over the past couple years, as well as the addition of grocery pickups, and the 2018 addition of a 77% stake in Flipkart – the Indian answer to Amazon.com.

Burke, of Burke Financial Strategies, notes that Walmart’s margins are better than Amazon, and sees Amazon’s purchase of Whole Food Market last year as an admission that Walmart’s “combination of bricks and e-commerce” is the right strategy.

Perez sees Walmart setting up well for Christmas, too, with 57% of online shoppers expecting to visit its website over the holidays, and 70% of women age 40-54 planning to shop at the store.

“Walmart’s fulfillment investment has been effective,” she adds.

Microsoft cofounder Bill Gates is the richest man in the world, with an estimated net worth of $86 billion, according to Forbes. He's also one of the world's largest philanthropists, running the Bill & Melinda Gates Foundation alongside his wife. The activities of the foundation are funded by a trust, which holds investment assets donated by Gates. (The trust also receives donations from fellow billionaire Warren Buffett.) For his own benefit, Gates has Cascade Investment, his personal wealth management firm, headed up by Michael Larson.

If there's a common thread that runs through the holdings in both portfolios, it's that Gates favors simple business models that generate dependable cash flow, says Brian Bollinger, president of Simply Safe Dividends, which tracks Gates's stock holdings. "Larson is primarily focused on buy-and-hold value investing,” Bollinger says. "He goes wherever there is value."

Gates is no doubt more concerned with capital preservation than rapid appreciation at this point. Dividend stocks help get the job done because they can add ballast to a portfolio when the market gets stormy. "Safe dividend stocks will continue paying reliable income even if their stock prices are temporarily in the dumps," says Bollinger. "It makes it easier to stomach volatile stock prices and stay the course."

If steady income is important to the health of your portfolio, you could do worse than follow the lead of Gates. After sifting through the publicly disclosed holdings in the billionaire's personal and charitable portfolios, we identified five of the most attractive dividend stocks owned by Bill Gates.

Data is as of April 6, 2017, unless otherwise indicated. Click on symbol links in each slide for current share prices and more.

(Stocks are listed in alphabetical order. Market capitalization, provided by Zacks.com, represents current share price times the number of share outstanding. Dividend yield is calculated based on the last four quarterly dividend payments. Analyst ratings are per Zacks. Gates’s holdings were identified with the help of S&P Global Market Intelligence and through the most recent regulatory filings.)

• Symbol: ECL
• Share price: $125.21
• Market value: $36 billion
• Dividend yield: 1.2%
• Analysts' opinions: 7 strong buy, 0 buy, 7 hold, 0 sell, 1 strong sell

Ecolab provides water treatment and other industrial-scale maintenance services for the oil and gas industry. That means its fortunes wane when energy companies cut their spending in response to falling oil and gas prices. The current yield is modest, but over the long haul Ecolab has proved to be a winner, thanks in large part to a dividend that dates back 80 years. Indeed, the company's dividend prowess has earned it membership in the so-called Dividend Aristocrats, a group of Standard & Poor’s 500 stocks that have raised their dividends annually for at least 25 years in a row.

The Gates trust, which funds the work of the charitable foundation, holds more than 4 million shares of Ecolab. More than 28 million shares are held by Cascade Investment, Gates's personal asset manager.

• Symbol: UPS
• Share price: $106.67
• Market value: $93 billion
• Dividend yield: 3.0%
• Analysts' opinions: 4 strong buy, 0 buy, 12 hold, 0 sell, 1 strong sell

Shipping giants UPS and FedEx (FDX) have long enjoyed a wide moat that protects them from would-be competitors. Building a global delivery network is complicated and enormously expensive. Analysts at UBS say Amazon.com (AMZN) could emerge as a formidable rival in the package-delivery space in the not-so-distant future, but for now UPS’s business appears safe. So too does its dividend, which UPS has raised every year since 2002, with the exception of 2009, when it kept its payout steady as the global economy struggled to recover. (FedEx also has a good track record of regular dividend hikes, but its current yield is much lower than that of UPS.)

The Gates trust holds about 4.5 million shares of UPS, plus 3 million shares of FedEx. Cascade owns neither.

• Symbol: WBA
• Share price: $81.66
• Market value: $88 billion
• Dividend yield: 1.8%
• Analysts' opinions: 10 strong buy, 2 buy, 3 hold, 0 sell, 0 strong sell

The nation's largest drugstore chain by store count is about to get even bigger. A deal to buy Rite Aid is expected to close later this year, adding thousands more locations to the 13,000-plus stores that Walgreens already operates in 11 countries. Tracing its roots back to a single drugstore founded in 1901, Walgreens has boosted its dividend every year since 1975. It merged with Alliance Boots in 2014 to form the current company.

Gates’s stake in Walgreens – about 3.5 million shares – is held by the trust. Cascade doesn’t report ownership on any shares of the drugstore chain.

• Symbol: WMT
• Share price: $71.43
• Market value: $223 billion
• Dividend yield: 2.9%
• Analysts' opinions: 9 strong buy, 0 buy, 10 hold, 0 sell, 3 strong sell

Warren Buffett sold almost all of the Walmart shares owned by his umbrella company, Berkshire Hathaway (BRK.B), at the end of 2016, largely because of relentless competitive pressure from online retailer Amazon.com. Gates seems to have held fast. Maybe it’s because there are good reasons to be patient with Walmart, Bollinger says. "I would be surprised if [Cascade investment chief] Larson sticks around with Walmart beyond the next year or two, but there's not a great urgency to exit Walmart today. The stock's price-earnings multiple is at a double-digit discount compared to the broader market, and Walmart still enjoys a defensive, recession-resistant business."

The Gates trust own nearly 12 million shares of the world's largest retailer; Cascade owns none.

• Symbol: WM
• Share price: $73.09
• Market value: $32 billion
• Dividend yield: 2.3%
• Analysts' opinions: 4 strong buy, 0 buy, 5 hold, 0 sell, 0 strong sell

Waste Management’s revenues aren’t particularly sensitive to economic cycles for one simple reason: There will always be garbage. That steadiness has helped the company raise its dividend every year since 2004, a span that included the Great Recession. The company also generates buckets of cash (after operating expenses and capital spending), which should keep the payouts coming.

Cascade owns more than 13 million shares of Waste Management, and the trust holds nearly 19 million.