To help you understand what's going on in politics, the economy 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…

A big shift in economic policy is underway. One that includes more federal involvement in parts of the private sector that were once off-limits. The shift began in Donald Trump’s first term. Now, the president is attempting to cement it.

Among the steps that Trump has taken so far:

Making the government a major shareholder of so-called national champion firms, such as Intel and U.S. Steel, to shore up the manufacturing base. Both companies have lost ground in recent decades, even with extensive efforts to engineer a turnaround. The administration has also floated taking a big stake in major defense contractors, such as Lockheed Martin.

Establishing more public-private partnerships in sectors critical to national security.
One example: A multibillion-dollar agreement with MP Materials to create a mine-to-magnet rare earths supply chain.

Imposing and threatening higher tariffs, hoping to strong-arm supply chains back to the U.S. Case in point, biopharma — one of the many industries facing higher duties — has pledged at least $292 billion to expand U.S. manufacturing in the past six months.

Most of the president’s moves have a national security angle.
The decline of the U.S. manufacturing base is one of Trump’s long-running concerns. Moreover, he has so far focused primarily on industries where ongoing competition with China is a concern. Beijing now dominates “traditional” manufacturing industries like steel and is increasingly making advances in high-tech areas, including semiconductors.

His policies are also limited to where the White House has clear leverage, such as extensive federal subsidies (Intel) or a pending merger approval (U.S. Steel). The big question now is how far the administration ultimately plans to go. For now, it’s signaling clear limits in its intentions, focusing mostly on manufacturing. Case in point, federal officials say that they have no plans to take a stake in Nvidia, a chipmaker, which, unlike Intel, outsources all of its manufacturing to other firms.

The risk of a legal backlash grows if Trump pushes further. For example, if the administration begins to regularly require companies to give Uncle Sam shares as a condition of receiving government contracts, as well as permits and licenses, lawsuits are highly likely. The White House could see its strategy blow up sooner than that if the courts nix its current authority to impose across-the-board tariffs.

Also unclear: How effective this strategy will be. Intel will be a key test case. More federal involvement could help the struggling chipmaker land more customers, or it could worsen the company’s long track record of corporate mismanagement.

Trump’s policies are not unprecedented, but their permanence is unusual in modern times. For example, Uncle Sam temporarily took ownership of GM in 2009.

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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To help you understand the trends surrounding AI and other new technologies 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…

AI is on the cusp of going mainstream. By next year, more money will be spent globally on software with generative AI than on software without it, according to Gartner, a technology market research company.

This year, nearly every major software company will have a generative AI feature in all their products, or will have plans to roll them out this year or next, noted John Lovelock, an analyst at Gartner, in a recent presentation.

Spending on generative AI software in 2026 will be nearly $400 billion globally, compared with $282 billion on traditional software, predicts Gartner. By 2028, those figures will be $700 billion and $188 billion. AI-heavy software landed $18 billion in 2023, the first full year the technology was available to the masses. OpenAI’s ChatGPT, a text-generating AI chatbot, was released to the public in November 2022.

The trend is rapidly putting powerful AI features in the hands of millions of people. For example, Adobe Photoshop’s Generative Fill lets users select a portion of an image to add anything, such as the perfect water drop on a flower. Microsoft’s CoPilot lets users create slideshows by picking a template, providing a text outline and letting AI do the rest. Want to tweak a slide? Simply write a suggestion to Microsoft’s AI chatbot. AI is also becoming prevalent in software for analytics, customer relationship tools and supply chain systems.

The deployment of AI brings both opportunity and risk for businesses. The companies that are fastest to harness productive uses will have an edge, including workers who figure out how to use AI creation tools to produce text, images, charts, computer code and more, or to better analyze data, images or written research.

But businesses rushing to use AI without a plan could lead to damaging missteps, ranging from wasted hours to security threats. Plenty of AI tools won’t be fully baked and won’t help productivity much at first. Companies need a clear plan and set of guidelines for generative AI before taking the plunge.

Meanwhile, consumers are seeing AI seamlessly make its way into popular apps and websites, whether they want it or not. Facebook and Instagram users can tap Meta’s AI chatbots to answer questions or generate images. Alphabet’s CEO Sundar Pichai recently said that Google’s AI Overviews, its new AI search tool that provides detailed explanations to Google search queries, “are one of our most popular Search features ever.”

Rapid adoption of generative AI holds a lot of promise for the economy, along with peril for businesses that face disruption and workers who fear displacement. However, that doesn’t mean the fallout will happen overnight. Even with AI getting rolled out at an unprecedented pace, expect the widescale impact to take place over years or even decades. The AI age is just getting started.

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Intel (INTC) stock is bouncing between positive and negative territory Friday as Wall Street weighs the embattled chipmaker's top- and bottom-line beat for its fourth quarter against a weaker-than-expected outlook for its first quarter.

In the three months ending December 28, Intel's revenue decreased 7.4% year over year to $14.3 billion. Its earnings per share (EPS) slumped 75.9% from the year-ago period to 13 cents.

"The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance," said Intel interim co-CEO and CEO of Intel Products Michelle Johnston Holthaus in a statement.

Holthaus added that Intel's "renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers."

The results beat analyst' expectations. Wall Street was anticipating revenue of $13.8 billion and earnings of 12 cents per share, according to CNBC.

For the first quarter of its new fiscal year, Intel said it expects revenue in the range of $11.7 billion to $12.7 billion and earnings of approximately zero cents per share. This is well below the $12.9 billion in revenue and 9 cents per share in earnings analysts are calling for.

"Our Q1 outlook reflects seasonal weakness magnified by macro uncertainties, further inventory digestion and competitive dynamics," said Intel interim co-CEO and Chief Financial Officer David Zinsner in a statement. "We will remain highly focused on execution to build on our progress and unlock value."

David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, says for him, the person who will be tapped as Intel's new CEO is more important than this print. "At the end of the day, it's hard to get a new direction for the firm if we don't know who is at the helm," he notes.

Is Intel stock a buy, sell or hold?

Intel's woes both on and off the price charts have been widely discussed across Wall Street. As for its share price, the former Dow Jones stock is down 53% over the past 12 months vs the S&P 500's 24% gain. Unsurprisingly, analysts are firmly on the sidelines when it comes to the semiconductor stock.

According to S&P Global Market Intelligence, the average analyst target price for INTC stock is $22.55, representing implied upside of nearly 14% to current levels. Meanwhile, the consensus recommendation is Hold.

Financial services firm Oppenheimer is one of those with a Perform rating (equivalent to a Hold) on the large-cap stock.

"Intel remains largely tied to PC growth, and our relatively bearish stance reflects our belief that the PC market has begun a secular decline,”" says Oppenheimer analyst Rick Schafer. "We remain constructive on the data center outlook for now but remain cautious of PC unit growth and associated revenue growth."

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To help you understand how AI and other new technologies are affecting energy consumption, trends in this space 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…

Artificial intelligence will affect everything from drug discovery to military strategy, and will boost productivity, automate work and disrupt industries.

Here’s a look at big opportunities of generative AI, tech that responds to plain English (and other prompts) to create text, audio, images, video, computer code and more. We highlight the looming challenges, too.

The big AI bet

Astronomical tech spending is laying the foundation for the coming AI age. Tech giants’ capital expenditures have exploded since the launch of ChatGPT, OpenAI’s AI chatbot, in 2022, and heated competition will push spending higher. The combined yearly capital expenditures of Amazon, Google, Meta and Microsoft will soar past $300 billion in 2025, up from $154 billion in 2023, according to estimates from Morgan Stanley Research.

Most of the money is for Nvidia’s AI chips, the graphics processing units (GPUs) for huge cloud data centers owned by those tech giants and others. Other spending is for memory chips, networking gear and related data center tech, boosting Dell, Cisco, Oracle, Arista Networks, SK Hynix, Micron, Marvell and others.

The frenzied spending has sparked fears of an AI bubble, à la the late-1990s dot-com debacle. Today’s pricey AI requires lofty returns on investment to pay off. Though a correction or more painful period may occur, tech giants have massive cash piles and user bases to weather ups and downs in a decade-long AI journey. They are betting on a shift to the next big tech platform, as important, if not more, than the transition from PCs to mobile phones, which makes moving fast imperative.

Green shoots are already emerging. Microsoft-backed OpenAI has more than 300 million weekly users for its chatbot. Meta has 600 million AI users on its apps and other tools and says AI is improving ads and content suggestions. Big Tech companies are seeing fast-growing cloud sales for AI computing and tools. Consulting firm Accenture has already booked $3 billion in AI sales. AI start-ups are scoring users quickly. But the real promise is long-term. For example, OpenAI expects to lose billions yearly until it finally projects a profit in 2029 on an astounding $100 billion in yearly sales, according to a report by the New York Times.

Harnessing novel tech

Generative AI stems from huge amounts of data and computing power, using the brute force of GPUs on a mountain of internet and other data. The AI systems are known as large language models that learn patterns in language to predict the next word, enabling remarkably complex and humanlike responses. The inner workings of these digital neural networks are not fully understood. Flaws, such as errors and unreliability, are still common. But expect steady improvements.

Among the companies building leading AI models: OpenAI, Anthropic, Meta, Google, Mistral AI, Cohere, Amazon, xAI and Stability AI. It costs hundreds of millions of dollars to get AI models to work, a process known as training, and takes months of constant data center computation on hundreds of billions of words or other data. That cost will go into the billions with an ever-growing demand for computing power.

AI's growing physical footprint

AI software is backed by physical infrastructure. Start with Nvidia’s dominance, with millions of its high-end GPUs, costing $30,000-$40,000 each, in data centers. Nvidia’s lead is poised to last for years, as its proprietary hardware and software are best in class. The company’s revenue is forecast to hit nearly $200 billion per year in its 2026 fiscal year, up from $27 billion in fiscal 2023, according to Morningstar.

Competitors are trying to find Nvidia alternatives. Amazon, Meta and Google are building their own silicon. AMD and Intel have AI chips. “In the long run, we expect tech titans to strive to find second-sources or in-house solutions to diversify away from Nvidia in AI, but most likely, these efforts will chip away at, but not supplant, Nvidia’s AI dominance,” writes Brian Colello, Morningstar strategist, in a recent report on the company. Nvidia won’t stop improving as it seeks new customers in anticipation of cooling sales.

U.S. data center growth is booming, reaching a pace of $30 billion in private spending this year, up from $12 billion in 2022, according to Census data. Northern Virginia is by far the largest market, but rapid growth is spread across the U.S. in states such as Iowa, Idaho, North Dakota and Texas. Examples of the trend include Meta investing $10 billion in a new 4 million sq.-ft. facility in Louisiana, and xAI planning to expand its Memphis, Tennessee, data center to 1 million GPUs.

AI data centers are huge energy hogs, so expect soaring electricity demand. Data centers could consume up to 9% of U.S. electricity generation by 2030, more than double today’s amount, says energy research outfit EPRI. To achieve this will require tens of billions of dollars of investment in energy and grid expansion. Data centers will spur demand for reliable power, especially sourced from natural gas. Set to benefit: Constellation Energy, Vistra, ExxonMobil, Entergy and Talen Energy.

Projected energy needs are so big that tech giants are serious about using nuclear to power nearby data centers. Google wants to add 500 megawatts of nuclear energy with Kairos Power’s small modular reactors by 2035. Amazon has similar agreements in Virginia and Washington and is investing in nuclear firm X-energy. Meta has a proposal to add 1-4 gigawatts of nuclear capacity by the early 2030s. In a $1.6 billion deal, Microsoft partnered with Constellation Energy to restart a Three Mile Island reactor. Data center operator Equinix has signed a deal with microreactor maker Oklo.

Even with big energy investments, power shortages will be a bottleneck for AI development. Chips are sure to get more energy-efficient, but not fast enough to curb demand in the near term. Nuclear won’t make an impact until the 2030s.

AI takes hold

For an early sign of what’s to come, look at top AI models that are emerging fast. The tools can create stunning virtual 3D worlds, lifelike voice assistants, Hollywood-like movies, full-length books and more. Google’s recent Genie model can create 3D video games, animations and prototypes by inputting simple text or images, such as writing “Show me a wizard walking through an ancient forest.”

OpenAI, Google, Amazon and others are regularly releasing newly improved tools, from low-cost ones for mobile devices to expensive ones with high-end performance. Meta’s top AI models are open-source, so they are freely available, a contrast with the others’ proprietary efforts, spelling even more competition and choices.

The tech is quickly being embedded in everyday apps and services, including Microsoft 365’s suite of word processing and other apps, web browsers and mobile operating systems from Apple and Android. The tools can write emails, summarize documents, edit photos, create presentations, answer questions, etc.

Unlike social media and web search, the business model can’t be free and reliant on ads because building leading-edge AI is so expensive. Subscriptions are a top option, especially for business users wanting powerful AI for specific tasks. OpenAI announced a $200-per-month subscription for its top AI model, for example.

AI start-ups keep scoring huge sums based on the disruptive potential to shake up entire markets, such as online search, and take on incumbent services, such as sales software. Among the start-ups with valuations in the billions are Glean, Hugging Face, Databricks, CoreWeave, Safe Superintelligence, Poolside and Liquid AI. Venture capitalists and large companies are among the investors. Another example: Tenstorrent recently raised $700 million to build more affordable advanced AI chips.

The race to super AI

Is AI on the path to superintelligence? A lot of top researchers think so. Many companies’ goal is creating so-called artificial general intelligence, an AI that cracks the code of human intelligence, and then improves upon it. OpenAI defines AGI as “highly autonomous systems that outperform humans at most economically valuable work.” Others say it’s a Ph.D.-level virtual genius.

This ill-defined inflection point has an uncertain timeline, which ranges from next year to sometime in the next decade, or being delayed indefinitely, say its advocates.

In theory, AGI poses endless possibilities but also dire existential risks. The promise includes rapid productivity gains and booming economic growth, as scientific discovery is accelerated to cure cancer, solve nuclear fusion, etc. Dangers include self-aware AI going rogue, starting a war or even ending humanity.

Take AGI talk seriously, but with a healthy dose of skepticism. AI hype is partly at play, though the race to AGI will be a driving force for years to come. Past AI hype has fallen flat and decades of research have seen fits and starts. AGI isn’t required for amazing AI tech emerging from steady advances. The pressing risk for society is how humans decide to use powerful AI.

The emerging use cases

There’s a rapidly growing list of uses for generative AI across industries. It will become a powerful tool for knowledge workers. Widely available tools can already transcribe virtual meetings, analyze company data, find cyber threats, research new markets and more. Users interact with AI chatbots like web search typing text to get responses. More questions or commands can refine the results… “provide more details,” “simplify the text for a nonexpert,” “what am I missing?” etc.

There’s an explosion of AI apps and business adoption is ramping up, though it will be a bumpy ride finding the best-use cases and ways to train workers.

Specific areas where AI will gain traction:

• Information technology. Writing and debugging computer code is one of the top uses to boost productivity. Users can paste sections of code to check for errors or input text to build an app. Among the vendors are GitHub, Codeium, Cursor, Harness, All Hands and Factory.
• Media and entertainment. Create a full-length film from a text description. Hollywood will let fans personalize movies, simply entering something such as, “Make a Superman film about sharing, suitable for an 8-year-old,” into a generative AI tool. Movie special effects will be easier. Ditto, commercials, video games, etc. AI tools include Runway, Midjourney, Canva, Pika and Ideogram.
• Retail and advertising. Product descriptions on websites can be automated. Small businesses can cheaply and easily generate high-quality video ads, image ads or marketing text. Facebook is already seeing lots of small firms using its AI ad tools.
• Education. Teachers can create lessons, study guides and essay questions. Ditto for students, who can get bullet points from a long text or help with an essay. Personalized AI tutors such as Khanmigo break down complex topics step by step.
• Healthcare. Tools can transcribe audio of patient visits, send messages or automate notetaking. They can streamline required reporting or help with diagnoses. AI tool Whisper is already widely used. Others include Abridge, Forcura and SmarterDx.

There are many other areas, including legal, finance, pharma, real estate and publishing. AI can pore through scientific papers for insights, or make models of drug molecules. It can give suggestions to deal with a mountain of regulations and compliance tasks.

The Holy Grail is autonomous AI assistants that can do complex work. These “agents” will take control of a computer to pull up documents and websites to book hotels, schedule meetings, do work research and more, completely on their own, while keeping the human in the loop. They’ll call customer service for any issues, and AI may even talk to other AI. Assistants may become intimate virtual friends who understand tone and mood. And every worker could have a tireless assistant.

Intensifying global competition

When it comes to global AI competition, the U.S. has a dominant lead by almost every notable measure, including investment, leading-edge AI systems, data centers, start-ups and jobs, according to a Stanford University AI Index Report. China ranks second in recent power rankings, but as an example of our edge, the U.S. had nearly nine times the private investment in 2023. Rounding out the top 10 rankings: the U.K., India, United Arab Emirates, France, South Korea, Germany, Japan and Singapore.

Still, Chinese tech giants are rapidly launching and improving AI models, including ones from Alibaba, Baidu, ByteDance, Huawei and Tencent. Those tools are already used by hundreds of millions of Chinese users and lots of Chinese firms. No doubt such tech is being widely tested and used by the Chinese government.

The U.S. Dept. of Defense is planning a military AI arms race with China, spurring a flurry of activity by the Pentagon that will only accelerate. There are even concerns China could beat the U.S. to an AGI-type breakthrough. In 2023, the DoD launched a generative AI task force and has since unveiled projects for military chatbots that can assist with acquisitions, sift through intelligence, answer research questions, analyze data, provide insights for decision-making, etc.
Other ideas: Using AI for autonomous weapons, virtual assistants on the battlefield, tracking terrorist activities, cybersecurity defenses and satellite imagery analysis.

Big defense contractors and start-ups are racing to build military AI tools. Lockheed Martin and Leidos are working on secure software products. Anthropic, Meta, Microsoft, OpenAI and others with leading AI models are aiming for contracts, including through partnerships. For example, big data analytics company Palantir has partnered with Anthropic to provide AI to U.S. defense and intelligence agencies to process huge amounts of data, uncover patterns, streamline documents and more. Other vendors in the military market include Shield AI, Anduril, Scale AI, Pryzm and Ask Sage.

Expect military and government leaders to express rising levels of concern on both the risks of using AI and the risks of foreign adversaries embracing the tech. Military leaders are worried about unreliable or inaccurate AI-generated responses, so they’ll tread lightly before relying on AI-generated insight for high-level decisions. The Pentagon’s research arm will spend billions of dollars rigorously testing AI for reliability and trustworthiness. Federal efforts to conduct AI safety tests in classified settings are underway, such as identifying how much info AI models have about nuclear weapons and whether it presents a pressing national security risk.

The many looming challenges

Of course, this breakthrough tech brings a myriad of knotty challenges.

Generative AI will be used for propaganda and to interfere in democracy, since it’s so easy, fast and cheap to create a tsunami of convincing AI propaganda, including text, images, videos and audio. For example, China meddling in Taiwan’s elections. Or Russia having an easier time launching cyberattacks via AI-created e-mails.

AI advances could hit roadblocks. Energy and chip shortages may happen. Companies are running out of data on the internet to train models. There are worries that AI progress may stall as current methods hit a wall. Many worry about the risk of onerous regs slowing progress, spending drying up or looming AI talent shortages. Uses that boost productivity could take longer than expected to gain wide adoption.

Other top concerns relate to privacy while using AI, intellectual property, cybersecurity and misinformation from AI that has gobbled up data with little to no oversight, as well as job losses from AI automation and mindless AI spam flooding the internet.

But many of these problems have solutions and they don’t negate AI's potential.

This forecast is from the team at The Kiplinger Letter, which has been running since 1923. It 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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Intel (INTC) stock is one of the best Dow Jones stocks on Friday, second only to Amazon.com (AMZN) which is rallying on its solid earnings report. The positive price action comes after the chipmaker reported mixed results for its third quarter but issued a strong outlook for the fourth quarter.

In the three months ended September 28, Intel's revenue decreased 6.3% year over year to $13.3 billion. It reported a net loss of 46 cents per share compared to net earnings of 41 cents per share in the year-ago period.

"Our Q3 results underscore the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency," said Intel CEO Pat Gelsinger in a statement. "We delivered revenue above the midpoint of our guidance, and are acting with urgency to position the business for sustainable value creation moving forward."

The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $13 billion and a net loss of 2 cents per share, according to MarketWatch.

However, sentiment turned positive toward Intel when the company provided its outlook for the fourth quarter. Intel said it expects to achieve revenue in the range of $13.3 billion to $14.3 billion and earnings of approximately 12 cents per share, which came in ahead of expectations. 

Wall Street is forecasting revenue of $13.7 billion and earnings of 8 cents per share for Intel's fourth quarter, according to Yahoo Finance.

"The actions we took this quarter position us for improved profitability and enhanced liquidity as we continue to execute our strategy," Gelsinger said. "We are encouraged by improved underlying trends, reflected in our Q4 guidance."

Is Intel stock a buy, sell or hold?

Intel's troubles have stretched to the price charts, as well. Shares of the large-cap stock are down 53% for the year to date on a total return basis (price change plus dividends), making it the worst Dow stock of 2024 so far. 

And Wall Street is on the sidelines when it comes Intel. According to S&P Global Market Intelligence, the average analyst target price for INTC stock is $24.72, representing implied upside of 6% to current levels. Meanwhile, the consensus recommendation is Hold.

Financial services firm Needham is one of those with a Hold rating on INTC stock.

While Intel's third-quarter revenue results were better than expected, accelerated foundry development is weighing on near-term margins, says Needham analyst Quinn Bolton. 

"We rate INTC as a Hold due to its elevated valuation, falling revenue estimates, increasing competition (in core and non-core markets), and distant Intel Foundry Services revenue contributions, which we believe are all setting up for a more difficult road ahead," the analyst adds.

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To help you understand what is going on in the tech sector and beyond, 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 publish many (but not all) of our forecasts a few days afterward online. Here’s the latest...

It was never going to be easy. But Intel’s latest problems still caught the company, and Wall Street, off guard.

Disappointing revenue and a weak earnings outlook led to the drastic plan to eliminate 15,000 jobs, cut $10 billion in costs in 2025, and suspend the quarterly dividend. In a company memo, CEO Pat Gelsinger pointed out the stark reality that sales were $24 billion higher in 2020 than they were last year, while headcount is 10% higher than then.

The problem was summed up by Morningstar analyst Brian Colello in a recent post: “Even though Intel is doing the proper work to focus on leading-edge chip manufacturing, it appears that many of its customers in various end markets might be leaving Intel behind.” 

The frenzied AI investment from Alphabet, Amazon, Meta, Microsoft and others took off faster and will last longer than Intel and others expected. Intel was already losing market share in traditional data center chips. Now the AI boom has crowded out Intel even more, and there’s little sign that will change, as Nvidia’s must-have AI chips continue to gain steam.

Intel’s success or failure is bigger than one company. The chip giant is at the heart of America’s new industrial policy to fend off competition from China and bring chipmaking back home. The federal investment is on top of massive spending by Intel to build new manufacturing facilities, for both its own chips and – for the first time – for outside customers, including some of its own rivals.

Intel could eventually give companies such as Apple and Nvidia an alternative to Taiwan Semiconductor Manufacturing Company, Taiwan’s dominant chipmaker, which builds almost all leading-edge chips. Intel itself has had to outsource production of its top chip designs to TSMC, a clear sign of how much the once-dominant chip giant has stumbled. 

If Intel can build a successful manufacturing business for external customers, it would lessen disruptions in global supply chains, and assuage fears that China might invade Taiwan in the not-too-distant future. A revitalized Intel would give chip designers options, rather than being forced to accept TSMC’s technology and prices and hope that nothing happens to threaten Taiwan’s security. It would also meet the growing capacity demands of what will be a $1 trillion chip market by the early 2030s.

“The finish line is within sight,” CEO Pat Gelsinger said to analysts last week, referring to the technology transition at the 56-year-old company. 

Recall that before the bold rebuilding plan launched in 2021, some investors were calling for Intel to ditch manufacturing entirely and focus solely on chip design, which would have been a drastic change for a company that tightly integrates and benefits from both phases of the process. It also would have left the U.S. with no leading-edge chip manufacturer and cemented TSMC’s virtual monopoly on high-end chipmaking.  

Here are some key takeaways for the next couple of years:

This isn’t the last shoe to drop at Intel. The current round of cost-cutting affects all divisions, but it’s likely that Intel will have to make harder choices, including potentially dropping bigger projects. CEO Gelsinger likens this recent decision, and the overall Intel turnaround plan, to the company’s painful decision to exit the memory chip business 40 years ago. Amid unrelenting competition, the hefty cost cuts risk axing R&D projects that might yield the next big thing for Intel.

Congressional scrutiny is likely, as is stepped-up criticism of U.S. industrial policy. With the federal government committing $8.5 billion to Intel through CHIPS Act subsidies, expect members of Congress to question the layoffs and cost cuts. Gelsinger reiterated that the subsidies are based on hitting manufacturing milestones, which he still expects to hit. Still, there could be more delays for planned projects, such as Intel’s new megaproject in Ohio, which could set off congressional inquiries and further weigh on the beleaguered company. 

It won’t happen anytime soon, but expect more calls to split Intel into two publicly traded firms: One company that designs leading-edge chips, and another focused on manufacturing chips for outside customers. The turnaround plan launched in 2021 created those two business lines, but Intel continues to say it’s essential to have both under one roof. Historically, Intel has thrived from both designing and building chips, but investors could push harder for a split to unlock profits. However, such a drastic move is unlikely in the near term, as it would devastate Intel’s strategy to regain chip leadership. 

There are some bright spots in the near term. The company has already shipped 15 million units of its AI PC chips and expects to hit 40 million this year. Its latest AI accelerator, which will compete with Nvidia’s product, comes out later this year and will grab at least some market share among AI data center chips. And while it doesn’t have an overall lead, Intel does have a cutting-edge manufacturing capability.

Much of the bold turnaround plan is on track, including doubling down on manufacturing and catching industry leader Taiwan Semiconductor Manufacturing Company. Intel has leapfrogged manufacturing process technologies in a compressed timeline and installed the latest fabrication tools. The company still estimates it will make over $15 billion in yearly revenue from external chip customers by 2030. A promising sign would be if Intel announces Nvidia, Apple or other big names as customers for its chipmaking business.

Intel’s strategic importance, for the U.S. and other nations, gives it a backstop of support. The chipmaker is one of only three firms capable of leading-edge manufacturing, along with Samsung and TSMC. With the U.S. and its allies looking to diversify the supply chain beyond TSMC, there’s built-in support from Western nations and customers looking for a reliable alternative. Still, Intel has to deliver best-in-class manufacturing and prove itself to early customers.

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.

To help you understand what is going on in the economy, 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… 

Your electric bills are no doubt up a lot. Unfortunately, we see no relief from that, as electricity demand rises to its highest pace in years, and state and federal officials push for a bigger role for renewable energy in the nation’s electric grid. 

After roughly a decade of slow rate rises, electric prices have shot up since 2021. Households have seen a 24% increase from April 2021 to April 2024, a shock for many customers, and a contributor to inflation. 

Utilities are expecting a pickup in demand, especially due to new energy-hungry data centers. In 2022, they were forecasting electricity consumption to rise by 2.6% over the coming five years. But now, they are projecting 4.7% growth in the next five years. 

Data centers whose chips run artificial intelligence are especially energy-intensive, and more are coming. Data centers, in general, account for 4.6% of demand. By 2026, that figure stands to rise to 6%. Meanwhile, more appliances and home systems are switching from natural gas to electricity, and more electric cars are plugging into the grid. Booming construction of chip plants and other high-tech manufacturing facilities is also lifting consumption. For instance, new Intel chip plants in Ohio are expected to tax the Midwest’s grid. 

Rising demand is running into supply constraints
The switch to electricity generated from solar panels and wind turbines requires a lot more transmission lines and other infrastructure to connect than conventional, centrally located power plants. Sunshine and wind are free, but the panels, turbines, copper wires and transformers needed to harness them are expensive. Plus, their intermittent generation patterns require some form of backup power. (Round-the-clock power sources like geothermal and nuclear are increasingly prized by data center owners that want stable supplies.) 

What this all adds up to is higher rates on your future electricity bills, unfortunately. How much higher depends on a lot of factors, such as your region, the price of natural gas (the leading fuel source for generation) and how quickly government officials try to ramp up renewable power. But to be safe, we recommend that you plan on your recent rate increases continuing for the next few years. 

What you can do to save on energy bills
Consider efficiency upgrades where feasible. What exactly that means depends on your home or business’s energy needs, which you know best. But we advise taking a fresh look at any efficiency or conservation ideas. Investments that weren’t cost-effective when power rates were lower may make financial sense now. Homeowners, consider an energy audit to help find the best savings, such as tips on insulation. Note that such audits can qualify for a $150 home improvement tax credit. Also, it may pay to switch from an electric appliance or system to gas, if you have access to cheap natural gas and the cost of installing gas lines is bearable.

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. 

To help you understand what is going on in the tech sector 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…

The big buzz in the robot industry? The potential of artificial intelligence to rapidly improve robotics, from industrial models in factories to robots in hospitals, hotels, homes, etc. Here’s a look at some exciting robot trends.

Demand for industrial robots is on the rise. Over 600,000 will be installed this year around the globe, a record. China is the largest market in the world by far, installing nearly 300,000 in 2022. Next is Japan with 50,000, then the U.S. (40,000), South Korea (31,000) and Germany (26,000). 

Global competition for robots is revving up. There are national efforts to increase robot adoption in order to boost productivity, amid labor shortages and efforts to bring more manufacturing home. Those tailwinds bode well for robotmakers, such as top sellers Fanuc, Yaskawa, Kuka and ABB. There are lots of smaller firms and start-ups, too. 

There are big hopes for emerging AI tech. The idea: Faster training and more skills for robots by using the generative AI behind ChatGPT and similar tools. Efforts include ways to program robots with plain written English rather than complex code, and using AI systems to have robots learn by observing. Expect steady improvement rather than breakthroughs, but the efforts to use AI on robots bear close watching. 

AI will also improve computer vision and other areas. Specialized computer chips for robots will help. Nvidia recently unveiled a new chip, along with AI software, for humanoid robots. AMD, Intel and Qualcomm also have systems designed with robots in mind. 

More-capable robot coworkers are coming to factories, warehouses and even small shops. Collaborative robots, or cobots, can work alongside humans for a range of tasks — screwdriving, painting, sanding, polishing, packaging, grinding, testing, gluing, soldering, and welding. Cobots from Universal Robots and others are stronger, can have two arms and can even have wheels to move. 

There’s a push for humanoid robots by Agility Robotics, Boston Dynamics, Figure AI, Sanctuary AI and others. Testing is underway in real settings, but the tech will take many years to improve. China wants to mass-produce humanoids soon, too. More than job displacement, the near-term challenge will be too few robots for manufacturers and other industries that could quickly benefit from automation. To help, the industry is working hard to make adoption easier and cheaper.

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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To help you understand what is going on in the technology and manufacturing sectors 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…

In addition to the exploding sales of artificial intelligence chips this year the rest of the semiconductor industry continues to look good — either with solid sales growth or sales set to rebound in the second half. AI chip sales are only about 5%-10% of the $600 billion industry. 

Inventory levels are back under control for memory chips, after a huge glut last year. Supply chains are stable, for the most part. And there’s strong order growth, a good predictor of future sales. It doesn’t seem as though anything will stop Wall Street’s love affair with chip firms, especially after Nvidia’s recent results beat expectations. Even chipmakers in the automotive and industrial space, now slogging through weak sales, should rebound in sales by year-end. That’s expected to reignite investor interest. Notable risks aren’t likely to dim the outlook but continue to loom, such as geopolitical tensions, the war in Ukraine and U.S. political dysfunction. 

Keep an eye on India’s effort to expand its nascent semiconductor industry, according to a recent report by the Information Technology and Innovation Foundation — a tech think tank. The report stems from a federal tech initiative to work with India. 

Among the many factors in India’s favor are massive government support, a robust chip workforce, a huge domestic market and competitive labor costs. Many U.S. chip firms already have R&D offices in India, including Intel, Nvidia, and Qualcomm. 

Recent developments include memory chipmaker Micron setting up shop, with an assembly and testing facility opening in 2024. AMD is investing $400 million over five years. Plus, the government recently OK’d India’s first major chipmaking plant. A rising Indian chip sector would ease U.S. reliance on Taiwan and China. 

Despite promising signs, there are many challenges, ranging from taxation and regulations to transportation and energy. Still, India seems serious about chips

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 managed to brush off a shaky start Friday and climb higher into the close. 

Investors had plenty to consider. In addition to the latest batch of corporate earnings, a steady batch of economic data was released throughout the morning. Most notably was the personal-consumption expenditures price index, which, ahead of the Federal Reserve's policy meeting next week, showed inflation continued to cool in December. 

Intel (INTC) stock plunged 6.4% today after the chipmaker said fourth-quarter earnings fell 92% year-over-year to 10 cents per share, well below the 20 cents per share analysts were expecting. Revenue fell short of consensus estimates, declining 32% year-over-year to $14.0 billion. The company also forecast lower-than-anticipated Q1 earnings and revenue. Intel CEO Pat Gelsinger cited "rising interest rates, geopolitical tensions in Europe and COVID impacts in Asia, especially in China," as well as deteriorating demand, as reasons for the weak earnings and guidance.

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On the economic front, the Commerce Department said earlier that the personal-consumption expenditures (PCE) price index – the Fed's preferred measure of inflation that tracks consumer spending – rose 5% year-over-year in December, a slower pace than the 5.5% increase seen in November. Core PCE, which excludes volatile energy and food prices, was up 4.4% on an annual basis, the lowest increase since October 2021. The data also showed that consumer spending during the key holiday month was down 0.2% from November, while personal income was up 0.3%.

"Incomes are doing just fine, but falling spending indicates that higher interest rates and inflation are taking a bite out of consumer spending," says José Torres, senior economist at Interactive Brokers. "Personal savings have increased significantly from a low level, as a strong job market and contracting spending in tandem have boosted reserves in the short-term."

While the major market indexes spent much of the early morning in negative territory, they moved higher after the release of the University of Michigan's upwardly revised consumer sentiment index for January (64.9 vs. preliminary reading of 64.6). The Nasdaq Composite ended the day up 1.0% at 11,621, the S&P 500 rose 0.3% to 4,070, and the Dow Jones Industrial Average added 0.1% to 33,978.

Fed Meeting, Tech Earnings on Tap

Next week's going to be a big one on Wall Street. For one, the Federal Reserve will hold its first policy meeting of 2023. The market is expecting the central bank to raise its benchmark interest rate by 25 basis points (0.25%). 

With this outcome widely anticipated, "focus will be on any changes to the Fed's forward guidance for the path of policy," says Matthew Luzzetti, chief U.S. economist at Deutsche Bank. "The statement is likely to keep the reference to 'ongoing' rate hikes. Although the FOMC might be inclined to adjust this language as it approaches a pause, doing so at this meeting has little upside and risks widening the gap between the market and the Fed, while also leading to an undesirable easing of financial conditions."

It will also be the busiest week of fourth-quarter earnings season so far. Big Tech will be in the limelight, with Facebook parent Meta Platforms (META) and iPhone maker Apple (AAPL) among those reporting. "For all tech companies, I'm focusing on the qualitative commentary from management teams regarding spending in the second half of the year – specifically from advertising," says David Wagner, portfolio manager at Aptus Capital Advisors. "It feels as if the market is pricing in some optimism for spending in the last two quarters, so it will be important to see if management commentary is synonymous with this expectation." 

Advanced Micro Devices (AMD) is also on the earnings calendar. Despite challenges facing chipmakers, AMD remains one of the best semiconductor stocks, according to analysts. 

Tech stocks led the way higher Monday as investors prepared for a heavy batch of corporate earnings reports due out this week. 

Roughly 20% of S&P 500 companies will release their quarterly results over the next five days, with tech giant Microsoft (MSFT, +1.0%) and electric vehicle maker Tesla (TSLA, +7.7%) among the notable names on this week's earnings calendar. But, the focus was on a big layoff announcement from audio streaming service Spotify (SPOT, +2.1%). 

Today, Spotify said it will lay off 6% of its global workforce, or around 600 employees. In a memo sent to staff, CEO Daniel Ek said the job cuts were an effort to bring costs in line amid a challenging economic environment. This follows in the footsteps of several other tech and communication services companies like Microsoft, Meta Platforms (META, +2.8%) and Alphabet (GOOGL, +1.8%) that recently announced layoffs.

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Salesforce (CRM, +3.1%) was another big gainer today after a report in The Wall Street Journal indicated Elliott Management has taken a "big stake" in the software-as-a-service (SaaS) company. 

Semiconductor stocks were also a pocket of strength. Advanced Micro Devices (AMD, +9.2%) outpaced its peers after Barclays analyst Blayne Curtis upgraded the stock to Overweight from Equal Weight, the equivalents of Buy and Hold, respectively. Curtis said AMD's Genoa and Bergamo platforms will likely take market share away from Intel (INTC, +3.6%), and believes the company could get a boost once Facebook parent Meta Platforms ramps up spending later this year. 

As for the major indexes, the tech-heavy Nasdaq jumped 2.0% to 11,364, the broader S&P 500 gained 1.2% to 4,019, and the blue-chip Dow Jones Industrial Average rose 0.8% to 33,629.

The Safest Vanguard Funds to Buy

Today's price action likely sparked a sigh of relief among investors. However, the fact remains that the major benchmarks are still in a bear market. And amid expectations that the U.S. will enter a recession later this year – Kiplinger, for its part, has the odds of a recession at about 60% – stocks could stay in a downtrend for the time being. 

While it's true that this bear market will eventually end, "investors should not assume that the easy times in the market are coming back," says David Bahnsen, chief investment officer at wealth management firm The Bahnsen Group. "We expect enhanced volatility and a focus on cash flow and quality for the foreseeable future." 

As such, Bahnsen says it is "very important to pursue high-quality assets," like the best dividend stocks. Other defensive strategies included targeting stocks in the healthcare and consumer staples sectors. Investors that want more diversification in their portfolio hedges have plenty of options among the best bear market ETFs. But for those looking for below-average expenses, consider the safest Vanguard funds to own in a bear market. The names featured by Vanguard offer short-term defense across a variety of strategies and come with the investment advisor's low costs to boot.

The past few years marked a wake-up call in Washington, with the pandemic and supply chain shortages, rising competition with China, the war in Ukraine, and, now, the specter of recession. 

Lawmakers are taking a more active role in the economy to bolster critical industries, key technologies, and infrastructure. It’s a sea change in policymaking that will reverberate for years to come, after decades when such direct involvement failed to gain much traction in Congress.

American Industry

Consider infrastructure, tech, and energy spending in the next decade. It adds up to $2 trillion from the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act (IRA). Though the last one passed with only Democratic votes, many members of both parties have come around to this way of thinking to combat China, help businesses, and boost national security. 

Nearly $400 billion is going to energy and climate initiatives via the IRA, to drive down the cost of a variety of noncarbon energy sources to spur production and adoption. Plus, it aims to lift emerging technologies, such as advanced nuclear. 

$53 billion is flowing to homegrown semiconductors: U.S. manufacturing, research, development, and workforce efforts. That includes $2 billion for legacy chips for autos, defense, etc. (The chip shortage has cost hundreds of billions in auto sales.) 

And a plethora of spending will boost American industrial capacity — modernizing the electric grid, electrifying cars and buses, etc., mining battery materials, creating regional technology hubs, and research aimed at commercializing key tech. 

The major trends influencing Washington are affecting the private sector, too. So private investment is also flowing into U.S. industries, based on demand, not Washington directives, for things such as electric vehicles and computer chips. But recent subsidies and incentives now muddy the water some for these markets.

Chips

Uncle Sam’s biggest direct bet: Rebuilding America’s chipmaking prowess. It’s the first major intervention in the industry since the 1980s when Japan started racing ahead. Not long ago, the prospects for a state-of-the-art chip plant in the U.S. were grim. America’s share of chip manufacturing capacity fell from 37% in 1990 to 12% today, in large part because other countries subsidize their industries. 

Early signs of success are already on display, but there’s a long way to go. At least nine new cutting-edge chipmaking facilities are being built across the country in the next five years by Taiwan Semiconductor Manufacturing Co., Intel, Samsung, and Micron. Odds favor more plants coming as yearly chip sales rise to $1 trillion in the early 2030s, from about $600 billion this year, even if sales flag some years. 

Pandemic chip shortages roiled the economy, especially the auto industry. Our overreliance on Asia has spooked U.S. buyers, including the military. Note that Taiwan’s TSMC makes 92% of chips built with the most advanced processes. Even if chips are made in the U.S., they’re likely packaged, tested, and assembled in Asia. 

Cue $39 billion from the feds for domestic production, plus a 25% tax credit for manufacturing and processing equipment, making a big dent in the cost of a plant, which runs to $10 billion-plus. The tax credits will phase out, so chip giants are acting fast.

More Chips

A key place to watch is Licking County, Ohio. Intel's resurgence is at stake and the company is spending $100 million to develop and attract workers. Suppliers Air Products, Applied Materials, Lam Research, and Ultra Clean Technology are already setting up shop in the region based on Intel’s plans to create a “small city.” The new campus, near Columbus, could eventually lead to $100 billion in investment. 

Beyond making chips, investments are supporting other critical areas. Lots of federal dollars are going to research, including to help start-ups get access to advanced plants to fabricate small batches of chip designs so they can try them out. Also, domestic final assembly and packaging, the last fabrication step, now mostly done in Asia, is seeing glimmers of life. Intel is investing in advanced packaging in N.M. SkyWater is developing a Fla. facility. Ditto, Northrop Grumman for defense chips. Others expanding operations or mulling it are Amkor, Promex, and QP Technologies. Meanwhile, Wolfspeed and SK Siltron are building new facilities for the raw materials of chips, focusing on silicon carbide wafers, used for specialty applications, like EVs. GlobalWafers is building a Sherman, Texas, factory to make traditional silicon wafers.

The semiconductor supply chain involves thousands of global vendors. That won’t change. Shifting production to the U.S. will be slow and steady, no matter how committed policymakers are to building up the industry. America will also face off with new chip subsidies in Europe, Japan, China, and elsewhere. 

Delays are possible with new plants. Outright failures can’t be ruled out, as facilities need to run at near-full capacity to turn a profit over the long run. Hard-to-predict breakthroughs could make certain projects or factories obsolete. 

But success…meaning, bringing lots more production home…is a good bet. That shift will be very noticeable in five years as Apple, AMD, Nvidia, Broadcom, Qualcomm, Intel, and others start making leading chip designs in local factories. 

This U.S. shift comes as concerns escalate over China’s meddling in Taiwan and risking the critical supply from Taiwan’s TSMC. Beijing is also pushing hard to build a walled-off chip industry, threatening hefty U.S. chip sales to China. U.S. export controls of chips and chip gear to China only heighten increasing tensions. CHIPs includes $500 million to work with foreign allies to secure chip supply chains. 

That’s why Congress also made a longer-term play with $13 billion in R&D and workforce development to continue to out-innovate China and other nations.

Energy 

With wind and solar accounting for only 11% of U.S. electricity generation, the IRA has incentives to boost solar installations and onshore wind capacity. Early estimates expect the law could boost them by 40% (combined) by 2030, with an extra 155 gigawatts of capacity coming online this decade. For wind, that means nearly 280 GW by 2030, up from 140 now. For solar that's 270 GW by 2030, up from nearly 100 now. Even if these projections prove too lofty, it’s safe to say that more solar and wind will be built because of the new push. 

The total will depend in part on new transmission infrastructure that the U.S. is able to build to better integrate renewables into the existing grid, which is why lawmakers set aside billions for renewables and transmission lines. New high-voltage direct-transmission capacity is viewed as essential to enabling a long-term transition to renewables and away from fossil fuels. 

But U.S. investments in new transmission infrastructure have been paltry, growing about 2% yearly, not keeping up with domestic demand or foreign competition. The U.S. lacks manufacturing capacity and has struggled to build it, due to various legal and regulatory hurdles. Only 23% of transmission projects seeking connection to the grid between 2000 and 2016 ended up reaching commercial operation. Various federal incentives could help.

A lot rests on whether Washington can reform current permitting processes to allow more projects to be completed. Success hinges on Congress taking action. 

Meanwhile, batteries for electric vehicles are getting a big federal push with tax credits for the four stages of battery production: Mining the materials, refining them, building cells, and assembling them into packs to go into vehicles. Plus, EVs will need North American batteries in order to qualify for the full $7,500 tax credit. 

U.S. battery-making capacity is going to grow quickly. One estimate from S&P Global shows capacity growing by a factor of 10 between 2021 and 2025, from about 38 gigawatt-hours annually to about 380. The U.S. share of world capacity would go from about 4.7% to almost 14%. Companies involved include automakers (Ford, GM, and Tesla, to name three) and the big names in battery production (Samsung, LG Chem, and Panasonic). Plant construction is concentrated mostly in the Southeast and southern Great Lakes states — a new “Battery Belt,” some say.

The Risks

America’s return to full-fledged industrial policy brings many risks. Alienating allies, wasting money, and distorting markets, to name a few. All have long been mentioned when the government meddles in the free market in a bigger-than-usual way to support specific industries. For example, China, which heavily subsidizes all sorts of industries, is prone to wasteful spending and is likely hurting innovation with its heavy-handed, top-down approach. 

Government spending can crowd out private investment, hinder profits and produce surpluses, or even gluts, of certain products. To top it all off, supporting an industry can make it reliant on subsidies and less competitive. 

It’s also a big bet on the feds efficiently managing a mountain of money in grants, loans, incentives, and more. While the priority is to move fast, there’s always paperwork, regulations, and procedures that gum things up. Waste, fraud, and abuse for huge programs are inevitable, as are failures. The question is the extent of it. Expect lots of congressional scrutiny for years. 

Still, supporters say the new policies are well-designed, with guardrails to avoid the worst problems of industrial policy. For example, to support the shift from fossil fuels to renewables, the IRA mostly uses carrots rather than sticks, in the form of tax incentives, which proponents say is the best way forward.

Final Thoughts 

This hefty investment in industrial capacity should result in tens of thousands of jobs. A constraint will be finding the right workers. Many of the positions will be for technical, high-skill manufacturing fields — others, for factory jobs. 

Companies will be desperate for workers as new plants near completion. It will be hard for colleges and other programs to keep up, even with new efforts. Expect the issue to spur a renewed battle over immigration. Consider that 40% of high-skilled chip workers were born abroad. Many companies and business trade groups will push for more high-skilled workers via H-1B visas. 

The issue will grab Congress’s attention as the cold war with China continues.

Stocks continued to sell off Tuesday, with the S&P 500 extending its daily losing streak to four. Amid a relatively bare economic calendar, investors' attention continued to be focused on next week's Federal Reserve meeting. Uncertainty over the central bank's next steps regarding monetary policy is impacting price action, particularly following the recent releases of data showing the U.S. economy remains resilient even in the face of this year's aggressive rate-hiking campaign. 

"Market consolidation continues in U.S. equities as investors weigh the odds and impact of future Fed moves against persistent inflation and the threat of recession," says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott. The market will likely remain choppy-to-higher into year-end, "with more emphasis on the 'choppy' part over the near-term," Wantrobski adds, "as benchmarks like the S&P digest recent gains against a still uncertain macro climate heading into the New Year."

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Looking at today's price action, 10 of the 11 sectors finished in the red. Communication services (-2.9%) suffered the biggest drop on weakness in social media stocks Meta Platforms (META, -6.8%) and Snap (SNAP, -6.7%). Energy (-2.6%) was also a notable decliner as U.S. crude futures plummeted 3.5% to $74.25 per barrel – their lowest settlement of the year.

As for the major indexes, the tech-heavy Nasdaq Composite slumped 2.0% to 11,014, the broader S&P 500 Index fell 1.4% to 3,941, and the blue-chip Dow Jones Industrial Average gave back 1.0% to 33,596.

The Investment Case for Intel Stock

Semiconductor stocks had another miserable session, but one notable name had a less-terrible day than its peers. Intel (INTC) shed 2.0%, which wasn't great, but it was still better than fellow chip stocks Advanced Micro Devices (AMD, -4.6%) and Nvidia (NVDA, -3.8%). This comes after the chipmaker on Monday said it is on track to regain market share it has lost to competitors over the years. 

"Whether INTC can catch up on manufacturing remains debatable, but we remain impressed by management's commitment to making the organization far more efficient and cost effective," says UBS Global Research analyst Timothy Arcuri, who has a Neutral (Hold) rating on INTC stock. Arcuri's not alone in his view that Intel remains a "show-me" story, but should investors feel that way too? Read on as we take a closer look at the investment case for Intel stock.

Intel (INTC) stock has been lagging the broader market for more than 20 years, hurt by the rise of nimble competitors, manufacturing delays and the fact that the world's largest semiconductor company missed out on some of the biggest changes in technology of the past couple of decades.

But Intel, a component of the Dow Jones Industrial Average, insists that it's set to turn all that around. The company on Monday affirmed that it remains on target to regain leadership in semiconductor manufacturing.

A multi-year effort to return to the forefront of production technology will allow the firm to reverse market-share losses to competitors such as Advanced Micro Devices (AMD) and Nvidia (NVDA), Intel says. And if that weren't bold enough, Intel even has designs on competing with Taiwan Semiconductor Manufacturing (TSM) in the market for manufacturing chips for other semiconductor companies.

TSM, incidentally, recently became one of Warren Buffett's top stock picks.

Intel is indeed the world's largest chipmaker, with commanding market shares in central processing units for personal computers (PCs) and data center servers. But its business, as we have been reminded many times over the years, is a slowly melting iceberg. PCs, after all, are in secular decline.

True, data centers are an area of growth in a future increasingly powered by artificial intelligence, but investor interest has shifted to firms that make chips for mobile devices and the Internet of Things. In these endeavors, Intel is an also-ran.

In other words, Intel's current strategy is critical to the stock's long-term success. Bulls contend that if the company is able to deliver on its aspirations, it could provide the catalyst INTC stock needs to shake off its multi-decade run of underwhelming returns.

With that as our backdrop, it's probably at least somewhat disheartening to INTC bulls that Wall Street remains very much on the sidelines on Intel stock. As illustrious and widely held as Intel stock may be, it's a "show me" story at best, analysts say.

Past performance, as we all know too well, is not indicative of future returns, but one look at Intel stock's long-term chart is reason enough to be skeptical about the firm's promises. The chipmaker has tried to reverse its fortunes many times before, and yet INTC stock's track record shows only that investors would have been better served putting their capital elsewhere.

Over the past three years, INTC stock delivered an annualized total return (price plus dividends) of -17.2%. The S&P 500, meanwhile, delivered a three-year annualized total return of 10.4%. At five years, INTC stock's annualized total return stands at -5.1% vs. 10.7% for the broader market. 

Things get better when we look back farther, but not by much. Intel stock generated positive annualized total returns over the past 10, 15 and 20 years – but still lagged the broader market by at least 5 percentage points in every one of those periods.

Little wonder, then, that not only does the Street's consensus recommendation on INTC stock stand at Hold, but it's been stuck there for a very long time.

Of the 43 analysts issuing opinions on Intel stock tracked by S&P Global Market Intelligence, seven rate it at Strong Buy, two say Buy, 24 have it at Hold, five call it a Sell and five rate it at Strong Sell. Moreover, Intel stock has held a rating no better than Hold since early 2019.

In other words, analysts as a group haven't been constructive on the name for years. Sadly for bulls, Intel's current strategy hardly has them changing their minds.

Oppenheimer analyst Rick Schafer, who rates shares at Perform (the equivalent of Hold) does a good job summing up Wall Street's lack of enthusiasm for INTC stock.

"Intel remains largely tied to PC growth, and our relatively bearish stance reflects our belief that the PC market has begun a secular decline," Schafer writes in a note to clients. "Intel has stumbled on its technology leadership, falling behind peers as they struggled to transition to 10 nanometer manufacturing."

Susquehanna Financial Group takes an even dimmer view of Intel stock's prospects. Analyst Christopher Rolland, who rates shares at Negative (the equivalent of Sell) downgraded INTC earlier this year from Neutral (Hold). He cites a slew of headwinds, including increased competition in servers and PCs – notably from Apple (AAPL) – as well as a "work-from-home hangover" that's depressing sales of Windows devices. 

Rolland further worries about longer-term pressures on Intel as it "moves to more complex, multi-packaged and smaller geometries, and as increased competition pressures pricing."

Intel stock trades at just 14.7 times analysts' 2023 earnings per share (EPS) estimate. That's cheaper than the broader market. But then the Street forecasts Intel's EPS to decline at an average annual pace of more than 11% over the next three to five years.

It's hard to make a bull case on valuation based on that sort of earnings forecast. Most analysts don't even try to. 

Warren Buffett has said that the problem with most turnarounds is that they don't turn. Berkshire Hathaway (BRK.B), of which Buffett serves as chairman and CEO, actually owned Intel a decade ago. The stake underperformed and he dumped it in fairly short order.

Something tells us Warren Buffett won't be biting on Intel stock amid the chipmaker's current turnaround efforts either.

The infamous Dogs of the Dow strategy is simple: At the start of each year, buy the five (or 10) highest-yielding stocks. Remember, high dividends mean low stock prices. The theory goes that as Dow stocks are some of the largest, best-managed companies in the world, they will, inevitably, recover.

While these dogs may not be the best Dow dividend stocks, they certainly offer a lot of yield. For instance, Verizon's (VZ) dividend, at nearly 7%, rivals the long-term return of the S&P 500. In most instances, the proposition here comes down to getting paid a lot to wait out whatever malaise a company is facing.  

This year's crop of Dogs seems to face thornier problems than in years past. From Verizon trying to time the arrival of 5G, to Intel's (INTC) increasingly perilous position in the chip business to IBM's (IBM) fight for share among trillion-dollar tech giants, these dogs face a steep climb. 

But ultimately, every dog has its day, and the ones that were at the bottom of the heap many times show up at the top. The proof is in the pudding. For the 20 years ended 2020, the Dogs of the Dow strategy returned 9.5% versus 7.5% of the S&P 500, a spectacular beat. It underperformed the S&P 500 in 2021 by 16 percentage points and so far this year, the Dogs are down less than the market at large. 

Absent any dramatic changes, here are five of 2023's Dogs of the Dow.

Data is as of Nov. 18. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in reverse order of yield.

• Market value: $132.3 billion
• Dividend yield: 4.5%

A strong third-quarter earnings report from International Business Machines (IBM, $147.64) in October sent shares up 6%. Though welcome, it feels like Lucy might be yanking the football from Charlie Brown. Again. We've been here before. IBM has been in the doghouse since 2016. That's a lot of yield for investors, but not much growth. Shares of IBM, at about $147, are still below where they started 2018. Hey, they don't call them the Dogs of the Dow for nothing. 

Keep in mind that a decade ago, revenues at IBM were $105 billion, and last year they were $57 billion. It's not that they're caught up selling obsolescing "Big Iron" from a generation ago, but rather shedding lots of businesses and defining their core which now consists of software, consulting and IT infrastructure. There's some chatter that its IT infrastructure group, which accounts for about 25% of total revenue, could be divested, which would take a good chunk out of the $61 billion in 2023 forecasted revenues. 

For investors, that leaves software and consulting as the businesses to watch, which were up 7.5% and 5.4%, respectively, in the last quarter. The core markets these businesses address – cloud computing, consulting and hybrid AI – are growers. Global IT spending is anticipated to rise to $4.6 trillion in 2025, up 5% over 2022, according to research firm Gartner. IBM is poised to increase revenues from this spend, and in this respect, there is an achievable and sustainable path to growth.  However, this growth is likely to be slower and steady rather than rapid and meteoric. After all, Alphabet's (GOOGL) Google and Microsoft (MSFT) are swimming in the same pond. 

Net-net, it's possible that IBM will spend another year in the doghouse. However, waiting it out with a 5% yield, and the financial strength to maintain it, may prove to be alluring for many investors. 

As a footnote, IBM did show an operating loss of $3.2 billion during the last quarter, which might give pause. This loss was attributable to a change in pension operations, resulting in a $6 billion charge that had no impact on the company's cash. For the trailing 12 months ending the third quarter, IBM had free cash flow – cash from operations less capital expenditures – of $7.4 billion, more than three times the $2.1 billion in dividends paid. 

With a lot of overseas business, the historically strong dollar currently delivers a big hit to IBM's revenues, and growth is better than the reported numbers. In its latest earnings report, IBM said it expects revenue growth "above its mid-single digit model," with currency translation presenting a seven percentage point hit. 

IBM's core markets in cloud computing, consulting and hybrid AI, are growers, so there is a path to earnings growth, but with a single digit forecast, it's not going to be fast. 

• Market value: $34.4 billion
• Dividend yield: 4.8%

Walgreens Boots Alliance (WBA, $39.75) has been on a downward trend since 2015 and has been a Dog of the Dow since 2019. 

As with many other retailers, Walgreens is struggling with post-pandemic crosscurrents amid inflation, a perennially shifting healthcare landscape and jittery consumers. WBA's plans for selling its underperforming Boots U.K. business stalled after the company failed to receive attractive bids. In June, it announced its intention to retain the business. 

In addition, online pharmacies are chipping away at Walgreens' market share as consumers are provided a more convenient alternative to buying prescription drugs at brick-and-mortar stores. Amazon.com's (AMZN) entry into the pharmacy sector doesn't augur well for WBA either.  

But aside from its initiative to strengthen its digital transformation to become more competitive in its pharmacy business, Walgreens is trying to make a comeback by restructuring itself into "a consumer-centric healthcare company."

To this end, there has been a flurry of dealmaking at Walgreens. Among the largest is last year's $5.2-billion investment in Village MD, which provides "primary care services" through a variety of outlets. That investment brought Walgreen's stake to 63%. Then in November of this year, Village MD announced its intention to buy urgent care provider Summit Health for $9 billion. 

We've seen this movie before. CVS Health (CVS) went through such a transformative shift, most notably with its November 2018 acquisition of health insurer Aetna for an eye-popping $78 billion. CVS shares have risen about 20% since then while paying a solid 2.3% dividend.  Walgreens, however, has not done anything on the scale of CVS's Aetna deal, but Cigna's (CI) healthcare unit, Evernorth, participated in the Village MD/Summit transaction, which may presage future, strategic deals at Walgreens.

The company is confident these actions will unlock "sustainable shareholder value." They are expecting an adjusted earnings per share (EPS) of $4.45 to $4.65 for the full fiscal year 2023 and raised their 2025 U.S. healthcare sales target from a range of $9 billion to $10 billion to one between $11 billion and $12 billion. From the bottom end of the old range, $9 billion, to the top of the new range is 30%, a big number, so it's fair to assume management is feeling confident. 

Transformations of the kind Walgreens is undertaking take time, and in healthcare, they take a lot of time. Getting paid more than 5% to wait might seem prudent, given the macros driving healthcare. But the devil is in the details, and in healthcare, there's a lot of them. 

• Market value: $123.3 billion
• Dividend yield: 4.9%

Intel (INTC, $29.87) has been one of the most severely hit names in a terrible year for the tech sector. The stock is down 42% for the year-to-date, following a disappointing second-quarter performance where its EPS was off 79% year-over-year, and revenue dropped 17%. Recently reported third-quarter earnings were mixed, neither confirming recovery nor presaging disaster. 

The company has been losing market share to competitors after falling behind Advanced Micro Devices (AMD) in chip innovation and to Taiwan Semiconductor Manufacturing (TSM) in fabrication. Compounding these woes is slowing PC demand. Net-net, rumors and reports of forthcoming layoffs from this tech giant may be well-founded.

The gray cloud hanging over Intel is writ large in the initial public offering (IPO) of its Mobileye Global (MBLY) unit which it acquired for $15.3 billion in 2017. The once ebullient valuation of $50 billion was significantly lowered to $17 billion – just a tad more than what Intel originally acquired it for – when the self-driving car company went public late last month. 

Intel's strategy going forward seems to be doubling down on its manufacturing capability, beginning with its $20-billion project in Arizona for two fabrication facilities. The strategy is to offer its services to produce chips designed by other companies such as Qualcomm (QCOM) and Amazon, among others, to help alleviate supply-chain challenges and to minimize the reliance of U.S. companies on foreign manufacturing. While sound amid surging chip demand, Intel will find a stout competitor in Taiwan Semiconductor, the global leader in chip manufacturing and newest member of the Berkshire Hathaway equity portfolio. 

Of course, all these construction plans consume capital, hence the decline in Intel's free cash flow seen in its second-quarter report. Numerically, it's possible that capital expenditures will squeeze the dividend. Management would be loathed to cut it, but in the uncertain semiconductor landscape, anything is possible. 

While tinkering with the dividend would likely hit shares, if the diversion of funds toward growth pays off, shareholders could be rewarded. After all, putting capital at risk to invest in growth is how capitalism is supposed to work. One wildcard: Intel is expected to be a main beneficiary of the recently signed CHIPS Act to support plans to rescale its manufacturing capability.

Volatility is still a concern in the near term. Shares are trading at 2014 levels. There is a path to growth, but Intel will need to thread the needle. 

• Market value: $35.2 billion
• Dividend yield: 5.6%

Dow (DOW, $50.07) is in the doghouse, and perhaps well it should be given declines and lumpiness in earnings. However, the company might be forgiven in as much as the chemicals business is cyclical. And if you are waiting for the chemical business to come back, getting paid just over 6% is a tenable position for many investors.  

The most recent earnings report from Dow might give investors confidence that it is on the upswing, with the company beating the consensus earnings estimate. However, keep in mind, the total net income was off 55% from a year ago. The nine-month performance was a little more upbeat, with net income off just 14%. Further, it forecast current-quarter sales below expectations and said it expects a $400 million hit to core profit from cost and inflationary pressures. Clearly, Dow sees some bumps in the road ahead. 

Remember, it was just three years ago that Dow was spun out of DuPont (DD), and is still finding its sea legs. Of course, it was just seven years ago that the two merged, with CEO Ed Green promoting the idea that the "transaction is a definitive step toward unlocking higher value." Apparently not, as one look at DuPont's chart shows share prices trading below 2015 levels.

Still, despite the haze and madness that sometimes permeates the executive suite, Dow is well-resourced in ways that may help it through the haze and madness going on in the world right now. 

First, the company puts a bit of effort into touting "feedstock flexibility," which are the inputs to make chemicals, as a competitive advantage, and it's more than management speak. Dow has strategically located its facilities close to low-cost sources. 

In addition, it's invested in the technology to deploy production units, known as "crackers," so that it can quickly adjust to upstream changes with suppliers and downstream requirements from customers. Net-net, Dow is well-positioned to manage rising costs and feedstock bottlenecks, which may materialize in abundance in the coming year. 

Plus, Dow is cutting costs, about a billion in the coming year, which theoretically, should go right to the bottom line. 

Dow just might have enough momentum to achieve the escape velocity from the doghouse. But it will need an assist from the global economy, which may or may not be on tap. 

• Market value: $161.9 billion
• Dividend yield: 6.8%

The last time Verizon Communications (VZ, $38.55) was not among the top five Dogs of the Dow was in 2009. VZ has been in the doghouse so long, the reasonable investor might question whether it will ever get out. The telecom business is tricky, and every time Verizon zigs, telecom zags. The latest example was in 2021 when the company spent nearly $46 billion – more than any other major telecom company – on broadband licenses in anticipation of a 5G world that has yet to materialize. 

At current prices, VZ stock is at 1997 levels. One reason to consider Verizon at the moment is the dividend yield. At current levels, it nearly equals the 7.3% annualized return on the S&P 500 for the last 50 years. (The total annualized return of the SPY during that time frame, which includes dividends, is 10.3%.) 

Verizon is a dividend grower, though modestly so, at an average annual rate of 2.4%. But intrepid investors who take the plunge with VZ now will see this add to their already spectacular yield. 

All this suggests that buying VZ now requires faith that it can maintain its dividend. Can it?  A look at the cash flows for the first six months of the year shows about $5.4 billion in dividends paid, which was covered more than three times over by almost $18 billion in cash flow from operations. (Last year, dividend coverage was nearly 4x.) Even if performance deteriorates, there's plenty of cushion, though if a downturn was bad, Verizon would need to make some difficult decisions about reinvesting in the business.  

Verizon sports an eye-popping $136 billion in debt, but is a strong enough credit to be able to refinance this out into the future ad infinitum. Indeed, the current portion is just $13 billion.  For this reason, and its strong cash flows, Value Line rates the stock A++ for financial strength, a designation that no other telecom has, including AT&T (T). 

So, if you are going to buy VZ, buy it for a dividend that can keep you even with the broad market indexes. Capital appreciation may be part of the picture, but there is no immediate visibility on it. If you adhere to the Dogs of the Dow strategy, you may likely find you will be overturning your position in VZ come this time next year. 

It's been several since Intel (INTC, $27.70) subsidiary Mobileye filed an S-1 registration statement with the Securities and Exchange Commission (SEC). Details around the public offering for the company, which makes processors for self-driving cars, are finally emerging. MBLY stock is expected to be priced between $18 and $20 per share, and is set to start trading on the Nasdaq this Wednesday, Oct. 26. 

The question is whether investors should care about Mobileye's initial public offering (IPO)? Or is this simply another IPO that will make lawyers, accountants, and investment bankers money, but very few others?

There are two reasons why investors ought to care about the Mobileye IPO.

Intel Wants to Unlock Value for Shareholders

Intel first announced its plans for Mobileye last December, stating it would maintain majority ownership of the market leader in self-driving car solutions.

"Intel's acquisition of Mobileye has been a great success," said Intel CEO Pat Gelsinger. "Mobileye has achieved record revenue year-over-year with 2021 gains expected to be more than 40 percent higher than 2020, highlighting the powerful benefits to both companies of our ongoing partnership. Amnon [Shashua, the CEO of Mobileye] and I determined that an IPO provides the best opportunity to build on Mobileye's track record for innovation and unlock value for shareholders."

Intel paid $14.5 billion, net of cash, for 97.3% of Mobileye on Aug. 21, 2017. It would acquire the remaining stock valued at $375 million later that year. When all was said and done, INTC paid approximately $15 billion for a company that generated revenue of $698 million in 2018, the Israeli-based business's first full year under Intel ownership.

So, the semiconductor giant paid more than 21x sales for Mobileye's innovative EyeQ System-on-Chips (SoCs) advanced driver assistance systems (ADAS).

Since the acquisition, Mobileye's revenues have grown to $854 million for the six months ended July 2, 2022 – up 21% over the year-ago period. However, it lost $36 million in these six months from operations. Over the past three fiscal years, its combined operating losses were $356 million.

If you annualize Mobileye's revenues so far in 2022, and then multiply that ($1.7 billion) by 21, the multiple Intel paid, you get a valuation of nearly $36 billion. This is almost 2.5 times higher than what it paid five years ago.

The self-driving car specialist was once estimated to be worth as much as $50 billion in an IPO. However, current estimates come in around $30 billion, or 17.5x sales.

Even still, one of the only ways to extract some of those gains is by spinning it off. So if you're an Intel shareholder, you should care about the Mobileye IPO.

Intel Has Other Plans

As the Financial Times recently pointed out, Mobileye only accounts for 3% of Intel's revenues. Further, it does little to make the Dow Jones stock more competitive with other chipmakers such as Advanced Micro Devices (AMD) and Nvidia (NVDA).

Earlier this year, Intel announced plans to invest $88 billion in Europe to balance its global semiconductor supply chain.

The plan includes expanding its manufacturing capacity in Europe by building a semiconductor fab site in Magdeburg, Germany. The plant will employ 3,000 people and be operational in 2027. In addition, it will spend 12 billion Euros on expanding its Ireland manufacturing capacity.

With Intel's stock down around 50% over the past 52 weeks and 35% over the past five years – the S&P 500 is up almost 45% over the same 60-month period – it has to focus on the efforts that can deliver more immediate returns than Mobileye can.

Wisely, the self-driving car company will have a dual-class structure where Intel holds all Class B shares, which come with 10 votes, while Class A will have one vote. The details of how many Class B shares will be issued by Mobileye has yet to be determined, but you can be sure there will be enough to allow Intel to retain control of Mobileye until it makes sense to sell off the rest.

The dual class structure might bring down Mobileye's valuation, but that's the price it must pay to ensure it doesn't entirely miss out on its future growth.

In this post-COVID era and period of long COVID health complications, many Americans have become increasingly aware that they could become the victim of a life-threatening illness, injury or disability that makes it impossible for them to work and support their families. This has sparked new attention toward the intricacies of the Social Security Disability Insurance (SSDI) process and its many requirements for approval.

American workers should become familiar with the financial protections and career support that this federal disability insurance offers just in case the unexpected strikes. Having the right information and the right representation can increase the likelihood of approval and yield financial and professional security.

Here are answers to some common questions about this federal insurance, which covers more than 156 million U.S. workers.

What is the minimum and maximum Social Security will pay for disability benefits?

The Social Security Administration (SSA) determines how much a person receives based on the amount of past earnings that an individual has paid into their FICA taxes for all the years they’ve worked. It’s important to know that the severity of a disability does not affect how much a person will receive. The average SSDI payment is $1,358 in 2022, with the maximum amount reaching about $3,300. In addition, individuals with dependents (under 18) could receive an additional amount of half the monthly benefit. An easy way to estimate a monthly SSDI payment is to use a benefits calculator.

What conditions are considered a disability?

Any condition could quality for SSDI benefits, if the person’s severity and medical evidence support the claim for benefits. To meet the SSA’s definition of disability, an individual must not be able to engage in any substantial gainful activity (SGA) due to a medically determinable physical or mental impairment that has lasted or is expected to last for a continuous period of at least 12 months or lead to death.

The SSA maintains a list of physical and mental impairments and guidelines for specific conditions that will automatically qualify a person for SSDI benefits. However, applicants can still apply for SSDI even if their condition is not listed. Social Security may consider the applicant's conditions as long as it limits function and ability to work.

What makes someone eligible for Social Security disability?

There are a few criteria for someone to be eligible for SSDI.

• The applicant must have worked at least five of the last 10 years and paid payroll (FICA) taxes during that period.
• They must have had a disability before reaching full retirement age (65-67). If an applicant is younger than 21, they can still apply for SSDI under their parents' earning records even if they haven’t worked or contributed to the program.
• The individual must be unable to work due to their physical or mental condition, and their condition is expected to last at least a year, or result in death.

It’s also vital that the person applying for benefits is under the care of a health professional, who can confirm their condition, and has medical documentation. Working with a representative can dramatically improve an applicant's chances of receiving SSDI benefits. A quick quiz can help you find out if you are eligible for SSDI.

How often does Social Security review your disability?

Benefits continue as long as the individual has a disability that prevents them from working. However, Social Security conducts Continuing Disability Reviews (CDR), which means they review someone’s claim for medical improvement. Those reviews can be scheduled at intervals of six to 18 months, three years, five years and seven years after benefits began, depending on Social Security’s assessment of whether medical improvement is likely.

Does Social Security disability last for life?

Technically, no, because individuals will see their disability benefits convert to Social Security retirement benefits when they reach retirement age (65-67). Also, if someone decides to return to work when they reach medical stability, they may be able to leave the SSDI program and actively work full-time until they decide to retire and then seek Social Security retirement benefits.

What other benefits can I get with Social Security disability?

Individuals receiving SSDI benefits automatically become eligible for Medicare coverage after a 24-month waiting period. During the waiting period, beneficiaries receiving COBRA can extend that health insurance coverage an additional 11 months.

Can I work while receiving Social Security disability?

Yes, you can attempt a return to work while receiving SSDI benefits. The Social Security Administration administers a program called Ticket to Work (TTW) with the help of authorized Employment Networks. The Ticket program includes important benefits and it includes protection for a participant’s SSDI and Medicare benefits while they pursue a return to work.

What is the income limit for Social Security disability in 2022?

The earning limit for receiving SSDI benefits is known as the substantial gainful activity (SGA) amount, and that is $1,350 per month, or $16,200 annually in 2022 (non-blind). You usually cannot make more than that or your benefits will stop.

What is the best way to get approved for Social Security disability?

The best way to increase your chances of receiving the benefits you have earned is to approach the application process with an understanding of how complicated it can be. The government wants to ensure people receive benefits who are truly deserving of them.

A representative like Allsup helps people with disabilities fully understand the complexities of the SSDI process. A representative has experience with the rules and regulations, they can help get medical records or additional information to support your claim. They can also assist with requesting a reconsideration, a hearing or an Appeals Council review, if needed. It’s important to have representation at the start of the application process, since it can improve an individual’s chances of SSDI approval, rather than waiting to seek help at the hearing or appeals level.

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.

It is easy to think that something called a “special needs trust” is only used infrequently – after all, the very name implies the need for such a trust is rare. That could not be further from reality. Perhaps a more appropriate name would be “frequently needed trust.” Historically, special needs planning referred to financial planning concerns for individuals who are living with physical or intellectual disabilities diagnosed from birth, and that special needs planning was used by a niche group of individuals and families.

How big an issue is disability in our society? The number is surprising, as is the variety of individual situations for which special needs planning is needed. The Centers for Disease Control and Prevention estimates that 61 million adults in the United States live with a significant disability – that’s just over 1 in 4 adults who have some type of disability, whether a mobility impairment, intellectual and developmental disabilities, brain injuries, mental illness or chronic conditions. And those 1 in 4 adults do not include an untold number of Americans known as COVID long haulers who may be dealing with the yet-unknown effects of long COVID, which could result in disability in the future. Given the high number of individuals who are currently living with or may develop a disability in the future, special needs planning is very important to consider when creating your financial plan.

The population of people with a disability is growing rapidly, mainly because of increasing longevity. Fewer than 7% of Americans under the age of 18 have a disability, but for those 65 and older, the incidence of disability leaps to 40% according to CDC research. The goal of effective special needs planning is to not only secure the financial future of the person living with a disability but to also create a meaningful, fulfilling life for that person.

So, what are the steps to create a special needs financial plan?

Preventing the Worst-Case Scenario

The first step is to understand the various governmental support options, how to qualify and maintain eligibility of these programs, and which programs are means-tested. Social Security and Medicare are insurance programs that most people are familiar with as retirement programs and are paid for with premiums withheld from wages. Medicaid provides health coverage for low-income adults, children and people with disabilities and is administered by individual states, according to federal requirements. There is also a Social Security Disability Insurance (SSDI) program for workers who are disabled before retirement age. There are some significant benefits those on SSDI can qualify for that are less frequently known:

• Receiving SSDI benefits for 24 months qualifies a recipient for Medicare, regardless of age.
• And a person who has a diagnosed disability before age 22 can become eligible for SSDI and Medicare based on their parents’ work history.

In their lifetime, a person with a disability may need all four of these programs to cover their basic needs. It is very important to work with your financial adviser, and in particular an adviser with expertise in special needs planning, to understand which programs are options and how to manage the person with the disability’s financial affairs to abide by the limits of assets that the individual may control before being disqualified from benefits and the specific rules that apply depending on the state you live in. The asset limit is quite low – typically, a person with a disability may not directly own more than $2,000 in assets – and it is easy to accidentally be disqualified from benefits if you are not careful.

The public benefits are valuable but often insufficient. Most people with disabilities cannot afford to lose the benefits, but the benefits alone do not provide enough support for a comfortable life. So, what do you do to add in supplemental support? Frequently, I hear that the “simplest” solution would be to disinherit the person with the disability so they can keep the public benefits, but that solution leaves too much to chance to be viable. Sometimes, family members do not feel the same moral obligation to support the person with the disability, or the funds that were supposed to be set aside may be lost to divorce or lawsuits.

A better way to ensure the orderly transfer of assets for the ongoing support of a person with a disability is to use a discretionary trust, also known as a supplemental needs trust or special needs trust. A discretionary trust of this type has specific language that prohibits the trustee from paying for the basic food, shelter and medical benefits provided by governmental programs and ensures that the assets in such a trust are neither owned by nor controlled by the beneficiary, so the trust assets do not jeopardize the beneficiary’s means-tested governmental benefits.

There are three basic kinds of special needs trusts: third-party trusts, master pooled trusts, and first party Medicaid payback trusts. Depending on the financial and lifestyle needs of the beneficiary and their family, one of these trusts may be better suited than another. Confirm with your financial adviser and estate planning attorney to determine what is best for your personal situation.

Next, you need to ensure that the framework you have created has a thick layer of protection against major causes of financial turmoil for a special needs plan – medical expenses and premature death of the primary breadwinner in the family. In most cases, it is imperative that you understand the health insurance options available for the person with the disability, whether through government programs or via a private insurance policy. Additionally, life insurance is more important to families with disabled dependents than it is for the typical household. Providing for a family member with a disability is one of the best reasons to buy some form of permanent life insurance. Usually, second-to-die or survivorship type policies are the most appropriate product to fund a special needs trust.

The final step in a disaster prevention plan is to create an operation manual for the household, documenting all the information someone would need to step in and carry on as primary case manager and caretaker if needed. This is critically important for a surviving spouse as well as a successor caretaker when someone with a disability moves out on their own or loses the support of a previous helper. A good document filing system, medical records keeper, and a password logbook or password manager software is essential to maintain a reliable operation manual.

Enhancing the Financial Plan

People with disabilities need more than the basic financial plan – the same tools and techniques may be applied but likely need to be modified or adapted. First you need to consider the three phases of a financial life cycle – dependency (usually minor children/student years), accumulation (working /family earning years) and distribution (retirement years.) Someone with a disability may take a little longer to reach their accumulation years and may need to begin the distribution years earlier than the typical peer.

Couples with a loved one with special needs may need to increase their savings rate, considering a 10%-15% minimum savings rate or more to account for a three-person (and possibly two-house) retirement. It is important to make sure these increased savings use the most efficient vehicles for wealth accumulation, including consideration of different types of life insurance and increased amount of annual earnings coverage. Additionally, making sure that employer qualified plans and IRAs have correctly named beneficiaries and consideration of tax treatment upon distribution, noting that trusts reach the highest federal tax rate of 37% at just $13,451 of income in 2022, is important. Your financial adviser and tax professional are key to making sure these factors are optimized.

The ABLE Act of 2014 created a new savings vehicle for people with disabilities that is especially useful. The ABLE account is an inexpensive, flexible savings plan for a person with disability which can be funded with earnings from employment or contributions from family members or friends, subject to annual contribution limits. There are certain criteria to be eligible to open an ABLE account. An eligible individual must have developed their disability before the age of 26 and have been living with their disability for at least one year or expect their disability to last for at least one year. The ABLE account is similar to the structure of a 529 college savings plan where after-tax money is saved, tax-deferred growth happens while the funds are in the ABLE account and tax-free distributions for qualified expenses come out. The ABLE account is an asset that a person with a disability can own directly without disqualifying themselves from Medicaid. However, if an individual with a disability has more than $100,000 in an ABLE account, then SSI benefits may be suspended so it is a best practice to keep a careful eye on the balance of the account to avoid inadvertently disqualifying from public benefits. The asset limit means the ABLE account can’t take the place of a special needs trust, but it is a great substitute for an IRA or a 401(k) plan for people who are able to work, allowing them to accumulate funds for education, a vehicle or a major purchase.

The Goal of Special Needs Planning

The goal of special needs planning is the same as the goals we use for all our clients – the opportunity to enjoy a fulfilling life with the chance to be themselves and make a unique contribution to a community that supports and values them. Even if the requirements of governmental programs mean that a person with a disability may never have a direct net worth that exceeds $2,000, a sound and carefully considered financial plan can make those goals happen for every member of a family with the partnership of your financial adviser, estate planning attorney and tax professional.

Special thanks to Christopher Currin, CFP ®, Senior Wealth Advisor, for his invaluable research and expertise in creating this article.

The CDFA® mark is the property of The Institute for Divorce Financial Analysts, which reserve sole rights to its use, and is used by permission.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors is registered as an investment adviser with the SEC. Content is for educational and illustrative purposes only and does not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors.

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.

Social Security Disability Insurance (SSDI) is one of the least understood insurance policies available to U.S. workers. Many workers don’t realize they have the income protection SSDI provides or that they contributed to the coverage with every paycheck through FICA tax payments. Based on the available statistics, however, it is important that everyone is equipped with the knowledge of the program if and when a medical condition or disability makes it impossible for them to work.

One in four 20-year-olds will experience a period of disability at some point in their working life. If it becomes severe and has a long-term impact, SSDI provides a financial backstop of income, health insurance and even return to work assistance. Also, as we continue to recognize the effects of “long COVID” and other debilitating conditions, more and more individuals are turning to the vital SSDI program.

Unfortunately, fewer than 40% of the approximately 2 million people per year who seek SSDI will receive it after all is said and done, according to figures from the Social Security Office of Retirement and Disability Policy. About 67% of initial applications for SSDI will be denied by the Social Security Administration (SSA). During the first appeal (reconsideration), only 8% of former workers will be approved; and at the hearing level, just 2% of those still appealing for benefits will succeed.

Many simply give up trying to navigate the confusing SSDI program, some manage to recover and go back to work, and others die while waiting months or years for a decision.

Three main issues are the primary contributors to the high denial rates and prolonged appeals process:

1. Applicants not meeting the work history requirements

While anyone who pays FICA payroll taxes long enough typically is insured for SSDI, it does not mean they are eligible for benefits. Just like private long-term disability insurance, there are key technical requirements. To meet the SSA definition of disability, one must have physical or mental impairments that prevent them from being unable to perform any substantial gainful activity (SGA) for at least 12 months or have a terminal diagnosis. SGA encompasses work performed for pay or profit, and for 2022, the monthly benefit one would receive after qualification is set at $1,350 a month, or $2,260 if you are blind.

An applicant must have worked five of the last 10 years, but this varies for younger individuals. The last requirement to meet is that an applicant must be at least age 21 and have not reached their full retirement age.

There are two quick ways to learn if you are insured for benefits before you apply. Discuss your situation with an experienced SSDI representative or go to www.ssa.gov and check out your My Social Security account benefit statement.

2. Applicants not having thorough documentation

The need for detailed medical evidence that documents a disability and its impact on the individual’s ability to perform SGA is a critical component of the SSDI application. Evidence should include diagnoses, medical tests and results, treatment history, prescription drugs, surgeries, ER and doctor visits, and other relevant medical details to demonstrate not just that you have a problem, but also that you have been getting regular medical treatment for your problem.

Solid medical evidence, combined with details about how a disability influences your activities of daily living, is especially important if you have an invisible disability, such as mental disorders, neurological conditions or cognitive dysfunctions caused by injury or disease. Regular monthly treatments and drug therapies with specialists and mental health professionals are an important part of your claim.

All medical evidence should support the claim that you meet an SSDI “medical listing.” These are details that help you prove your disability and are organized around diseases and body systems. In addition, the SSA follows complicated vocational guidelines that are applied based on age and education level.

3. Applicants not knowing they have the right to an SSDI representative

The SSA doesn’t inform initial applicants that they have the right to retain a representative to assist them early on, and most people try to navigate the complicated program solo. You need an advocate – someone you can trust will tell the story of your disability and its devastating effect on you and your family.

Fewer than 3 out of 10 applicants have an SSDI representative to help them apply. Those 3 people are 23% more likely to get their application approved, however, and that also means getting benefits in six months compared with a year or two. Of note, experienced advocates understand how to document for medical listings and usually help confirm your likely eligibility in advance.

If you are eligible for private long-term disability insurance coverage through your employer, consider yourself lucky. Your plan typically pays your representative’s fee for you if you must apply for SSDI.

Of course, these are especially unusual times for those with serious medical conditions that have worsened after a COVID-19 diagnosis. Representatives are taking on more SSDI cases resulting from long COVID symptoms that have exacerbated physical and mental impairments for people known as COVID long haulers. Long COVID may affect up to 30% of COVID patients, or an estimated 25 million people in the U.S., according to the American Academy of Physical Medicine and Rehabilitation –particularly those with respiratory disease, diabetes and cognitive issues.

One hopes they will never be impacted by a severe disability, and it’s not uncommon to resist the idea that it has changed your life and your ability to work. Like other insurance, however, SSDI is an investment you made when working. It’s there if you need it, even if only for a year or two while you recover from a major injury or a serious, short-term medical problem.

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.

Big data stocks might not seem like the most scintillating technology plays on the market. But their underlying companies provide a service of growing importance: cleaning and sorting an ever-swelling pool of digital data.

The proliferation of technologies from smart phones to cloud computing to the internet of things (IoT) has resulted in torrid growth of data being processed. The COVID-19 pandemic has only accelerated this pace. According to International Data Corporation, the amount of digital data generated during the next five years will be "greater than twice the amount of data created since the advent of digital storage."

However, much of these giant, complex pools of data (dubbed "big data") is effectively useless. That has in turn put heightened importance on technologies such as artificial intelligence (AI). Sophisticated algorithms sort through data to weed out noise and detect trends and other insights. Use cases include warding off cybersecurity threats, anticipating which factory equipment needs maintenance and determining whether customers will churn.

A number of software companies build tools, systems and platforms for dealing with big data. But which of these tech stocks boasts the most promising futures?

Read on as we explore some of the best big data stocks to buy right now.

Data is as of May 1. Analyst ratings courtesy of S&P Global Market Intelligence. Stocks are listed by analysts' consensus recommendation, from highest score (worst) to lowest (best).

• Market value: $195.8 billion
• Analysts' ratings: 5 Strong Buy, 2 Buy, 18 Hold, 2 Sell, 1 Strong Sell

Oracle (ORCL, $73.40) might seem like an odd pick. It's not a pure play like the other big data stocks on this list. It's a mature company that has been around since the mid-1970s. And Wall Street has cooled on its prospects of late.

But don't sleep on this old-guard tech name, which boasts several major advantages, including a strong sales organization, a powerful global infrastructure and a trusted brand.

Oracle has been revamping its database tools, which has included heavy investment in cloud technologies. That has paid off of late – fiscal second-quarter cloud revenues were up 22% year-over-year, and its most recently reported results (fiscal Q3) jumped 24%.

"Oracle's strong FQ2 and FQ3 results and management guidance commentary for FQ4 and FY2023 reinforce our view that Oracle is well-positioned to emerge as the #3 or #4 vendor in the PaaS/IaaS market and as the #2 vendor in the SaaS market – enabling the company to continue to reaccelerate revenue growth," says Credit Suisse, which rates the stock at Outperform.

Another source of potential growth has come via acquisition. In late December, Oracle agreed to buy out Cerner – a leader in patient data systems for healthcare organizations – for $28.3 billion. Oracle plans to integrate its own systems into Cerner's platform, such as autonomous databases, low-code development tools and the Voice Digital Assistant.

The healthcare industry is poised for transformation, and the opportunity is massive; health spending accounts for roughly 20% of U.S. GDP. Technologies like Cerner's will be essential as healthcare service providers try to both modernize and cut costs.

• Market value: $4.2 billion
• Analysts' ratings: 3 Strong Buy, 3 Buy, 7 Hold, 0 Sell, 0 Strong Sell

New Relic (NEWR, $63.27) develops software that mines substantial amounts of data to find real-time insights. The technology allows for observability, which detects errors in information technology infrastructures and fixes them. The result: Customers get better performance out of transformational projects.

The company's business model is based on data growth of just about every kind. Examples include Pixie data (for telemetry information), logs from cloud providers and Prometheus data (events and alerts). "This data set, which includes all of the data we ingest, not just the data we charge for, is growing at around 50% year over year," New Relic says.

New Relic's acquisition of CodeStream, announced in October 2021, should also be a driver for growth. CodeStream is a sophisticated developer platform that makes it easier to discuss and review code. The system makes it possible to debug telemetry data, which helps developers make better apps.

While the revenues have come under pressure, that's to be expected as New Relic has focused more on the consumption-based model, though that transition is nearing completion.

"New Relic's shift to a Consumption-based model is largely complete with more than 80% of the business migrated by the end of 3QFY22," says Needham, which rates the stock at Buy. "The remaining ~20% is expected to migrate as renewals for multi-year Subscription contracts come due."

Analysts are projecting annual revenue growth in the high teens this year and next, and while NEWR is expected to more than double its adjusted net loss in 2022, it's expected to produce a small profit by 2023. Raymond James, which rates this big data stock at Strong Buy, believes both growth and profitability will pick up over the next few quarters.

• Market value: $19.6 billion
• Analysts' ratings: 15 Strong Buy, 9 Buy, 15 Hold, 0 Sell, 0 Strong Sell

Splunk (SPLK, $122.02), which was founded roughly 20 years ago, is a pioneer in analyzing machine-generated data. Splunk's customers have gained valuable insights as a result, whether that's through monitoring the health of IT networks or detecting cybersecurity threats.

This big data stock is enjoying a productive 2022 so far, up about 5% in a down market. That's a refreshing change of pace following the stock's steep decline in late November 2021, when CEO Doug Merritt unexpectedly resigned – one in a number of high-level departures across the year.

But there are plenty of reasons to be bullish on the firm.

Splunk received a vote of confidence last summer, when Silver Lake Partners – a top tech private equity firm whose deals include Airbnb (ABNB), Dell Technologies (DELL) and UiPath (PATH) – invested $1 billion in the company.

Also, Splunk's business transition to the cloud is flashing signs of paying off. During the most recent quarter, cloud annual recurring revenue (ARR) spiked by 75% year-over-year to $1.1 billion. The company boasted 270 customers with ARR greater than $1 million, which was nearly double the year-ago number.

The Wall Street Journal reported in February that Cisco Systems (CSCO) expressed interested in acquiring Splunk for $20 billion, but as of right now, it appears a deal will not happen. But it's still an indication that larger tech companies are looking to big data stocks as a source of growth.

If SPLK's stock price remains depressed – it's 45% off its September 2020 high and trading for around 7 times sales – other suitors might emerge. Indeed, analyst outfit Jefferies named SPLK as one of 20 small- and mid-cap names to buy for GARP (growth at a reasonable price).

• Market value: $38.0 billion
• Analysts' ratings: 11 Strong Buy, 8 Buy, 4 Hold, 1 Sell, 0 Strong Sell

Datadog (DDOG, $120.78) is one of the top players in the big data world.

Datadog develops software to help with monitoring and security for cloud applications. It combines various must-have applications, such as for app performance, log management and real-time observability. About 33% of the customers use four or more products, up from 22% a year ago.

It also continues to come up with new offerings, such as the Sensitive Data Scanner, which helps to discover, classify and protect sensitive corporate information (a major pain point).

DDOG boasts simply staggering growth rates – fourth-quarter revenues shot up by 84% to $326.2 million, an acceleration of the full-year rate of 70%. Better still: The company is generating profits. Datadog reported 2 cents of generally accepted accounting principles (GAAP) earnings per share in Q4, up from a 5-cent loss in the year-ago period. Operating cash flow (OCF) was $115.8 million, with free cash flow (FCF, the cash remaining after a company has paid its expenses, interest on debt, taxes and long-term investments to grow its business) at $106.7 million.

"We reiterate our Outperform rating on DDOG following very strong [fourth-quarter] results that should refute concerns over the state of the observability market following deceleration at competitors," says Raymond James analyst Adam Tindle, who rates the stock at Outperform (equivalent of Buy).

We'll note that Datadog is not cheap, trading at a plump 36 times sales. But a wide swath of Wall Street's analyst community is very bullish on DDOG shares regardless of that premium.

• Market value: $7.1 billion
• Analysts' ratings: 9 Strong Buy, 4 Buy, 5 Hold, 0 Sell, 0 Strong Sell

One of the biggest challenges with big data is that it is usually scattered all across an organization's various divisions. That can make it more difficult to usefully analyze said data.

Dutch firm Elastic (ESTC, $76.14) has seized on this opportunity by developing a sophisticated search engine for the enterprise. This engine integrates with myriad systems, allowing it to provide insights for an entire organization. It also has built a powerful self-serve model for customer adoption that has helped accelerate growth.

The latest quarter highlighted the benefits of Elastic's strategy. Elastic Cloud revenues of $80.4 million were up 79% year-over-year. The company said its net expansion rate was just below 130%, slightly above the prior quarter. And total customer count was over 17,900, compared to more than 17,000 in the prior quarter and 13,800 in the year-ago period.

There's also plenty of runway for long-term growth. The company's latest investor presentation says the total addressable market for its software tools is about $78 billion. William Blair's Kamil Mielczarek (Outperform) has a much more modest TAM estimate of $44 billion, but even then, that implies less than 2% penetration for Elastic.

"A large portion of this TAM is still greenfield, where the customer's existing observability solution is legacy, internally built, or nonexistent," Mielczarek says. "The greenfield opportunity, combined with an expected TAM growth rate of at least midteens, leaves Elastic significant opportunity to continue to grow before it will be meaningfully affected by competitive pressures."

Mielczarek is just one of 13 analysts in a crowded bull camp for ESTC, which is top-rated among the five big data stocks listed here.

For decades, Harold has been building his business after starting it from scratch. He is now preparing to sell his company by identifying all of the company’s assets for a prospective buyer. Harold and his CFO identify the valuable tangible assets, such as equipment, rolling stock, cash, equivalents and accounts receivable. They chronicle the balance sheet and send it to their business broker, lawyer and CPA for review.

Almost immediately, Harold’s lawyer calls and asks him where the intellectual property is located. Harold tells him that he has none, adding that he has no patents, no trademarks or copyrights. He tells his lawyer that there simply aren’t any IP issues.

Harold’s attorney replies that of course, the company has some IP. He reminds Harold that he doesn’t do the exact same thing as his competitors the exact same way. Harold agrees.

The attorney adds that this means there is intellectual property, adding that Harold just wasn’t aware of what it is, where it is, or how to best protect it. He cautions Harold that he does not want him to sell his company and its intellectual property without getting paid for it.

It’s Common: Money Left on the Table

Harold is seeking maximum value for the business he created and grew with blood, sweat, tears and sacrifice. Yet he was about to leave a significant amount of money on the table because he failed to understand his ownership of valuable intellectual property. His lawyer drives the point home even further, warning that if he doesn’t identify his IP on a schedule of assets that two potentially disastrous things can happen:

• First, Harold won’t receive any value for the IP, so money will be left on the table when he sells the business.
• Second, if a competitor does try to compete against Harold by stealing any technology, or if a key employee walks away or goes to work for someone else taking company knowledge with them, the seller (or the buyer) will have no chance to stop it because there was no representation that there was any intellectual property to protect.

But all does not have to be lost.

On the eve of selling a company it is too late to first have a conversation about protecting IP, but better late than never. Companies have intellectual property, but they might not know where or what it is. And even though a business owner may not know quite how to protect it, or exactly how valuable it is (that’s what your intellectual property lawyer is for), it needs to be identified. If that can be accomplished, you can work with an IP attorney to secure it and make it exclusive to you for your benefit.

Where to Look for Your IP

Where is this intellectual property typically? It’s usually not in patents, and many companies, especially those in the B2B space without consumer-facing products or services, don’t have valuable trademarks. But almost every company has know-how. For example:

• Do you have a unique sales or customer service technique that makes your customers want to work with you?
• Do you have a business process that helps you deliver services faster, better, or less expensively?
• Do you have a way of creating a business culture that keeps everyone pulling on the same end of the rope to maximize creativity, revenue and profitability?

Or how about this — you are a manufacturing company that has 50 machines to make widgets. One employee in one plant responsible for one of those machines has figured out how to turn the knobs and pull the levers on that one machine to make it run just a little better. That know-how is intellectual property. But wait, there’s more! Did that employee know what they created? Does your company have a process for identifying important innovations so that instead of having one of 50 machines run better, that know-how is communicated across the manufacturing base so that all 50 machines run better?

Protecting Your IP

It is likely you have intellectual property after all, and if you can identify it, you can protect it. Information you don’t wish others to know about can be protected by strict adherence to a trade secret policy, which can be combined with strong security protections to secure those trade secrets under lock and key within the company.

Key employees, contractors and business partners can, and should, be bound by non-disclosure agreements to keep your information secret. The top innovators and business managers should collaborate periodically, sharing valuable know-how and business improvements (like the machine improvement) so the entire company can benefit.

If an innovation is going to become public, such as a new product going to market where it can be copied, an intellectual property lawyer can advise on the correct protections to keep competitors from doing just that. These protections might include utility patents, design patents, trade dress protection or other techniques.

As it turns out, Harold does have intellectual property he can identify. He just wishes he had gotten an intellectual property lawyer involved sooner.

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 logged a broad advance Thursday in the wake of the smallest weekly jobless claims number since John Lennon called it quits with the Beatles.

The Labor Department reported just 187,000 initial unemployment claims for the week ended March 19. That was 28,000 less than last week's revised claims report and the lowest such figure since September 1969.

"Before the pandemic, the number was hovering around 220,000, and we saw a complete recovery to these levels in the previous four weeks," says Alex Kuptsikevich, senior market analyst for forex broker FxPro. "The fresh data has marked a move into uncharted territory, indicating a further tightening in the labor market."

In other Thursday news, U.S. durable-goods orders for March fell by 2.2%. That was far below expectations for growth of 0.6% and represents the first decline in five months. Nevertheless, various economic readings are "still showing positive momentum overall on an absolute basis with the economy well above pre-pandemic highs," says Peter Essele, head of portfolio management for Commonwealth Financial Network.

Semiconductor stocks were at the fore of Thursday's rally, led by Nvidia (NVDA, +9.8%), which said late Wednesday that it would explore using Intel (INTC, +6.9%) as a foundry for the manufacture of its chips.

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NVDA helped the Nasdaq Composite (+1.9% to 14,191) pace the major indexes, with the S&P 500 (+1.4% to 4,520) and Dow Jones Industrial Average (+1.0% to 34,707) also finishing well in the green.

Other news in the stock market today:

• The small-cap Russell 2000 gained 1.1% to 2,075.
• U.S. crude futures fell almost 2.3% to settle at $112.34 per barrel.
• Gold futures rose 1.3% to end at $1,962.20 an ounce.
• Bitcoin joined in Thursday's rally, jumping 4.1% to $43,946.42. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• KB Home (KBH) slid 4.6% after the homebuilder reported fiscal first-quarter adjusted earnings of $1.47 per share on $1.40 billion in revenue – lower than the $1.52 per share and $1.49 billion analysts were expecting. Still, the figures were up 44% and 23$, respectively, year-over-year, and CEO Jeffrey Mezger said KBH is well-positioned to hit its full-year financial targets. "KB Home is not seeing a slowdown in demand despite price increases and the recent spike in mortgage rates," says BofA Securities analyst Rafe Jadrosich, who reiterated a Buy rating. He also said KBH's valuation "looks very compelling with shares trading at a 12% discount to our year-end 2022 tangible book value forecast."
• Freeport-McMoRan (FCX) rose 3.3% after Jefferies analyst Christopher LaFemina chimed in on the mining stock. "Freeport is in a strong competitive position in the midst of an earnings upgrade cycle that will take years to play out," LaFemina says. "The company has a clear path to grow its cash flow and capital returns and can create additional shareholder value by developing its unique organic growth pipeline." The analyst has a Buy rating on FCX, adding " the market continues to underappreciate the likely magnitude and duration of the ongoing cyclical upturn in copper." Several other basic materials stocks also traded higher today, including Cleveland-Cliffs (CLF, +12.0%), U.S. Steel (X, +6.5%) and Nucor (NUE, +4.3%).

The Third Year of the Bull Market

Yesterday marked the end of the bull market's second year, but investors might be in for a trying year three.

The post-COVID-19 bull market is the fastest bull market to double, at just under 18 months. However, "as this bull market reaches the third year of life, investors need to remember that year three of bull markets tend to be a little tamer, with the larger gains happening in year one and two," says Ryan Detrick, chief market strategist for LPL Financial.

"In fact, out of the 11 bull markets since World War II, we found that three of them ended during year three, while the ones that didn't end saw an average gain of only 5.2%."

In other words, at least historically speaking, we can expect some turbulence in the year to come.

The good news is that prepared investors can make the most of these challenges. Stocks that stave off sizzling inflation, for instance, or stocks that excel during periods of rising interest rates, afford investors relief from two of the market's biggest present pressures.

Meanwhile, a host of exchange-traded funds (ETFs) built to withstand this year's myriad challenges will also serve folks well. Our 22 best ETFs for 2022 include a little something for everyone: all-weather funds, ETFs constructed with inflation and rising interest rates in mind, and funds designed to withstand any additional complexities that could pop up soon enough.

If your estate includes private equity investments, operating businesses or intellectual property interests, I’d wager that you have asked about client confidentiality during every introductory meeting with a potential adviser. I believe that almost every wealth adviser, bank officer, broker, portfolio manager and trust officer has responded to your inquiry with the same assurances:

“Our clients’ confidentiality is one of our primary concerns. We do not disclose your information to any third party unless you request it. Our electronic communications are encrypted whenever they include sensitive, financial or confidential information.”

A leap of faith

Of course, these kinds of statements do not answer your question, do they? Perhaps, because what you seek is not an assurance of confidentiality but of confidence in that adviser. I wish it were easy for you to build confidence in your advisers. You must share so much information so quickly to obtain the financial, fiduciary and legal services you need. And it is almost a leap of faith when you engage a new adviser based on trust that they have not had time to earn.

Sometimes, my trust company is hired after a single conversation with the prospective family as the directed trustee for a wealth transfer strategy related to a business transaction involving tens of millions of dollars. Almost invariably, it is an introduction by a trusted adviser that laid the necessary foundation for building that kind of confidence.

If you may soon be selling your share of a successful business or other highly appreciated assets, you must engage a team of experts with confidence in their abilities.

Many moving parts

For example, my trust company often serves as an independent trustee, so clients may obtain certain income and estate tax benefits, asset protection and other advantages through a sale involving a trust. But for any trust strategy to succeed, all the advisers serving a client must understand the many moving parts of these transactions to effectuate and preserve the intended tax and financial benefits. And while doing so, they must each employ established practices to safeguard the client’s confidential information.

The process to establish such a trust in conjunction with a properly executed business transaction will necessarily include dealings with a broad variety of parties: sellers and buyers (and their officers, employees and tax and legal advisers); one or more banks and trust companies, law firms and accounting firms (and their staff and associates); one or more brokerage or financial firms (and their staff and associates); and family members (either in the know or unaware of these activities). That is an abundance of essential and tangential people with access to confidential information at a very sensitive time.

Transactions that involve intellectual property, trade secrets and/or the sale of company stock or assets sometimes require complete secrecy. An inadvertent disclosure to customers, suppliers, distributors or competitors could alter those relationships and undermine established goodwill, confidence in supply and sales agreements, and even the negotiated features of the transaction itself, such as the market valuation and sales price. All the nondisclosure agreements in the world won’t provide effective security if some of these parties lack the requisite expertise to execute a multistep transaction or fail to follow standards and practices controlling disclosure.

Personal involvement is crucial

But how do you ensure that your proposed business transaction and trust strategy will be protected? You must personally involve yourself diligently in the selection process and rely on your instincts. There are certain steps that seem to fall into place all on their own, but only if you let them. Foremost is the selection of your advisers.

Your corporate transactional attorney or your trust and estate attorney is hopefully a long-term adviser. Usually, one of these two advisers will first propose establishing a trust to obtain a greater benefit from the sale of your company or other assets. So first, meet with both these attorneys together so they may explain the division of labor and outline the many steps to implement an irrevocable trust strategy as a component part of your transaction.

Often, but not always, this will be a “foreign trust” — so called because it is established under a state law outside your resident state. But, sometimes, the trust will be established in your own state if your state doesn’t impose an income tax, offers strong directed trust laws, and the strategy merely requires an independent trustee (usually a trust company rather than an individual trustee).

Questions to be asking

You may be able to rely on your trust and estate attorney to have the expertise needed to draft a resident or foreign directed trust and advise on its risks and benefits in relation to a business transaction. But this practice requires a working knowledge of corporate, personal and fiduciary tax law, the trust laws of multiple states, and how to structure business transactions that may require company reorganization and strategic tax elections.

So, don’t be shy about asking how many of these trusts they have established, how many have involved a transaction like yours, and to walk through the risks and benefits of the strategy and the chosen jurisdiction.

Second, ask for a recommendation for the trust company you should use. Choosing a store-front trustee or simply using your bank because they operate a trust company means that the adviser with the most direct and continuing connection to your trust assets — your trustee — may not even understand the terms of the trust instrument, much less have the expertise to preserve its tax savings and other benefits. There is a real difference between trust officers trained to administer a large book of personal trusts and a dedicated fiduciary team with a proven track record as a knowledgeable and effective administrator for complicated irrevocable directed trusts and the related business transactions.

Third, ask the senior adviser at the trust company to introduce you to the team. Their team should include a wealth adviser, trust officer, associate support officer and a portfolio manager, with a bench of analysts focusing on securities, bonds and alternate investments. Each of these experts has a role to play in the success of your trust, even several years after the transaction closes. But you must have confidence in more than their expertise. You also need their loyalty; their dedication to your interests over theirs; their ongoing partnership with your own legal, tax and accounting advisers; their ingenuity and proactivity in identifying opportunities through long-term planning; and their objectivity in assessing the risks and benefits of their proposals.

Finally, you need confidence in their commitment to protecting your confidential financial and personal information so it will never be shared without your permission or used to further anyone’s interests before your own. This last item, confidence in your advisory team, begins with a leap of faith and grows with the relationship.

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.

The 2021 school year is here and once again, laptops are in the spotlight. Students have always appreciated the mobility of a laptop, but pandemic-driven remote learning and hybrid schooling have made them essential.

This year, there are more choices than ever as well as new twists to consider. AMD Ryzen mobile processors are competing with Intel, and Apple has new MacBook models powered by its M1 chip.. To help you make the right choice, we’ve narrowed the field down to 10 of the best laptops for students in 2021.

Two things to remember when laptop shopping for a student. First, a webcam is now a “must-have” feature. Most current laptops are equipped with one but if not, you’ll need an external USB-powered webcam. And second, check with your school administration before making a purchase. Some courses have specific hardware and/or software requirements. There have also been issues over the past year with some remote exam-proctor solutions not being compatible with Chromebooks.

As always, remember to leverage your student status for educational discounts. For example, Microsoft offers up to 10% off select devices for students and parents. Apple also offers student discounts year-round and runs a yearly special promotion for students. This year’s (which is in effect until September 27) will get students a free pair of AirPods with a qualifying Mac purchase.

Finally, the global shortage of semiconductors continues to affect the PC industry, so some laptops may be in limited supply. You may need to check multiple retailers to find the one you want. Prices have also been on the rise and could change from the MSRPs we’ve listed.

The Chromebook Duet from Lenovo combines two of the best features of Chromebooks: flexibility and affordability. The MSRP starts at just $299, but it can often be found for less. It’s also an extremely light and compact option (weighing just 2.03 pounds). Well-regarded by reviewers, this 2-in-1 Chromebook is a great option for K12 students.

This is not a blazingly fast device, but it’s well-equipped for general school use with a 10.1-inch Full HD display, an 8-core MediaTek processor, a single USB-C port, 4GB of RAM and a choice of 64GB or 128GB of solid state storage. It’s also equipped with dual cameras, including a 2MP webcam. Battery life is rated at up to 10 hours.

One of its strengths is a detachable keyboard. Securely connected by magnets, it provides a decent typing experience with minimal flex. Pop it off, and the Chromebook Duet becomes a tablet (weighing just one pound), which is ideal for running Android apps, reading, or drawing.

The Google Pixelbook Go remains a top pick for students who prefer a Chromebook.

Google’s Chromebook is thin and light (0.5-inches and 2.3 pounds), with a premium, painted magnesium case. Even the entry level model is equipped with 8GB of RAM. The 13.3-inch Full HD display is crisp, bright, and colors pop. The backlit keyboard ranks among the best for typing and it also features a dedicated Google Assistant button. The built-in DuoCam is better than most laptop webcams, with a full 1080p resolution at a smooth 60 fps. To seal the deal, the Pixelbook Go boasts 12-hour battery life.

Google has (so far) been able to resist the urge to raise the Pixelbook Go’s price since last year’s chip shortages and supply chain challenges began. Its starting price in 2019 was $649, and that remains the starting price in 2021. However, for the biggest bang for your buck. I would recommend spending an extra $200 for the mid-range model, which gets a much more powerful Intel Core i5 processor and doubles the onboard storage to 128GB.

As the company behind the Windows operating system, Microsoft has a distinct advantage when it comes to designing laptops. The company uses its position to create Surface devices that are Windows showcases, optimized for the software and featuring premium quality.

The Surface Laptop has been a long-time favorite for students, and it’s now in its fourth generation. Available with a choice of 13.5-inch or 15-inch high resolution PixelSense touchscreen displays, these laptops can be customized with a wide range of color options, and even a soft, Alcantara palm rest.

The most compelling configuration for students in 2021 may be the 13.5-inch Surface Laptop 4 with a powerful new, Surface Edition AMD Ryzen 5 processor with Radeon graphics. The six-core processor offers best-in-class processing power for multi-tasking, plus up to 19 hours of battery life. Priced at $1,199.99 this configuration includes 16GB of RAM and a 256GB SSD.

All Surface Laptop 4 models are great choices for remote learning. They are equipped with Wi-Fi 6, low light HD webcams, far-field Studio mics, and Omnisonic speakers with Dolby Atmos.

If you like the Lenovo Duet 2-in-1 approach, but would prefer Windows over Chrome as an operating system, Microsoft has an option in the Surface Go 2.

Its second generation Windows 10 tablet weighs 1.2 pounds and features a 10.5-inch PixelSense touchscreen display (1920 x 1280 resolution) with stylus support. It’s equipped with 8th generation Intel Core processors, 4GB or 8GB of RAM, 64GB or 128GB of SSD storage, and Wi-Fi 6. Battery life is rated at up to 10 hours. Windows 10 Home in S mode is preinstalled for additional kid-friendly security, but you can easily switch to regular Windows 10 at no cost.

It’s very well equipped for remote learning with a 1080p Skype HD webcam, dual studio mics, and stereo speakers with Dolby support. Unfortunately, the Type Cover is not included, but pick one up and you have a super-compact Windows 2-in-1 laptop. The Surface Go 2 ranges from $399.99 to $729.99, with the optional Type Cover adding another $99.99 to the price. Include a Surface Pen stylus for taking notes or writing, and you’ll need to add $99.99 more to the budget.

One of the most impressive laptops I’ve evaluated this year would be ideal for students who need a Windows laptop offering plenty of computing power and screen real estate.

The 2021 LG Gram 16 qualifies as an ultra-light laptop, despite its 11th gen Intel Core i7 CPU and 16-inch WQXGA (2560 x 1600) display. In fact, at just 2.62 pounds, the LG Gram 16 is the lightest commercially available 16-inch laptop.

Adding to this $1699.99 laptop’s high-performance cred is its standard equipment of 16GB of LPDDR4X RAM, 1TB of m.2 NVMe storage, Wi-Fi 6, and Intel Iris Xe graphics. It’s equipped with a wide range of ports for accessories and peripherals, including dual USB-C (Thunderbolt 4), dual USB Type-A, HDMI, and a microSD card slot. There’s an HD webcam, plus stereo speakers.

The Gram 16 is also an Intel Evo platform laptop, which means it is rated for up to 22 hours of use on a charge.

Dell has spent years perfecting its XPS 13 series laptops. Ultra-portable, with beautiful InfinityEdge displays, CNC-machined aluminum construction (with carbon fiber interiors and Gorilla Glass 6 protection), and long battery life make them a favorite of students who want a combination of performance, portability, durability, and style.

There are multiple XPS 13 models and configurations to choose from, but the one that will hit a sweet spot for many students is the XPS 13 2-in-1 with an 11th-generation Intel Core i5 processor. This laptop’s 360-degree hinge makes it a versatile option for remote learning or watching streaming video — set it up in tent mode and it’s stable, with no keyboard in the way. Video conferencing is enhanced by a widescreen HD camera with noise reduction, dual array digital mics, and stereo speakers.

The 13.4-inch FHD+ touchscreen display with antiglare treatment is powered by Intel Iris Xe graphics and it’s HDR 400 certified for natural colors. This 2.9 pound laptop is equipped with a full array of ports, 8GB of RAM, 256 GB of PCIe NVMe storage, a backlit keyboard, Wi-Fi 6, Windows Hello facial recognition, and it delivers battery life of up to 14 hours.

Apple’s MacBook Air always makes the list of top student laptops. It offers a compelling combination of performance, portability, style, and battery life.

The current model is the best ever, but there’s a twist. In 2020, Apple dumped Intel processors in this laptop, replacing them with its own M1 chip with integrated Neural Engine. This delivered huge performance gains. Apple says the M1 MacBook Air is up to 3.5 times faster than its predecessor, with up to five times the graphics performance. It runs silently, with no fan. This is a “green” laptop, with its case made of 100% recycled aluminum. The energy-efficient M1 improved battery life to up to 18 hours.

The base M1 MacBook Air is nicely equipped with a 13.3-inch Retina (2560-by-1600) True Tone display, 8GB of memory, a 256GB SSD, Touch ID, Wi-Fi 6, backlit Magic keyboard, and a FaceTime HD webcam with a three-mic array. It’s a great price at $999, but even better at the discounted education price of $899.

The only downside? There are just two USB-C (Thunderbolt 3) ports, so you may need a USB dongle to connect older accessories like thumb drives.

The M1 MacBook Air is a powerful machine, but the M1 version of Apple’s 13-inch MacBook Pro takes it up a notch. The M1 processor in the MacBook Pro gets an additional GPU core for improved graphics performance, especially for demanding, sustained tasks like exporting video. In the MacBook Pro, battery life stretches to 20 hours.

Here’s where things get complicated. Apple still offers previous generation MacBook Pro models with Intel processors. Unless you are using software that is known to have compatibility issues with the M1, I would stay away from the Intel versions. New macOS features are already leaving Intel behind. Many apps have already been M1-optimized and most others will run just fine in Apple’s Rosetta 2 emulation.

Students in creative courses that use Adobe’s applications — a big market for the MacBook Pro — may want to check Adobe’s website to see which software runs natively on the M1 processor.

The same qualifier from the MacBook Air holds true with the M1 MacBook Pro. There are just two USB-C ports, so be prepared to invest in a USB adapter or hub. With a starting price of $1,299 ($1,199 at Apple’s educational pricing), the 13-inch M1 MacBook Pro is a compelling option for students who want a stylish, high performance laptop.

While the pandemic brought remote learning to the forefront, it also elevated PC gaming to new levels of popularity. That means more students than ever want a back-to-school laptop that they can also game on. The Acer Nitro 5 is an affordable gaming laptop ($999.99) that proves you can enjoy mobile gaming without breaking the bank.

The Nitro 5 at this price point is equipped with a 15.4-inch Full HD display and an Nvidia GeForce GTX 1650Ti graphics card with 4GB of RAM. There’s 256GB of SSD storage, 8GB of DDR4 system RAM, and all the ports you could want. It even has a 720p webcam!

The big story here is the AMD Ryzen 5 series 4600H 6-core processor. It’s a top performer and also very energy efficient. Gaming the newest titles with the Nitro 5 will require dialling down the effects at 1080p resolution, however most games will be very playable. Even better, thanks to the Ryzen 5 CPU, battery life is excellent for a gaming laptop. For low-demand tasks like web browsing, you might be able to squeeze out 10 hours of use.

Planning on lugging this laptop to class? The Nitro 5 tips the scales at 5.29 pounds so you’d better invest in a good backpack.

The final laptop on the 2021 list is equally suited to high-end mobile gaming and high-demand courses, such as 3D modelling or editing 4K video.

Last year, we featured the ASUS ROG Zephyrus G14 in this position. This year it’s the G15. Despite sporting a big, 15.6-inch WQHD (2560 x 1440) display, this laptop is thin and light, coming in at 0.78-inches thick and 4.19 pounds.

The ASUS ROG Zephyrus G15 is equipped to take on the most demanding modern games, with an AMD Ryzen 9 5900HS processor. A range of Nvidia’s hot new RTX 3000 mobile GPUs is offered, so you can enjoy real-time ray-tracing and other advanced effects. Other specs of note include a 65Hz refresh rate on the display, 16GB of DDR4 RAM, 512GB or 1TB of m.2 NVMe PCIe 3.0 storage, all the ports you might need, and Wi-Fi 6. The speaker setup is impressive, with a pair of tweeters and four woofers delivering Dolby Atmos support. The integrated array microphone features AI mic noise-cancelling technology. Battery life — when doing school-related tasks instead of blowing up aliens — is a very respectable (for a gaming laptop) eight hours.

It will also crunch a data-heavy spreadsheet in no time.

The ROG Zephyrus G15 equipped with a top of the line Nvidia RTX 3080 with 8GB of DDR6 RAM retails for $2,499. No internal webcam is standard, although ASUS says all but the two entry-level versions of this laptop include a 1080p, 60fps external webcam in the box.

There is often confusion between artificial intelligence (AI) and machine learning (ML), but there are differences.

AI, for example, is a broad description of the category of technologies that allow for the simulation of human-like capabilities in machines.

Machine learning, meanwhile, is a subset of AI. It generally involves the processing of large amounts of data, which is then applied to algorithms. By doing this, ML makes it possible for a computer system to recognize objects, predict when a machine will fail, or even drive a car. In other words, it allows systems to learn and make choices with little human interaction.

Consider that machine learning is not new. The roots of this technology go back to the 1950s, when it was developed to help with such things as playing chess.

But it was not until the past decade that machine learning has become transformative. Some of the reasons for this include the development of new theories like deep learning – which is a subset of ML – as well as the explosion of data and the growth in cloud computing.

So how big is this opportunity for machine learning stocks?

It's definitely massive. According to International Data Corporation (IDC), worldwide spending on AI technologies is expected to see a five-year compound annual growth rate (CAGR) of 17.4% by 2024, with revenues hitting $554.3 billion.

That said, here are five machine learning stocks that could benefit from substantial growth in the global AI market.

Data is as of June 3.

• Market value: $1.6 trillion
• Year-to-date performance: 34.0%

Machine learning has been a core part of focus for Alphabet (GOOGL, $2,347.58) since its early days. Keep in mind that the original PageRank – which made it possible to effectively search web pages at scale – was based on sophisticated algorithms.

But GOOGL's investments in machine learning have accelerated during the past decade. Alphabet has retooled its infrastructure, hired thousands of data scientists and struck a myriad of acquisitions.

In 2017, Alphabet CEO Sundar Pichai said that the tech giant's investments in machine learning were "fueling innovations across Google," and that he was happy with how they were transitioning to an "AI-first company."

The technology has been critical for many of its applications, such as for optimizing ad targeting, powering the language translation system and allowing for Google Assistant. Machine learning has also become a key to building its cloud platform.

Alphabet created one of the first development platforms for AI, called TensorFlow. The company open-sourced the software library for machine learning in 2015, which helped to make it a global standard. Some of its marquee customers include Intel (INTC), General Electric (GE) and Coca-Cola (KO).

Of course, Alphabet is one of the leaders in the development of self-driving cars, TOO. At the heart of this is its Waymo division, which raised $3 billion in capital last year. The buzz is that this division of GOOGL will be spun off in an initial public offering (IPO) within the next year or two, which could be a nice value driver for the company.

It's certainly worthwhile to keep an eye on this machine learning stock moving forward.

• Market value: $422.9 billion
• Year-to-date performance: 30.0%

Founded in 1993, Nvidia (NVDA, $678.79) is the pioneer of GPUs (graphics processing units) for more powerful gaming experiences. This was made possible by sophisticated parallel processing of large amounts of data.

Yet GPUs have become the main computer platforms for data scientists to create machine learning models. As a result, Nvidia has seen significant growth in its data center business.

Note that its A100 chip has become a must-have for hyperscale and major cloud customers. It allows for both AI training and inference at high speeds – though market adoption is still in the early stages.

Now, it's true that NVDA's self-driving car division has seen choppy growth, but the company does have an advanced platform that is starting to get buy-in from large customers like Nio (NIO), SAIC (SAIC), Li Auto (LI), Zoox, Mercedes-Benz and Xpeng (XPEV).

To bolster its dominant position with AI-based chip systems, Nvidia has made a bold play to acquire U.K. chip designer Arm for $40 billon. This will help NVDA penetrate categories like the Internet of Things (IoT), smartphones and edge computing.

Then there was the purchase of Mellanox, which is a developer of advanced networking systems.The M&A deal will help to boost Nvidia's data center business.

As a result, the machine learning stock's growth has remained impressive. In the latest quarter, NVDA revenues spiked 84% year-over-year to a record $5.7 billion, while adjusted earnings more than doubled to arrive at $3.66 per share.

• Market value: $70.6 billion
• Year-to-date performance: -15.3%

Quality data is essential for effective machine learning, but this is not an easy process.

For large enterprises, data is fragmented across silos. Additionally, there are the nagging issues of cleaning up data sets, which, for the most part, are usually unstructured. What's more, traditional databases – such as those from Oracle (ORCL) – were not built for machine learning use cases, which are usually quite costly.

So what to do?

Well, the cloud has been a way to help mitigate these problems, and one of the leaders in the category is Snowflake (SNOW, $238.43). The company has built a cloud-native platform that makes it easy to spin-up databases. There are also the advantages of seemingly endless scale, a large number of integrations and built-in systems for machine learning.

BlackRock (BLK), which is one of the world's largest money managers, is a customer of Snowflake. The firm has a system called Aladdin, which is used to help predict and optimize portfolios. SNOW has also been important for integrating non-Aladdin data sources, which has allowed for notable increases in performance and investment results.

And yes, it's true that the machine learning stock has struggled on the charts this year. However, off the charts, Snowflake is one of the fastest-growing enterprise software companies.

In its first quarter, product revenues shot up by 110% year-over-year and the net revenue retention rate was up an impressive 168%. There are also 104 SNOW customers that generate revenues of more than $1 million on an annual basis.

• Market value: $5.9 billion
• Year-to-date performance: -20.9%

Founded in 2015, Lemonade (LMND, $96.88) is an insurance company that has been built on a machine learning foundation. The company currently offers policies for homeowners, renters, pets and life insurance.

Lemonade has three main parts. There is AI Maya, which is a virtual assistant that collects information from customers, provides quotes and manages payments.

Then there is AI Jim, which is a bot that handles insurance claims, and has been able to completely automate a third of them. And for those claims that need a human, the process is much easier since AI Jim has done much of the heavy lifting.

Finally, Lemonade has CX.AI. This is a system to handle routine customer questions.

With these technologies, Lemonade has gotten lots of traction with younger generations. This is certainly a tough market to reach – but can be critical for long-term growth.

It's true that this machine learning stock is not cheap, with the valuation at a hefty $5.9 billion, but the market opportunity is massive. After all, Lemonade is now moving into the lucrative auto insurance segment, which is estimated to bring in about $300 billion in premiums in the U.S. this year.

• Market value: $177.7 billion
• Year-to-date performance: 7.1%

While more and more companies have been investing in machine learning projects, the results have often been far from encouraging. It is common for these ideas to not extend beyond the proof-of-concept stage for several reasons, including the complexities of algorithms, the challenges with data and the issues with recruiting data scientists.

Because of this, companies will rely on the help of consulting firms – and one of the leaders in this market is Accenture (ACN, $279.63). The company has a thriving AI practice and it has become a major source of growth.

The company's scale is certainly a major factor in its leadership, as Accenture has a workforce of 537,000 and operations that span the globe. The firm also has experience across most industries.

As an example of how ACN improves machine learning capabilities for companies, it was tapped by U.K.-based telecommunications firm Vodafone (VOD) to help boost customer service.

Accenture developed a system to route customer calls to the most appropriate channels to handle their issues. It also works to predict when customers are most likely to call and will send out proactive messages to try and address concerns ahead of time. This has helped to reduce VOD's inbound calls by 1.5 million and increase digital channel usage by 26%

While Accenture did experience a slowdown in growth during the COVID-19 pandemic, the firm has been able to get back on track.

In the latest quarter, revenues increased by 8% year-over-year to $12.1 billion and adjusted profits rose 10% to $2.03 per share. And the current quarter is expected to see revenue growth of 10% to 13%.

Stock prices were generally unchanged in light trading Wednesday as a major rally in Intel (INTC, +7%) and tame inflation data offset the spectacle of the U.S. House of Representatives' impeachment debate.

Intel, which features prominently in all three major indices, touched a six-month high on news it will replace CEO Bob Swan with VMware (VMW, -6.8%) CEO Pat Gelsinger next month. The chipmaker's stock was the top performer in the Dow Jones Industrial Average, which finished flat at 31,060.

Meanwhile, the Labor Department's monthly reading on consumer prices showed inflation remained muted in December, rising at a pace of just 1.4%. Bond yields eased on the inflation data, which also helped keep many stocks above water.

The benchmark S&P 500 ticked up 0.2% to finish at 3,809, while the tech-heavy Nasdaq Composite added 0.4% to close at 13,128.

Other action in the stock market today:

• The small-cap Russell 2000 index slipped 0.8% to 2,111.
• Gold futures rose 0.2% to $1,848.50 per ounce.
• Benchmark U.S. crude oil futures were off 0.6% at $52.91
• GameStop (GME) surged 58% after short interest in the videogame retailer’s stock exceeded the number of outstanding shares.

Investors should be looking beyond the day-to-day distractions in Washington, D.C.

Rather, they should be focusing on future stimulus measures, vaccine progress and the improved outlook for the economy.

"Many are expecting economic growth to surprise to the upside as more people get vaccinated and resume traveling, going out to eat, and other leisure activities," says Brian Price, head of investment management for Commonwealth Financial Network.

Against that backdrop, market strategists expect cyclical names like financial stocks to outperform. The same bullish view applies to midcap stocks, which typically outpace their larger peers as the economy recovers.

Indeed, many of the best stocks to buy for the year ahead have cyclical tailwinds. Have a look at some of the pros' favorite stock picks for 2021.

For an extraordinary high achiever, such as NBA legend Michael Jordan, you could reasonably attribute his success to one of many things. His famous work ethic. His high basketball IQ. His shoes. But to His Airness himself, it was the result of a relentless mindset:

"I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."

Jordan acknowledges that he’s had his roadblocks along the way. "Everybody has had them. But obstacles don't have to stop you. If you run into a wall, don't turn around and give up. Figure out how to climb it, go through it, or work around it."

When you think about what it takes to become financially successful, what comes to mind? A smart investment strategy? Sure. The discipline to spend less than you earn? Definitely. A high-paying job? Certainly helpful. But one thing you may not have thought about — and that is often overlooked — is a Jordan-like mindset. That doesn’t mean the determination to become the greatest investor of all time, but rather, the desire to consistently improve.

In essence, to build wealth, you need the right mindset … a wealthy mindset. In her bestselling book, Mindset: The New Psychology of Success, Stanford psychologist Carol Dweck identifies two basic mindsets: fixed and growth. Let’s look at how each mindset can potentially impact your financial life and how your mindset can play a role in building wealth.

The Fixed Mindset

A fixed mindset is the belief that you are born and raised with a fixed character, intelligence and abilities, and these qualities will not change throughout life. People with a fixed mindset see success as dependent on those inherent qualities.

With a fixed mindset you:

• Focus on proving to others how smart or talented you are
• Consider working on something you’re not naturally good at as a waste of time
• Avoid taking risks or putting forth effort because you fear it will reveal you’re not smart or talented
• View failure as a setback to steer clear of

The Growth Mindset

Meanwhile, those with a growth mindset believe your character and capabilities can be improved over time through effort. Challenges are opportunities, while failure is just a feature of growth, not a limit of your abilities.

With a growth mindset you:

• Focus on consistently developing your abilities
• Desire to learn and try new things
• Embrace challenges and persist in the face of obstacles
• View the process of improving as success in itself

A Fixed Mindset’s Effects on Your Wealth

Through the prism of a fixed mindset, everything about your financial situation appears inevitable. Your job and your salary. Your spending habits. Your bank account balance. The financially successful people you know were just born with a high intellect or a wealthy family. This static way of thinking can adversely impact your finances in a variety of ways, including:

Lower earning potential. If you are not encouraged to take on new challenges and improve your skills, then it follows you are unlikely to advance your career or launch your own business, which effectively caps your earning potential.

Lack of planning. Fear of failure and obstacles could also keep you from taking on foundational wealth-building steps, such as creating a budget or saving and investing for retirement.

Reckless spending. If you focus on comparing yourself to others, then you will likely find yourself stuck on a hedonistic treadmill, spending money on things that may not actually improve your life.

Investment mistakes. Those with a fixed mindset seem to suffer from an acute form of confirmation bias — the tendency to acknowledge only information that fits your personal views and dismiss any information that conflicts with them. One of Dweck’s studies found that after a series of tests, those with a fixed mindset wanted to only hear about what they did right and not what they did wrong, even though that information could improve their test performance.

There are two dangers here. First, disregarding useful facts and opinions can result in less-than-optimal investment choices. You may find yourself always chasing the next hot stock, or never taking enough risk to achieve your financial goals. And second, you may never ask for professional help to manage your finances, be it a financial adviser, tax adviser or estate planner, which could increase the likelihood of costly mistakes.

A Growth Mindset’s Effects on Your Wealth

A growth mindset dismisses the thought of limitations. Financially speaking, with enough hard work, you can always improve in your professional and financial lives. You don’t need a substantial inheritance or million-dollar business idea to build wealth. Taking small, consistent financial steps will make a big difference over time.

Optimists share many of the same traits attributed to a growth mindset, such as working toward goals and viewing failure as learning opportunities. A study in Germany extensively interviewed super wealthy individuals, with a net worth of $33 million to $1.2 billion, and found the one personality trait most common among nearly all of them was optimism. In another five-year study of self-made millionaires, 67% said optimism was a key contributor to their success.

The fact is a growth mindset can have a very positive impact on your money, including.

Higher earning potential. An affection for new challenges, building skills and constructive criticism will undoubtedly translate into more career success, elevating your earning potential.

Better financial habits. Someone who is interested in learning and working toward big goals is more likely to adopt effective financial habits, such as sticking to a budget, avoiding debt and saving regularly in a retirement account.

Better investment choices. Those with a growth mindset are more comfortable taking risks and committing to goals. Investors know risk and return are related, so it could be argued those with a growth mindset are more comfortable taking an appropriate amount of risk and sticking through those inevitable market downturns. Further, someone who judges their investment returns by how close they are to their goals rather than in comparison to the latest hot stock will more likely stay on track.

Acceptance of financial help. Unlike a fixed mindset, the desire for useful information makes those with a growth mindset more likely to ask for help and collaborate with others to improve. A partnership with a financial professional can help someone find financial opportunities and avoid costly mistakes.

Steps to Upgrade Your Own Mindset to Build Wealth

A healthier, more productive grow mindset as it relates to wealth is something you can work toward. Here are steps that can help you develop a wealthy mindset:

Focus on what you can control. You can control how much of your paycheck you save, how much you spend, how much you pay in investment fees and what investments you buy. To focus only on things under your control is a habit that can consistently improve your financial situation.

Measure your financial success not by account number but by life satisfaction. Instead of comparing your own financial situation to your neighbor or the flavor-of-the-month investor in the news, ask yourself how happy you feel. If you live in a comfortable house, have a steady job, are on track toward retirement and are helping to send a child to college, then you are doing just fine.

Work with a financial advocate. People hire personal trainers to improve their health habits. The financial equivalent can be achieved by working with a financial adviser. As a trained professional, especially a fiduciary, an adviser’s job is to inform you of what decisions are in your best financial interest. Plus, sharing your goals and plan with someone will help keep you accountable.

If you start thinking with a growth mindset, your dreams become something to work toward and not something out of reach except for a lucky few. That goes whether you’re seeking a comfortable retirement or a world championship.

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.

Benjamin Graham had all the traits of a great investor—brains, curiosity and discipline. An immigrant to New York, his family was plunged into poverty when his father died. But Ben was a smart kid. He learned to read six languages in high school and went on to attend Columbia University, where he became a Greek scholar and, on graduation, received offers to teach from three disparate departments: mathematics, philosophy and English. Instead, he chose Wall Street, eventually teaching at Columbia’s business school, where Warren Buffett was among his students.

Graham had several big ideas. One was that the stock market was susceptible to the same kind of rigorous study as any academic subject. The result was Security Analysis, the classic book he wrote in 1934 with David Dodd. Another big idea was that investors should strive to own stocks that are priced low enough that they provide a “margin of error.”

Extreme value can produce extreme gains. As Graham wrote in the 1964 edition of The Intelligent Investor (first published in 1949), “In many cases there may be less real risk associated with buying a ‘bargain issue’ offering the chance of a large profit than with a conventional bond.”

You don’t have to be a brilliant analyst like Graham to recognize the value in value today. A study by Fidelity found that over the 26-year period through 2015, large-cap value stocks returned 9% compared with 8.6% for large-cap growth. Since then, however, growth has clobbered value.

Over the past three years, for example, Vanguard Russell 1000 Growth, an exchange-traded fund geared to a broad growth-stock index, has returned an annual average of 20.4%. Vanguard Russell 1000 Value (symbol VONV, $120) has returned just 9.6% an­nually. Value seems to be particularly undervalued right now. (Stocks and funds I like are in bold. Prices and returns are through December 31.)

Or simply check out the portfolio of Dodge & Cox Stock (DODGX), a superb large-cap value fund. Top holdings include Wells Fargo (WFC, 54), a venerable financial company beset by recent management turmoil, and Occidental Petroleum (OXY, $41), whose shares are down by nearly half since May 2018.

Other value-oriented mutual funds to consider include Homestead Value (HOVLX), whose top 10 holdings include Parker-Hannifin (PH, $206), a company that sells all kinds of monitoring equipment; Janus Henderson Small Cap Value (JSCVX), which has been loading up on financial-services stocks; and T. Rowe Price Equity Income (PRFDX), which owns value stocks that pay good dividends, including The Southern Co. (SO, $64), the Atlanta-based electric utility, now yielding close to 4%.

The big idea. Graham’s third—and perhaps most important—idea involved psychology. He wrote in The Intelligent Investor, “The investor’s chief problem—and even his worst enemy—is likely to be himself.” Here, he was ahead of his time. The rise of behavioral economics in recent years has shown that people often make financial decisions irrationally. For example, investors tend to devote more of their portfolio to stocks when shares have run up than when prices have fallen. By contrast, shoppers are more attracted to sweaters when they go on sale.

How do we protect ourselves against our own worst instincts? The best answer is dollar-cost averaging, investing the same amount of money regularly in the same bundle of stocks or mutual funds—or, for that matter, in a single index fund such as ETF SPDR S&P 500 (SPY, $322) or Schwab Total Stock Market (SWTSX).

Here’s an example: Assume you tell your bank to transfer $1,000 every quarter to a broker who is instructed to use it all to buy shares in a single stock. At the start of the first quarter, the market price of the stock is $25, so your $1,000 buys 40 shares (I’m leaving out transaction costs to make the illustration simple). Three months later, the stock has collapsed to $12.50, so your $1,000 buys 80 shares. The next quarter, the stock drops to $10, so you get 100 shares. Then, it jumps to $20, so you buy 50. At the end of a year, the stock price ends where it began, at $25. You have invested $4,000 and own 270 shares for an average cost of $14.81 each. Had you invested $4,000 all at once at the start of the year, your cost per share would be $25.

Of course, in this example, the stock falls and then rebounds to its original price. If the stock shot straight up, you might have been better off making the all-in investment. But the danger for investors comes not in a sharply rising market, when it’s easy to stay invested, but in a falling market, when the impulse is to bail out. Dollar-cost averaging allows you to view your investments in a completely different way. A falling stock price is not a calamity; in fact, it is a boon because it allows you to own a bigger chunk of the company.

It’s a rare investment that, at some point, does not fall below the price you paid for it. Graham emphasized both the likelihood and the transience of such declines. “The bona fide investor,” he wrote, “does not lose money merely because the market price of his holdings declines.” Investors lose money only if they actually sell at a loss.

The problem, as behavioral economists including Nobel Prize winner Richard Thaler have pointed out, is that investors are “loss averse,” which means “that they are distinctly more sensitive to losses than to gains.” When investors combine loss aversion with a propensity to check the dollar value of their portfolios frequently, they end up making mistakes—such as purging their portfolios of perfectly good stocks at precisely the wrong time.

A better viewpoint. When you dollar-cost average, on the other hand, you focus more on the number of shares you own than on the daily prices of those shares. You think of yourself as accumulating a bigger stake in an excellent business—or, if you own a broad-based mutual fund, in a time-tested economy.

“A serious investor,” Graham wrote, “is not likely to believe that the day-to-day or even month-to-month fluctuations of the stock market make him richer or poorer.” He’s right, but how many serious investors are there if we define serious as meaning immune to their own irrational impulses? Not many.

One solution Graham suggests is “some kind of mechanical method of varying the proportion of bonds to stocks in the investor’s portfolio.” If the market rises, the investor should “make sales out of his stockholdings, putting the proceeds into bonds; as it declines, he will reverse the procedure.” Graham advocates this strategy because it will give the investor “something to do” [Graham’s italics]; that is, it will “provide some outlet for his otherwise too pent-up energies.”

What Graham is describing is a form of regular portfolio rebalancing. Assume you decide on a mix of 60% stocks and 40% bonds. If, after a few years, the stock market rises 50% and bonds are flat, then just holding on to your assets gives you a new mix: 69% stocks and 31% bonds. But if you sell enough stocks and then use the proceeds to buy bonds, you’ll get back to 60-40.

I favor rebalancing, but I am a fanatic when it comes to dollar-cost averaging. Another advantage to this strategy is that it is a forced savings program. If a fixed amount comes out of your bank account each month or each quarter, you tend not to miss it because you never had it to spend. What a great way to tame your own worst enemy!

James K. GLassman chairs Glassman Advisory, a public affairs consulting firm. He does not write about his clients. He owns none of the stocks mentioned in this column. His most recent book is Safety Net: The Strategy for De-Risking Your Investments In a Time of Turbulence.

The return to school has always been an expensive proposition (all those little items quickly add up), but the laptop era – in which a trusted digital companion is critical for college, high school and even some primary-school students to keep up -- has upped the ante. The right laptop can make homework efficient, maybe even engaging; the wrong one can frustrate students and drain your bank account.

There are hundreds of different laptops out there; we’ve picked 11 great choices for students. Take a look.

• What you're getting: Strong all-around value for general-purpose use

The Dell XPS 13 was on last year's list, and it once again earns a spot in 2019.

With the latest Dell XPS 13, you get a 13.3-inch Infinity Edge display with minimal borders, so the laptop is closer to the size of an 11-inch model. It weighs just 2.7 pounds, making it easy to lug around in a backpack. The laptop is machined from a block of aluminum with a woven glass fiber palm rest, so it is both durable and stylish. Equipped with 8th-generation Intel Core processors and solid state storage, it’s a speedy and nearly silent laptop, with excellent battery life.

While it is available with a beautiful 4K display, the ideal configuration for most students is the $1,199.99 version that features a Full HD display, Core i5 CPU, 8GB of RAM and a 256GB SSD.

• What you're getting: The best lightweight option for Apple devotees is even better for students

Last fall Apple finally upgraded the ever-popular MacBook Air, then tweaked it again for 2019. Always a top choice because of its price, style and long battery life, the newest MacBook Air is indisputably one of the best laptop choices for students — so long as you don’t need to run Windows-only applications. There are ways around the Windows issue, but this is really best considered a macOS laptop.

Students can score a new MacBook Air featuring a 13.3-inch Retina display with True Tone, 8th generation dual-core Core i5 CPU, 8GB of RAM, 128GB SSD and a Force Touch trackpad for $999. To sweeten the deal even further, until September 26 Apple is throwing in a free pair of Beats Studio3 wireless headphones worth nearly $350.

The two knocks against the new MacBook Air are its limited ports (just two -- both USB-C) and the fragile “butterfly” keyboard. The former can be addressed with a hub or dongles if needed, while the latter comes with extended four-year warranty coverage under Apple’s keyboard replacement program.

• What you're getting: An Apple laptop for power users

For students who want a Mac but need a bit more muscle than the MacBook Air’s dual-core CPU, Apple offers student discounts on the 13-inch MacBook Pro as well.

This laptop features a 13.3-inch Retina display with True Tone and Wide Color (P3) support, making it a good choice for multimedia editing. It’s powered by Intel’s latest generation Core i5 CPU with four cores, Turbo Boost to 3.9GHz and integrated Intel Iris Plus Graphics 645. It also has Apple’s innovative Touch Bar, with integrated Touch ID sensor. The base model is specially priced for students at $1,199, but power users may want to consider upgrading the SSD storage from 128GB to 256GB and the RAM from 8GB to 16GB (adding $380 to the price tag).

Despite the more powerful specs, the 13-inch MacBook Pro is still a sleek machine -- just 0.59-inches thick and weighing only 3.02 pounds. It also boasts 10-hour battery life. Like the MacBook Air, the MacBook Pro is eligible for those free Beats wireless headphones as part of Apple’s back-to-school program.

• What you're getting: Unique second display with slick touch-screen navigation

At its core, the ASUS VivoBook S15 (S532) is a powerful machine, with an Intel Core i7 CPU. It has a full range of ports old and new, including USB 3.0, USB-C and HDMI. The 15.6-inch Full HD display with NanoEdge bezels gives the laptop an impressive 88% screen-to-body ratio. This laptop is equipped with an NVIDIA GeForce MX250 graphics card with 2GB of RAM. The keyboard is backlit, and there’s even an IR camera with Windows Hello facial login.

The killer feature is a second display. ASUS replaced the trackpad with a 5.65-inch touchscreen display it calls a ScreenPad that can run apps and utilities, as well as doing double duty for navigation. This is a lot of laptop for $899.

• What you're getting: A full-size two-in-one for tablet fans

The Inspiron 15-inch 7000 2-in-1 is a 15.6-inch laptop with a Full HD touchscreen display that supports Dell’s pressure-sensitive Active Pen digital stylus. It has the specs expected in a laptop that’s going to be used for tasks such as working in Microsoft Office and streaming video, including an 8th-generation Intel Core i5 CPU, 8GB of RAM and a 256GB SSD. But thanks to a 360-degree hinge, the Dell Inspiron 15-inch 7000 2-in-1 can also be used as a (really big) tablet, taking full advantage of that stylus for taking notes or drawing diagrams.

It’s priced right at $829.99, although if you want the Active Pen digital stylus (it’s not included), you’ll need to shell out $35 more.

• What you're getting: A bargain gamer-friendly laptop

Playing PC games is a popular downtime activity for many students, so there’s a strong case to be made for choosing a laptop that can handle both work and play.

Acer’s Nitro 5 laptop series leverages the latest in mobile processor and GPU technology to deliver capable gaming capability in a relatively small package. The AN515-54-51M5 version of the Nitro 5 hits the sweet spot with a 15.6-inch Full HD IPS display, quad-core Intel Core i5 CPU, Nvidia GeForce GTX 1050 graphics card with 4GB of DDR5 RAM, a 1TB HDD and 128 GB SSD. In addition, it’s loaded with ports, and both the memory and storage are user-upgradable.

In “school” mode, you can manage all-day battery life. It’s 5.51 pounds, which is hefty for a laptop — but pretty good for a full-sized gaming machine. The $829.99 price tag is reasonable for a decent Windows laptop in general, and great for one with gaming capabilities.

• What you're getting: An ultra- light two-in-one option that’s ideal for stylus use

Microsoft's Surface Pro 6 is aimed at professional users, but this Windows 10 tablet also makes a great student laptop when equipped with an optional Type Cover. Its native tablet form factor makes it particularly useful for programs where taking notes, copying diagrams or formulas, or illustration are involved, but it also does a good job as an ultra-portable, general-purpose laptop.

The Surface Pro 6 gets up to 13.5 hours of use on a battery charge, so even a long day of class and study sessions won’t require packing a power adapter. The durable magnesium-case tablet itself weighs just 1.7 pounds, making it easy to carry around. The 12.3-inch, high-resolution PixelSense touch display is spectacular, with crisp text and eye-popping color. Equipped with an Intel Core i5 processor, 8G of RAM and a 128GB SSD, the Surface Pro 6 retails at $899. The Surface Cover costs an additional $159.99, and a Pixel Pen active stylus costs $99.99. (Look for special pricing for students and discounted bundles.)

Although more expensive than the Surface Go tablet, the Surface Pro 6 is a better choice for many students. Its larger display is more useful, and the Surface Pro 6 is equipped with more powerful processors and more generous storage capacity.

• What you're getting: A stylish, thin and light Windows laptop

Microsoft’s Surface Laptop is due for an upgrade in coming months, but the Surface Laptop 2 (starting at $999) remains a great choice for students who want a stylish, lightweight, capable and affordable Windows 10 laptop.

Microsoft likes to compare the Surface Laptop to Apple’s popular MacBook Air. The company claims that the Surface Laptop 2 is 1.6 times faster, thinner, and offers an additional 1.5 hours of battery life. In addition, the Surface Laptop’s display supports touch input, while Apple has never offered this feature.

Regardless of how it fares against the Apple competition, in terms of Windows laptops, the 2.76-pound Surface Laptop 2 with 8th-generation Core processors and 14.5-hour battery life is an excellent option for students who need a laptop for school.

• What you're getting: A budget-friendly Chromebook option for grade-school students

Not every student needs the power of a Mac or Windows laptop. Many primary and secondary school boards have standardized on Chromebooks instead, which is good news for parents. Chromebooks — which use Google’s Chrome OS, G-Suite applications and can run Android apps from Google Play — are far less expensive than traditional laptops.

One of the best examples of how budget-friendly a Chromebook can be is Dell’s Inspiron Chromebook 11 (2-in-1). It has an 11.6-inch HD touch display that can rotate 360 degrees for use as an Android tablet. Tent Mode is handy for watching videos. The base version is powered by an Intel Celeron processor with 4GB of RAM and 32GB of solid state storage. That doesn’t sound like much, but it’s plenty for the low system demands and cloud-storage approach of a Chromebook. And it offers up to 10 hours of battery life.

The kicker is the $279.99 price tag, which is about as affordable as a laptop is going to get.

• What you're getting: A juiced-up Chromebook option that’s college-ready

While the tiny Dell Inspiron Chromebook is ideal for primary school students, those in high school or college will likely want something a little more capable.

The ASUS Chromebook Flip C434 is a really nice option — a big step up from entry-level Chromebooks, yet still far less expensive than a Windows or Mac laptop.

This is a 14-inch Chromebook with a 2-in-1 touch display that rotates 360 degrees. That display panel is Full HD with NanoEdge bezels. The stylish body features solid aluminum construction with diamond-cut anodized edges for a premium look, and its ErgoLift hinge raises the backlit keyboard in laptop mode for improved ergonomics. It has both USB-A and USB-C ports (enabling connection to an external USB-C computer monitor), and the 64GB of built-in solid state storage can be expanded using SD cards. Battery life is 10 hours, so it will last for a full day of classes.

Despite the impressive specs and premium build, the Chromebook Flip C434 has a very student (and parent)-friendly $569.99 price tag.

• What you're getting: All the portable power money can buy

Finally, a big-ticket option for students who want high-performance PC gaming in a thin and stylish laptop — two requirements that usually conflict.

The award-winning ASUS Zephyrus S GX502GW stuffs a 9th-generation Intel Core i7 CPU, 16GB of DDR4 RAM and an Nvidia GeForce RTX 2070 video card with 8GB of DDR6 VRAM into a magnesium alloy case that’s just ¾-inch thick and weighs 4.4 pounds. The 15.6-inch Full HD display has NanoEdge bezels, supports 100% sRGB color and is Pantone-validated, as well as supporting G-Sync. Audio is 7.1-channel surround sound. The laptop is equipped with every port imaginable, and its keyboard has RGB LED backlighting. Battery life isn’t great when gaming, but ASUS says you can coax eight hours out of the battery.

In other words, this powerful, VR-capable gaming laptop also has the specs and display that make it a powerhouse for a student in a program that involves demanding tasks such as 3D rendering, photo or video editing, and video encoding.

The primary casualty of this feat of engineering? Your wallet. Prices for this amazing laptop start at $2,399.

Data shows that if you want to generate alpha and outperform the major indexes, some of the top stocks to buy are companies that practice gender diversity.

Catalyst, the global nonprofit dedicated to building workplaces for women that work, has done exhaustive research into why diversity and inclusion matter. Among its findings:

• Companies pay something of a self-imposed penalty for lack of diversity. That is, those companies that poorly practice gender and ethnic/cultural diversity were 29% less likely to experience profitability above the industry average.
• A study of U.S. companies in the MSCI World Index between 2011 and 2016 found that “companies beginning with at least three women on their boards produced median gains of 10% ROE and 37% Earnings Per Share” over the five-year period. Companies with fewer women on their boards delivered less growth in these two important metrics.
• A 2016 study by Intel and Dalberg Global Development Advisors found that tech companies that practiced diversity had higher revenues, profits, and market value than those that didn’t. According to the study, diversity was worth $320 billion-$390 billion in increased market value by closing the gender gap in leadership.

In short, investing in gender-diverse stocks isn’t just a moral stance – it’s financially rewarding. For investors looking for ways to get in, here are 10 top stocks that show gender diversity counts.

Data is as of Aug. 11. Five-year average annual total returns from Morningstar data. Companies listed in alphabetical order.

• Market value: $21.8 billion
• 5-year average annual total return: 21.8% (vs. 10.8% for the S&P 500)
• Percentage of women on board: 60%
• American Water Works (AWK, $120.55) not only has more women than men on its board of directors, but its CEO (Susan Story) and CFO (Susan Hardwick) are women too, making this utility company a shining practitioner of gender diversity.

Since taking the top job in May 2014, Story has delivered an impressive cumulative total return of 295%, versus just 72% for Standard & Poor’s 500-stock index. But how on earth has she been able to accomplish such market-smashing returns in the utility sector, which is known for steady dividends, not breakneck growth?

For one, she has focused on developing a corporate culture that’s better than the competition.

“I think that one of the biggest changes that we’ve made is that we’re trying to let our frontline employees dictate how we do our business, because they’re the ones interacting with our customers every day,” Story told Chief Executive magazine in November 2018.

“So when you look at permeating that culture through very different workforces, we have folks on the frontline,” she said. “And the one thing we all share is the commitment to the customer to provide safe water that’s healthy. Our employees live in these communities. These are their neighbors, and they feel that.”

As CEO, Story feels a sincere commitment to developing all 7,100 employees scattered around the country, and treating them with respect and dignity. The formula has proven very rewarding for employees, shareholders and American Water Works customers.

• Market value: $59.3 billion
• 5-year average annual total return: 14.4%
• Percentage of women on board: 38%

In September 2018, Ecolab (ECL, $205.97) was named to Forbes magazine’s inaugural list of the Best Employers for Women. To make the list, companies had to rank highly on diversity, parental leave and pay equality.

Douglas Baker – CEO of the world leader in water, hygiene and energy technologies – had a simple explanation of why the company is so focused on diversity.

“To deliver exceptional value to our customers, we need the world’s best talent. And half of that talent is female. That’s why we strive to create an inclusive environment where everyone can thrive,” Baker stated in a press release acknowledging the recognition.

Baker believes that diversity and inclusion are about doing the right thing, but there’s also a business case to be made for the practice.

“I hold my team responsible for their business results, and that includes how well they are managing the company’s talent resources. If we want to grow, we need strong, diverse talent pipelines. This begins with our leadership team and the decisions we make today,” Baker wrote in a June 2018 article in the Huffington Post.

Baker has been CEO of Ecolab since 2004. Back then, women accounted for just 8% of the board of directors. Today, it’s up to 38% and rising. Over the past 15 years, Ecolab’s stock has generated an annualized total return of more than 14%, significantly higher than the S&P 500’s 9% annualized total return.

• Market value: $32.6 billion
• 5-year average annual total return: 13.2%
• Percentage of women on board: 42%
• Hershey (HSY, $155.48), one of the most iconic brands in America, is run by a woman.

CEO Michele Buck has worked at the chocolate company in Hershey, Pennsylvania, for more than 12 years. Across several promotions, the consumer goods veteran ascended from the global chief marketing officer in 2007 to chief executive in roughly a decade.

Not wanting to rest on her laurels, Buck is determined to move Hershey from its chocolate and candy core, to become a “snacking powerhouse.”

“Our largest focus for M&A is snacking and really on filling out the places that we don’t currently meet demand,” Buck told Food Dive at the February Consumer Analyst Group of New York conference in Florida. “We’re not there yet, but we’re on our journey. And I don’t think I would ever declare that we’re there.”

Since taking the top job, Buck has made two acquisitions in the snack category. Hershey paid $1.6 billion for Amplify Snack Brands, the people behind SkinnyPop; and $420 million to acquire Pirate Brands, a maker of healthier versions of cheese puffs and cheese sticks. At the time of the Amplify acquisition, SkinnyPop was thought to have almost 25% market share in the popcorn category in the U.S., as well as a significant presence in the U.K.

In 2019, Hershey expects to grow its adjusted earnings by at least 5% year-over-year to $5.63 per share.

• Market value: $47.1 billion
• 5-year average annual total return: 29.6%
• Percentage of women on board: 50%

Fortune named Progressive (PGR, $80.60) CEO Tricia Griffith one of 2019’s World’s Greatest Leaders – putting her alongside the likes of Bill and Melinda Gates, Satya Nadella, José Andrés and Michael J. Fox.

That’s quite a list. And Griffith’s quite a CEO, which is why Fortune also named her the 2018 Businessperson of the Year.

Since taking the top job in 2016 – Griffith has worked at the country’s third-largest insurance company since joining Progressive as an entry-level claims representative 31 years ago – she has grown the company’s revenues by 36%. That’s a big reason why PGR has been among the top stocks in insurance, delivering an annualized total return of more than 35.7% over the past three years.

Griffith combines a natural interest in people with an eye to the future. Progressive, a big believer in artificial intelligence, launched Snapshot in 2017. This usage-based insurance program charges premiums based on a customer’s driving habits. Since launching the app, it has been able to gather more than 1.5 billion miles of driving data, which helps it stay ahead of the competition by offering lower premiums to safer drivers.

As for the people side of the business, Griffith enjoys meeting with employees in the company cafeteria.

“My favorite part, usually on Fridays, (is when I) walk down here and I grab a lunch, and I randomly sit with people I’ve never met,” Griffith told Cleveland TV station WKYC in February.

How many CEOs of multibillion-dollar companies regularly chow down with their employees? Likely not many.

• Market value: $63.1 billion
• 5-year average annual total return: 27.5%
• Percentage of women on board: 33%

Just squeaking into the list with four women out of a total board of 12, S&P Global (SPGI, $256.19) is an excellent investment despite the fact it can do better when it comes to gender diversity.

That said, Monique Leroux’s addition to the board in 2016 was a brilliant move. Leroux was the CEO of Desjardins Group, a Quebec-based financial cooperative, from 2008 to 2016. In those nine years as the chief executive, Leroux took the co-op from a broken financial services company to become Canada’s sixth-largest deposit-taking institution by revenue in the country.

Many boards have men and women well past their prime. Not so with Leroux – a very good thing if you own SPGI shares.

As for the company itself, S&P Dow Jones Indices, the company’s indexes unit, has been busy launching a global family of environmental, social and governance (ESG) indices. For example, the S&P 500 ESG Index replicates both the risk and reward found in the S&P 500 while adding ESG criteria to the mix.

Companies excluded from the new index include tobacco producers, makers of certain weapons, and companies that score poorly on the United Nations Global Compact’s universal principles of corporate sustainability.

SPGI has rocketed ahead by more than 50% through May 2, and it has generated a 10-year annualized total return of 24.7%.

• Market value: $115.3 billion
• 5-year average annual total return: 26.1%
• Percentage of women on board: 40%

It has been 19 months since Starbucks (SBUX, $96.30) elevated Rosalind Brewer to chief operating officer.

Brewer joined the company’s board in January 2017 after meeting former CEO and executive chairman Howard Schultz at a Walmart (WMT) panel discussion a couple of months earlier. At the time, Brewer was running Sam’s Club, the retailer’s warehouse club division, and wasn’t looking for another board seat. But Schultz persuaded her to accept his invitation. A month later, she resigned from her job at Sam’s Club to search for her next leadership adventure.

Current CEO Kevin Johnson took the helm at Starbucks in April 2017, providing him an opportunity to get to know Brewer at board meetings and other functions. By October 2017, Brewer was in the COO role, making her the company’s second-highest ranking officer. Since that time, SBUX stock is up nearly 75%, thanks in large part to its Chinese expansion.

Starbucks’ board also features the CEO of another company on this list of top stocks for gender diversity. (We’ll get to her in a minute.)

• Market value: $23.4 billion
• 5-year average annual total return: 10.3%
• Percentage of women on board: 36%

Synchrony Financial (SYF, $35.26) doesn’t have an uber-high ratio of women to men on the board, but it’s at least more than a third – and a woman helms the company, too. CEO Margaret Keane has been chief executive since its initial public offering in July 2014 – part of a multiyear split from General Electric (GE) that was finalized in November 2015.

Before becoming CEO, Keane spent 18 years at GE Captial, where she held several senior positions for over a decade before getting the call to run the consumer finance business.

Synchrony shares have been a rollercoaster ride. It went public at $23 per share, then hit both $25 and $35 on four separate occasions. SYF has had a phenomenal run in 2019, up 50% before even including dividends, though that comes on the heels of a 37% decline in 2018.

Gender diversity has yet to hit U.S. banks and other financial stocks, with just three female CEOs amongst the 100 largest banks in the country; Keane is one of them. Ever since she took the top role, though, she has worked diligently to improve the company culture, making it a more diverse and welcoming financial institution.

“I can’t change the world,” Keane told the attendees of the 2018 Ellevate Action Summit. “But what I can change is how we treat employees inside the company; understanding what they’re going through when they walk outside of their house and come to our office.”

Synchrony’s CEO started her career in a finance call center, so she appreciates that its employees, who work the phones and are paid hourly, need a path to future development. To accomplish this, Synchrony’s created STEP: a two-year development program that gives call center employees training in other parts of its business.

Unlike the rest of the top stocks on this list, SYF shareholders have yet to be truly rewarded for Keane’s big-picture thinking. But Synchrony’s strong financials suggest that won’t be the case for much longer.

• Market value: $64.2 billion
• 5-year average annual total return: 15.2%
• Percentage of women on board: 45%
• TJX Cos. (TJX, $52.96) publicly lists a couple of stats that show it’s serious about board diversity: Five of its 11 board members are women, and seven of its 11 board members reflect gender or ethnic/racial diversity.

Executive Chairman Carol Meyrowitz was the multi-banner discount retailer’s chief executive for nine years from January 2007 to January 2016. In that time, TJX stock appreciated by 360%, or 19.5% annually. Since CEO Ernie Herrman entered the top job in January 2016, it still has done well, but averaged less, up 14.9% on an annualized basis.

While retail stores have blown hot and cold over the past decade, TJX has managed to keep the ball rolling up the hill by delivering top-name merchandise at discount prices. Brick-and-mortar store closings continue to be a problem in the retail industry, yet TJX keeps opening stores and growing its sales. TJX reported revenues of $39 billion in fiscal 2018, including same-store sales growth of 6% – three times its comps growth in 2017. Its adjusted earnings per share of $2.11 were 9% higher than the year-ago figure.

TJX also is a big generator of free cash flow, which it has used to repurchase $22.1 billion worth of stock over the past 20 years. The retailer has reduced its share count by more than a quarter over the past decade alone, enriching shareholders along the way.

• Market value: $20.3 billion
• 5-year average annual total return: 29.6%
• Percentage of women on board: 56%

If there’s a business you would expect to have gender diversity figured out, it would have to be Ulta Beauty (ULTA, $346.70), the experiential beauty retailer that’s part cosmetics store and part hair salon.

CEO Mary Dillon is one of the best chiefs in recent U.S. corporate history. She has assembled a board of directors and management team that reflects a diverse group of employees and customers – more than 50% of the board and top management is made up of women – and she has richly rewarded shareholders.

Fighting tooth and nail with Sephora, part of the massive LVMH (LVMUY) organization, Dillon has been able to carve out a significant piece of beauty retail in America. Soon, Ulta will be replicating its omnichannel success in Canada, opening stores from coast to coast starting in late 2020 or early 2021.

“Ulta has some significant advantages – it is an energetic, aggressive competitor with a lot to offer customers,” Pamela Danziger, president of retail consultancy Unity Marketing, told The Globe and Mail in April. “It creates an energy in the store which is what malls need desperately today to survive.”

Since Mary Dillon became CEO in June 2013, Ulta’s stock has gained 262% on a cumulative basis, or 23.1% compounded annually. She also has helped lift Starbucks since being appointed to its board in January 2016.

Who says gender diversity doesn’t pay?

• Market value: $249.5 billion
• 5-year average annual total return: 11.1%
• Percentage of women on board: 44%

It has been a hectic year for Walt Disney (DIS, $138.52) CEO Bob Iger, who closed on his $71 billion acquisition of numerous 21st Century Fox assets in March and is launching a streaming competitor to Netflix (NFLX) and Amazon.com’s (AMZN) Prime service later this year.

Luckily, the four women serving on Disney’s board are all working CEOs or high-ranking executives. That gives Iger some excellent talent to lean on for feedback and advice for the myriad decisions he must make as the head of the world’s most iconic entertainment brand.

Later in 2019, Disney will launch Disney+: a streaming service that many are calling a Netflix killer. Priced at $6.99 – less than half the premium rate Netflix charges monthly – Disney+ is looking to steal Reed Hastings’ thunder.

“Disney+ has every possibility to get as big as Netflix,” CFRA Research analyst Tuna Amobi told BNN Bloomberg in April. “Reaching tens of millions of subscribers would be quite feasible, maybe even conservative. I would be surprised if the service does not reach 100 million subscribers over time.”

While Disney likely will gain millions of subscribers with its streaming service, many of those subscribers also will continue to use Netflix. That’s because 36% of U.S. households with broadband subscribe to two or more streaming services.

However, Disney can market its various products and services (including Disney+) across all of its multiple businesses – theme parks, cruise ships, retail stores, broadcast television, cable TV, ESPN – which should keep it among America’s top stocks overall in the years ahead.

Editor’s note: This is the second part of a three-part series on trusts for people with substance use disorders. Click here for part one and here for part three.

Parents naturally want to protect their children and help them when they have problems by guiding them in the right direction. When that problem is a substance abuse disorder, one way they do that is by drawing up a trust. But unless they’re very careful about how they structure the trust, they could unwittingly deprive them of the powerful safety net provided by Supplemental Security Income, Medicaid and Social Security Disability Income.

When designing a trust for a beneficiary with a substance use disorder, you should anticipate that the child, if over 18, may at some point become eligible to receive government-provided benefits from Supplemental Security Income (SSI) and Medicaid, and possibly Social Security Disability Income (SSDI), all of which may help pay their living and recovery-based expenses. Eligibility will depend on whether they are “disabled,” as defined by federal law, and have a minimal level of countable assets.

Parents who are drawing up a trust for a child tend to already have the assets to care for an heir who is struggling. But notwithstanding that SSI and Medicaid are needs-based programs with strict resource limits, not many people, even of means, are willing to ignore available government benefits. Relying on these benefits, in fact, can be a good first line of defense in preserving the family’s assets.

There are several considerations to take into account to preserve these benefits, but the process can be convoluted for those going through it for the first time.

The Basics on Public Benefits

Eligibility for SSI will entitle the child to receive a monthly benefit of up to $771 (for 2019) that can be used for their support; in addition, most states provide a small supplement to this base amount. In many states, SSI eligibility will automatically qualify the child to receive Medicaid, which will cover doctor visits, hospital expenses and many other health care costs. Beyond direct monetary assistance, eligibility for SSI and Medicaid will also allow the child access to numerous community-based programs and services, which can be very beneficial.

SSDI will pay a monthly benefit based on the child’s work history, but younger adults with substance use disorders may not have enough work credits to qualify. Alternatively, an adult disabled child of a deceased parent who had been receiving SSDA will be entitled to a survivor’s benefit if the child became disabled prior to age 22.

The ‘Disability’ Test and How It Relates to Substance Abuse

Eligibility for benefits depends, first, on whether the child has a “disability,” as the term is defined by the Social Security Act. As far as the government is concerned, it means that they are unable to engage in any substantial gainful activity because of a serious, medically determinable physical or mental impairment, and that the disability has lasted, or is expected to last, for at least one year or to result in death.

This test will likely be difficult to meet for an adult child with a substance use disorder. First, substance use disorder by itself is not considered an impairment that qualifies as a disability. Second, even if the child has a separate mental health impairment that is recognized as the basis for disability (e.g., bipolar disorder, major depression or anxiety, OCD and panic attacks), the child’s substance abuse will negate his eligibility if it is found to be a material contributing factor to the impairment.

The key question will be whether the child would still be disabled if they stopped using drugs or alcohol. For example, if a person with a substance use disorder cannot work because of an impairment caused by lupus, which is a recognized basis for disability, his stopping the use of drugs or alcohol would not improve the lupus, and thus would not affect the finding of disability. On the other hand, if the person with a substance use disorder cannot work due to major depression and anxiety, his ceasing the use of alcohol may be enough to improve his condition to the point where he could engage in substantial gainful activity, in which case he would not meet the test for disability.

Limits on ‘Countable Resources’

SSI and Medicaid eligibility will also require that the child possess “countable resources” that have a value of not more than $2,000, in most states. (Benefits under the SSDI program are based on the work history of the applicant or his parent, without regard to resources.) “Countable resources” generally refer to cash and assets that can be converted to cash, including assets held in a trust that can be used for the child’s maintenance and support.

A substance abuse trust created for the child’s benefit will thus be examined by the state to determine if the trust property can be classified as a countable resource. If it is, that will almost certainly cause the application for SSI and Medicaid to be denied until the trust property has been almost completely exhausted.

Careful: A Trust Can Be Considered a Countable Asset

A trust funded with the assets of the parents or other third parties will be treated as a countable resource if, by its terms, the trustee has a duty to provide for the beneficiary’s maintenance and support. Careful drafting is essential here, since the typical trust language found in form books, which require distributions to be made for the beneficiary’s “health, maintenance, and support,” will cause the trust to be considered as a countable resource. To avoid that, at a minimum, the words “maintenance” or “support” should not be found in the trust document.

The trust also should restrict the purpose of distributions to paying for services that will only supplement, but not supplant, all the benefits the beneficiary is eligible to receive from any government-funded program or private insurance policy. This language makes it clear that benefits received from the government-based programs are to be the primary source of the child’s maintenance and support.

To further express the parents’ intent in this regard, the trust can contain a list of “extras,” such as personal care services, travel and entertainment, that would serve as examples of what would be a permissible use of trust funds.

Applying this concept of “extras” to a substance abuse trust, issues may arise as to whether one or more recovery-related expenses — such as the child’s stay in a rehab facility, tuition at a job-training center or the professional fees for medical, clinical and therapeutic services — will be treated either as “extras” or as falling within the definition of maintenance or support that could cause the trust assets to be treated as available resources. To eliminate uncertainty, the trust document can state as an overarching principle that the trustee’s discretion to make disbursements will be limited in all cases to only those goods and services that are not otherwise fully paid for by SSI, Medicaid or any private coverage insurance.

Income Considerations

The child’s earned income will reduce the SSI payment by 50 cents for each dollar earned. Unearned income, on the other hand, such as income distributions from the trust, will reduce the SSI payment dollar-for-dollar. However, there is a special allowance, In-Kind Support and Maintenance (ISM), for food or shelter provided directly to the child and paid for by a third party, including the trustee of a trust. This type of unearned income will not cause a dollar-for-dollar reduction of the SSI benefit, but will be limited to a maximum reduction of one-third of the benefit, regardless of the actual value of the food and shelter being provided.

Based on these rules, when the child is receiving government benefits, the trustee should generally avoid using trust money to provide him with food or groceries, rent or mortgage payments, property taxes or utilities. However, the trust need not specifically forbid all expenditures for these purposes, if it would be in the child’s best interests that it do so, even if it would result in a reduction in the child’s SSI benefits.

For example, assume that a child who is eligible for SSI has just completed an in-patient drug treatment program and now needs a new place to live. He found an apartment near to where he will be taking a job-training course, as well as where he will be attending out-patient therapy sessions. The rent will be $1,500 per month, which obviously is more than the child’s monthly SSI benefit of $771, and he has no income or assets to make up the difference. If the trustee would agree to have the trust pay all the rent, under the ISM rules the $771 benefit would be reduced by $277 (one-third of the benefit, or $257, plus $20), leaving the child with $494 per month. Based on the math, the trustee could reasonably conclude that the advantages to this living arrangement outweigh the disadvantage of the $277 monthly reduction, especially since the child will continue to be eligible for SSI and Medicaid benefits.

Each case is different, so consulting with an attorney is advised to help determine the best strategy going forward and ensure the child maximizes the benefits they can receive.

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.

Editor’s note: This is the first part of a three-part series on trusts for people with substance use disorders. Click here for part two and here for part three.

When planning their estates, an increasing number of families find themselves needing legal advice on how to address the reality that one of their intended beneficiaries, typically a child or grandchild under age 40, is addicted to opioids or alcohol.

The idea of creating a trust for such a child is a given, but what type of trust is most suitable? Trusts to benefit a child who is a minor or has an intellectual disability, such as Down syndrome, will not work, because their purposes will differ greatly from those for a trust for a child with a substance use disorder. Most families will need help in learning the steps to take in this unique but, sadly, not so unusual process.

Identifying the Purpose of the Trust

Every trust should have a purpose, the more clearly stated the better. To identify the parents’ purposes for creating a trust for their child with a substance use disorder, they should have an in-depth discussion with their attorney and other advisers to help them clarify what role they want the trust to play in their child’s recovery. For instance, they could decide to have the trust play a passive role, where it would operate independent of any recovery efforts. Trust distributions could be made for the child’s basic support, or they could be more limited to providing only the “extras” that, in the trustee’s discretion, would make the child’s life more enjoyable.

By contrast, the trust could be given an active role to play, with the trustee — the individual or institution designated to administer the use and distribution of the trust’s assets — being directed to work proactively with the child’s treatment team and to pay for the costs incurred in carrying out the treatment plan (for example, paying for the costs of a rehab facility and for the services of clinicians and therapists). With this model, no distributions would be allowed if they were not related to the child’s recovery.

Understanding the Stages of Recovery

If the parents want the trustee to be actively involved in the child’s recovery, it is important that the trustee has an understanding of what recovery from a substance use disorder will entail.

First, the notion that a person can completely change their addictive behavior by attending one 30-day or 60-day rehab program should be dispelled. A highly regarded model for change of behavior, referred to as the Transtheoretical Model, posits that people do not quickly or decisively change their behaviors. Rather, such changes occur gradually, in several stages, which can be described as follows:

1. Precontemplation Stage (Not Ready): The child denies the existence of their addictive behavior and remains unmotivated and resistant to change.
2. Contemplation Stage (Getting Ready): The child experiences feelings of ambivalence and conflicting emotions concerning their addictive behavior.
3. Preparation Stage (Ready): The child begins to experiment with small changes in their behavior and settles on a plan of action.
4. Action Stage: The child takes direct action toward changing their addictive behavior.
5. Maintenance Stage: The child maintains their new behaviors and develops coping strategies to prevent relapse.
6. Relapse Stage: This stage, which could be expected to occur one or more times, will be accompanied by feelings of disappointment, failure and frustration. But the child will experience a sense of progress as the time periods between each relapse become longer and longer.

Parents should keep this model of change in mind as they design the trust, especially in describing how it should treat the — perhaps inevitable — event of relapse. Rather than punishing the child for relapsing, the focus should be on how the trust can provide the resources that will help the child continue on the difficult road to changing their addictive behavior.

Creating a Treatment Plan

An essential component of the child’s recovery will be to follow the treatment plan that will be developed and revised from time to time by the child in coordination with a team consisting of their attending physician, care manager, therapist, rehabilitation specialist and other care providers. Examples of goals found in a treatment plan include:

• Remaining drug-free and sober for a significant period.
• Meeting on a continual basis with a CBT (Cognitive Behavior Therapy) therapist, physician and psychologist, and participating in AA or NA meetings.
• Pursuing vocational training, and providing proof of continued employment in a job suitable for their skill level.
• Submitting to random blood and urine testing to determine if they are engaged in addictive behavior.
• Avoiding people and environments that are known triggers for a relapse.

Offering Incentives, NOT Cash

As an additional component of the trust, the trustee could be authorized to lay out a series of incentives, based on the same goals as stated in the treatment plan, that if met could result in discretionary rewards from the trust for the child’s direct benefit.

For beneficiaries with a substance use disorder, the rewards for achieving an incentive should be of a strictly non-monetary variety, such as paid vacations, club memberships, the use of a car, or personal services. Paying cash for meeting incentives will almost always be a bad choice, since having cash in hand may create too great of a risk of a relapse. In fact, it may be necessary to direct the trustees not to provide even tangible assets that could be sold for cash.

Practical issues will arise with the use of incentives. How burdensome will it be for the trustee to monitor the beneficiary’s achievements? Will the beneficiary be expected to self-report their successes and failures? How easy would it be for a clever beneficiary to rig blood and urine test results, or present the trustee with fake employment or therapy attendance records?

Rather than using a monitoring approach that relies on criteria susceptible to manipulation, an alternative would be to have the beneficiary provide evidence of their compliance, but always give the trustee the ultimate authority to determine if an incentive has been met, using whatever objective and subjective criteria deemed reasonable.

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.

The Standard & Poor’s 500-stock index is on pace for well-below-average gains in 2018. While the 2% improvement year-to-date isn’t exactly catastrophic, it is disappointing compared to most expectations for the year, and it has been littered with several shares that have simply been cleaved. But there is a silver lining: This has created a number of deeply discounted stocks to buy.

History has shown us that when rates rise, stocks typically decline – at least temporarily. This was the case in 1994, 2006 and last February. The market’s latest swoon, caused in part by more upward pressure on interest rates, may be painful, but it too may just be temporary. That’s little comfort to owners of numerous stocks that have fallen precipitously off their recent highs. But that is good news for bargain hunters that are looking for battered stock picks to grab up off the ground.

Here are 10 deeply discounted stocks to buy – companies that are anywhere from 20% to 50% off of their 52-week highs:

Data is as of Nov. 12, 2018. Stocks are listed in alphabetical order.

• Market value: $19.5 billion
• 52-week range: $34.14-$9.04
• % off 52-week high: 44.3%
• Advanced Micro Devices’ (AMD, $19.03) stock still is doing fantastically in 2018, up 80% for the year-to-date. Wins in several markets – client CPUs, server GPUs and graphics chips for data centers and gamers – have revived the previously struggling chipmaker.

Still, AMD stock is off by well more than 40% since September amid a broad selloff in technology, and thanks to a disappointing Q3 report. The company’s revenues, while up year-over-year for the fifth straight quarter, missed expectations, as did fourth-quarter guidance.

Stay focused on the longer-term fundamental outlook. Many analysts believe AMD can maintain its momentum and challenge Intel (INTC) and Nvidia (NVDA) through a combination of licensing and customization. Moreover, the company is becoming much better at turning its growth into profits. Wall Street analysts expect 170% growth in adjusted earnings this year to 46 cents per share, followed by another 37% pop to 63 cents per share in 2019. Remember: This was a company that, before 2017, hadn’t turned a full-year profit since 2011.

• Market value: $50.3 billion
• 52-week range: $110.81-$70.09
• % off 52-week high: 35.9%
• Celgene (CELG, $71.02) is off more than 30% from its 52-week high, much of which came from October’s downdraft. Generally, investors are nervous about the portion of revenue — north of 60% — that comes from blockbuster drug Revlimid, which treats multiple myeloma, a white blood cell cancer. They’re also nervous that Revlimid will face generic competition starting in 2022. Further, a blunder with the FDA last year for multiple sclerosis treatment ozanimod and the failed trial for a Crohn’s disease drug have not been forgotten.

But investors may be fretting about Revlimid too much and forgetting that Celgene is continuing to grow. Celgene’s profits have expanded by more than 17%, compounded annually, over the past five years. And diluted earnings for the first nine months of 2018 have come to $4.02 per share, already besting last year’s full-year earnings of $3.64.

Celgene actually has a deep pipeline for drugs to treat lymphoma, anemia and multiple sclerosis. Celgene’s formulations are expected to hit the market in 2019 and 2020. Analysts at CFRA — a unit of Standard & Poor’s — believe that Celgene could introduce five meaningful drugs by 2020. Celgene is acquisitive, too, and healthy cash flow from Revlimid can finance new deals while pipeline products gain traction.

• Market value: $11.4 billion
• 52-week range: $67.08-$35.44
• % off 52-week high: 26.6%

There’s almost no company like Copart (CPRT, $49.27), the globally operating leader in online vehicle auctions. It has other businesses, too, including processing and selling salvage vehicles to dealers, “dismantlers,” rebuilders and exporters on behalf of banks, finance companies, insurers and fleet operators.

Copart sold off nearly 20% in September after it reported disappointing earnings. The top and bottom lines grew, but profits of 42 cents per share came up shy by 4 cents. Management dutifully explained how a variety of one-time costs, including those from Hurricane Harvey, had impacted earnings. But the Street was unconvinced, and the stock has remained stubbornly off its highs.

The miss isn’t as concerning when you consider the company still is in expansion mode; analysts see high-single-digit revenue growth in the cards for both this year and next. Also in September, Copart opened its second facility in Germany. The new facility in Leipzig can store up to 4,500 vehicles will host biweekly auctions. The location provides entry to the Eastern European market for autos, too.

• Market value: $20.5 billion
• 52-week range: $116.65-$78.78
• % off 52-week high: 26%
• Dollar Tree (DLTR, $85.99) has wildly underperformed this year thanks in large part to a trio of negative reactions on quarterly earnings. That includes an August report in which DLTR reported disappointing same-store sales and reduced its guidance for the current fiscal year.

Despite desultory sentiment, Dollar Tree still is on track to grow revenues by 3% this fiscal year, and profits by 13%, analysts say. Unlike full-price retailers who are struggling to squeeze top-line gains into bigger bottom lines because of competition from e-tailers, Dollar Tree is somewhat detached. Its Dollar Tree merchandise sells for $1, and its customer base tends to do little online shopping.

Today, Dollar Tree operates more than 15,000 stores across its namesake brand and Family Dollar, which it purchased in July 2014. For context, Walmart – America’s largest retailer by revenues – operates 5,358 stores. Analysts point out that while DLTR is underperforming rival Dollar General (DG), which is trading near 52-week high, shares of the former may offer more upside.

Also intriguing is a new stake by activist shareholder Carl Icahn, who some believe will push Dollar Tree to exit the Family Dollar purchase via a sale or spinoff.

• Market value: $26.8 billion
• 52-week range: $151.26-$86.01
• % off 52-week high: 42.0%
• Electronic Arts (EA, $87.66) makes video games, but it is constantly changing as it strives to provide quality content. EA’s Star Wars: Battlefront is among the top performing games in the industry, and its success is likely to be continued through future editions. Digital sales — versus packaged software — currently contribute more than half of Electronic Arts’ revenue, and management aims to increase that amount in order to benefit from the higher margins on digital, while also enabling it to distribute more of its content to current customers.

The company is putting resources behind its eSports and mobile gaming, which could boost growth.

Electronic Arts’ strategy is aided by some compelling macros and trends. Among them are 2.6 billion gamers around the world and EA’s 300 million registered players, who it can market new and upgraded products to. Further, EA has demonstrated its ability to capitalize on favorable gaming trends. Through the fiscal year ended in March 2013 through the fiscal year ended in March 2018, earnings have exploded from 31 cents per share to $3.34, or about 61% compounded annually. (Though it masks some lumpiness in between.)

• Market value: $3.3 billion
• 52-week range: $287.79-$112.78
• % off 52-week high: 51.4%
• Inogen (INGN, $139.93) shares have been halved since their September peak, and much of that came after the company reduced full-year guidance for EBITDA (a measure of operating profitability that backs out items such as interest and taxes) to a range of $60 million-$62 million from a range of $65 million-$69 million. That’s mostly because of continued sales and marketing investments expected in the fourth quarter of 2018. The balance of the drop appears to be tied to the overall downdraft in the market that started in mid-September.

Neither of these reasons justify cutting the company’s value in half.

Millions of Americans rely on some form of oxygen therapy for chronic obstructive pulmonary disease (COPD), and Inogen has brought innovation to the market to rapidly earn share with a portable oxygen concentrator. Portability offers patients a vast improvement over bulky oxygen tanks and has expanded the size of the overall addressable market. The advantages portability offers are equally disruptive in international markets.

Inogen is capitalizing on these dynamics with an aggressive direct-to-consumer sales network, increasing its business to business efforts with financing and private-label partnerships, and aggressive international expansion. Since 2015, INGN has grown revenues from $159 million to an estimated $345 million to $355 million this year, and adjusted EBITDA from $8.1 million to the expected $60 million-$62 million range.

Wall Street has overreacted to INGN’s bad news. This is still a briskly growing company that decided to invest in itself.

• Market value: $5.6 billion
• 52-week range: $23.08-$15.76
• % off 52-week high: 22.1%

Low-cost airline JetBlue (JBLU, $17.99) is also flying well below the clouds, but it has a plan to gain altitude. At a recent investor day, management said the company is aggressively switching capacity from underperforming destinations such as Daytona Beach, St. Croix, Baltimore, Detroit, Pittsburgh, the District of Columbia and Santiago (Dominican Republic), and adding capacity in more profitable routes emanating out of Boston and Fort Lauderdale.

The dip in shares comes at an inflection point in JetBlue’s growth and development. Bank of America/Merrill Lynch thinks that the company has now achieved the scale required to effectively compete in the capital-intensive airline business and can now focus on more returns-oriented investments like its premium Mint service — JetBlue’s version of first class — as well as its cost-cutting initiatives.

Airline profits are often a rollercoaster affair, primarily because of fuel costs, but JetBlue expected to keep growing revenues steadily at 9% annually this year and next.

• Market value: $4.5 billion
• 52-week range: $127.32-$83.78
• % off 52-week high: 20.3%
• National Beverage (FIZZ, $101.45) has been dogged with shareholder lawsuits and claims that its LaCroix sparkling beverage brand isn’t as natural as the company claims. But these seem like border skirmishes that don’t really detract from the underlying fundamentals of the company, which include a singular focus and growth on both the top and bottom lines.

In September, National Beverage announced it achieved the billion-dollar mark for annual revenues, on Q2 revenues of $292.6 million that marked the company’s 15th consecutive quarter of top-line growth. Earnings, while volatile, increased from $1.01 per share in 2013 to $3.19 in the fiscal year ended April 28, for compound annual growth of nearly 26%.

While $1 billion in sales may not sound like much compared to the likes of Coca-Cola (KO), which delivered $35.4 billion in sales last year, National Beverage’s focus on sparkling water and juices creates a much more compelling, albeit riskier, growth profile.

Looking ahead, initial efforts to penetrate the Canadian market have shown the LaCroix brand to be popular with consumers there, which is encouraging given the strong global demand for sparkling water.

• Market value: $2.4 billion
• 52-week range: $36.90-$18.76
• % off 52-week high: 45.6%
• Penn Gaming (PENN, $20.06) is a regional casino stock that operates or owns interest in 40 gaming facilities across 18 states. Its portfolio spans 49,400 gaming machines, 1,200 table games and 8,800 hotel rooms.

The stock has been falling steadily since July, but growth drivers could change the story. On Oct. 15, Penn completed its acquisition of Pinnacle Entertainment, cementing its position as a regional gaming leader. Penn said in a press release that it expects the deal to be accretive to Penn National’s free cash flow per share in the first year after closing, and that the deal should enjoy about $100 million in expected annual run-rate cost synergies.

In addition, sports betting may make a material contribution to Penn’s top and bottom lines as it rolls it out across its broad portfolio of properties.

• Market value: $2.4 billion
• 52-week range: $43.95-$31.08
• % off 52-week high: 25.1%

Freight hauler and logistics company Werner Enterprises (WERN, $32.93) has been punished in 2018, with shares losing a quarter of their value from its 52-week high.

Although its profit margins lag those of other top freight companies such as Knight-Swift (KNX), look for improvement in already-solid margins over the next several years because of Werner’s fleet investments. Today, the average age of trucks in Werner’s fleet is 1.8 years, versus approximately six years for the industry.

Further, Werner has been addressing a persistent labor shortage with pay increases of approximately 27% since 2015, recruiting among veterans and training at 13 locations around the country. Another positive driver, according to Wells Fargo analysts, is that truckload capacity is getting scarce, adding a tailwind to pricing.

The fear of machines taking our jobs dates back hundreds of years, to the Luddites of England, who fought mechanical weaving tools in the early 19th century. But it has gotten new life as the combination of big data, improved algorithms, and raw computing power has rapidly accelerated artificial intelligence (AI).

Some jobs, such as top levels of management, doctors and many teachers, will feel limited effect from AI and the robots and systems it powers. Many of us in the middle will see some of our tasks automated: A study by the McKinsey Global Institute, a think tank, estimates that "60 percent of occupations have at least 30 percent of constituent work activities that could be automated." And for some, the writing is on the wall: The robots will take over.

Most (but not all) of these jobs have repetitive functions and a fairly controlled environment. Many (but not all) don't pay well. Will you still be able to find a human at the wheel of a taxi in 2040? Probably; after all, you can still get your typewriter repaired today.

What are the main responsibilities of a shopkeeper? Keep track of the inventory, collect payment and answer questions (with the goal of making sales).

As any supermarket shopper knows, employees are already vanishing from the checkout process as stores turn that responsibility over to the consumers themselves. The Amazon Go store in Seattle (no checkouts, no lines – the Amazon app and in-store sensors handle it all) is an extreme vision of where we’re headed.

Devices that move around, handling goods and fielding questions, are also coming. Tally, from Simbe Robotics, performs the repetitive and laborious tasks of auditing for out-of-stock items, low-stock items, misplaced items, and pricing errors. It can work with stores’ existing layouts, and the device can move alongside customers during shopping hours. Oh, and folding clothes and returning them to neat stacks? The robots will handle that, too, eventually.

The hardest part of the retail job for robots to replace will be the human interaction – "What can I help you find today?" But here, too, companies are making inroads. In Japan, arguably the home of humanoid robot development, SoftBank Robotics has sold thousands of its Pepper robots. They can gesture and interact verbally, and the company claims that they can interpret human emotions. Stateside, a few are in testing by the Mall of America in Minneapolis.

The Pepper and Tally robots are what many people think of as "real" robots -- capable of autonomous physical actions in the same environments as people.

But when it comes to job displacement by artificial intelligence, some of the most vulnerable positions require nothing more physical than keystrokes. If a robot can learn what's supposed to be in the aisles of a store (and what to do when something's out of place), then looking at gobs of financial data to see what's normal and what's out of place is easy.

Getting reports ready for a corporate filing, for example? Software products such as Automation Anywhere, Datamatics and Blue Prism can automate a range of clerical work. The systems can be trained by "watching" a human copy data from an Excel file and paste it into another data software tool. Then there's the analysis. Products such as PricewaterhouseCooper's Halo, for example, can process all of a firm's data to look for anomalies, rather than relying on a sample audit.

Humans will still be involved in training the bots and in and the highest levels of analysis, but the rote work -- copying and pasting, sorting and reordering -- will be gone.

At the front counter, kiosks are replacing staff -- this is already widespread at Panera and McDonald’s, for example. With access to big data on consumer behavior, as well as local conditions (weather’s hot? Push the iced drinks), they can upsell more effectively than someone muttering "Do you want fries with that?"

Similarly, mobile-ordering apps are threatening the job of the person on the other end of the drive-through. But robots will move into the kitchen as well, as fast-food firms respond to rising minimum wages (and worker shortages) by investing in automation to do prep work, cook and clean.

A preview of how robots might send short-order cooks packing is playing out at at the CaliBurger in Pasadena, Calif., where "Flippy," a robot arm, is turning out hundreds of burgers each lunch shift. Flippy was developed by Miso Robots of Pasadena, and its funders include Cali Group (the burger chain’s parents), which expects to roll out Flippies at more than 50 CaliBurger locations by the end of 2019.

Another vision of the culinary future is in downtown Boston, around the corner from the statehouse, where four MIT-trained engineers have developed what they say is the "world’s first restaurant featuring a robotic kitchen that cooks complex meals." The menu at Spyce, developed with input from chef Daniel Boulud, features bowls with chopped ingredients. Seven robotic woks combine and cook prepared ingredients for each order; a human, called the "garde manger," adds cold garnishes and handles quality control.

Autonomous cars get lots of buzz from the prospect of eliminating the drudgery of commuting and improving safety for individual drivers. But autonomy has huge appeal to industries that pay people to drive, trucking first among them. That's not just because of the cost savings; currently, there's a shortage of human truckers. As many who’ve taken the wheel of a big rig will tell you, it’s a tough job with so-so pay.

In testimony to Congress, Chris Spear, president and CEO of the American Trucking Associations, put the current shortage at 50,000 drivers. "If these trends continue," he said, "the shortage could hit over 150,000 in a decade. And as the shortage becomes more acute, it will begin to affect the ability of goods to be delivered on time, which is becoming more important in today’s on-demand economy."

A number of pilot programs are in place (with a human providing backup), including a program hauling Frigidaires along I-10 in Texas, led by a company called Embark. One potential intermediate step: "platooning," in which a lead truck driven by a human is followed by a series of driverless ones. That saves not just on drivers' salaries, but on fuel, because the driverless trucks can tuck in close behind the lead vehicle to draft, like race cars.

But the biggest gains in taking the human out of the picture will come in that on-time efficiency Spear speaks of, because human truck drivers are limited to about 10 hours at the wheel per day. A driverless truck could cut a cross-country run from about five days to two.

Notice how Uber, Lyft and others turned the taxi business upside down? Their interest in disruption (and profit) mean these companies are among the most interested in letting the robot take the wheel when the cargo is humans.

A recent fatal collision between an Uber autonomous vehicle and a pedestrian is a setback for sure, but there is a huge amount of money and talent behind this effort. In addition to Uber and Lyft, Waymo (backed by Google), Cruise (backed by GM), Intel and others are among those deeply invested in taking the human out of the loop.

Waymo looks to be in the lead to bring an actual product to market. The firm is recruiting passengers in a number of Phoenix suburbs to join its pilot program in 2018.

If the ride-hailing services can have their robotic cars drive people around, certainly one can bring you a pizza. However, using a 3,000-pound vehicle to deliver a three-pound item doesn’t make much sense, certainly not in dense urban areas where parking is at a premium. That's where smaller, sidewalk-savvy robots are set to come in. Starship, a six-wheeled cooler that can only be opened by the designated recipient (using a smartphone app), has been the recipient of substantial venture capital -- so it seems only fitting that Intuit’s campus in Silicon Valley has been one of the many places it has been tested. Starship’s founders are hoping to scale up this year. Other players in this field include e-novia YAPE (from Italy) and Marble (San Francisco).

A human's ability to easily scale stairs to deliver to a doorway will be an advantage these wheeled robots will find hard to overcome, but ultimately, the economics are in the robot's favor. And they don't take tips.

Better, cheaper cameras that can operate in low light are already nibbling at the role of the roaming security guard checking locks (as are locks that can electronically confirm that they're secure).

Now put those cameras on a moving platform that never takes a smoke break, and you can see the threat to this career. Robots from SMP Robotics are already cruising around properties with cameras and motion sensors, and the firm even offers a version with solar panels, like the Mars rover, that allow extended service in remote areas, such as golf courses, parks and farms. Another entry in the field, Knightscope, earned a bit of undesired publicity when one of its K5 units rolled itself into a Washington, D.C., fountain last year, but the firm is pressing on with its "autonomous data machines" -- and the monitoring system that sits behind them.

In this case, we're not forecasting the end of a job. More like the end of a role, that is, "taking point" -- moving on foot as the lead element in a fighting force most exposed to enemy fire. The infantry will still be out in the field, but thanks to robots, they'll be able to stay out of danger longer.

In concept, these robots are much like the security guards -- except that they can deliver deadly force. The first iterations (one is already deployed by the Israeli Army) are vehicle-based, with the potential to roam autonomously. A human is in the loop if force is used, though.

In the future, look for more-humanoid robots that can move in tandem with dismounted infantry and head out front to have a look around. Who'll do the shooting? Big question.

The past 83 weeks have not only been quite rewarding for investors, they’ve been history-making. The Standard & Poor’s 500-stock index is now into its 83rd week without dishing out a 5% correction, gaining 32% since early November 2016. The blue-chip index’s return through the first few weeks of January 2018 was its best start to a new trading year in more than three decades.

This kind of move brings great risks, and sometimes, great opportunity.

Even the slightest hint of trouble could spark an avalanche of profit-taking by investors who already have big gains in tow. We’ve gotten a taste of that lately, with a couple of sizable setbacks reminding us that the market doesn’t always rise. On the flip side, for longer-minded investors, selloffs in quality blue-chip stocks could be viewed as an attractive buying opportunity.

Here, investors will get a look at some of the biggest near-term pullback risks among Wall Street’s most recognizable names. Each company is doing just fine, to be clear. In fact, most of these names recently have been touted as long-term bullish ideas by Kiplinger.

Those calls are based on each company’s merits, however. These 10 blue-chip stocks probably won’t be able to sidestep a short-term pullback if the recent rally’s weight simply becomes too much to shoulder. But that would be just fine for investors seeking better buy points.

Data is as of Feb. 1, 2018. Click on ticker-symbol links in each slide for current share prices and more.

Aircraft maker Boeing (BA, $356.94) is among the Dow Jones Industrial Average’s best dividend growth stocks at the moment. The company has upped its payout for six consecutive years. And given its outlook that calls for the purchase of 41,000 new passenger jets over the course of the next 20 years, it’s one of those stocks you can comfortably buy into and let it simmer for years on end.

But right this second might not be the best time to board the Boeing plane. After rallying more than 100% over the past year and tacking on another 5% in the wake of its recent fourth-quarter report, the stock’s maximum altitude for this flight may have been reached.

Just make sure to get a ticket for the next flight. Boeing expects to deliver between 6% and 7% in 2018 than it did in 2017, driving revenue of between $96 billion and $98 billion, versus analyst expectations of just $93.6 billion.

Cowen & Co. analyst Cai von Rumohr is particularly bullish, recently giving his price target on BA a 30% boost to $415 per share, and that he “can envision a $455 potential valuation on 2019 cash flow.”

Kudos to Advanced Micro Devices (AMD) and even Intel (INTC) for taking aim at the dominance that Nvidia (NVDA, $240.50) enjoys in the graphics processor market. But it’s unlikely that any organization will dethrone Nvidia now that its GPUs has become the processor of choice for artificial intelligence computations, and now that cryptocurrency mining – best achieved using GPUs – has become an industry in and of itself.

That’s why NVDA shares have managed to rally 105% since this time last year.

If we’re calling a spade a spade, however, the big gains were driven by results and hype. Yes, the company is soundly profitable and throwing off strong top-line growth. But NVDA shares now trade at a lofty 50 times 2018’s expected earnings – a tough valuation to sustain no matter how bright the future seems.

Blockchain and cryptocurrencies may be here to stay, but the mania stage of their arrival seems to have run its course. We’ll still need graphics cards to find and process this coded representation of digital money, but the unbridled demand for GPUs to mine them has been tempered. Investors may come to their senses on NVDA soon, with the right nudge, and revalue the stock at a more palatable price.

That's a big part of the reason Goldman Sachs just took Nvidia off of its conviction list. It's still bullish on the company, but no longer sees it as a must-have. Goldman Sachs analyst Toshiya Hari explained, “While we continue to see meaningful upside to FY2019/2020 estimates and maintain our Buy rating, we believe a) the long-term secular growth angle in data center is now better understood and b) near-term dynamics in cryptocurrency demand may lead to increased earnings volatility."

Shareholders of pharmaceutical company AbbVie (ABBV, $116.34) likely enjoyed 2017, but things didn’t get heroic until late January. That’s when ABBV shares soared in response to the company’s fourth-quarter earnings and revenue beat. Its 2018 outlook was better than anticipated too, catapulting shares more than 13% higher in a single day.

That might be as good as it gets for a while, though.

Leerink analyst Geoffrey Porges downgraded the stock to “Market Perform” (equivalent of “Hold”) the next day, believing all the upside had been factored in. “Naturally AbbVie’s stock could offer more upside if all of its mid-to-late-stage pipeline succeeds,” he wrote, “but we have significant revenue contributions in our model already for upadacitinib, risankizumab, Elagolix, and Rova-T.”

As analysts bow out of their bullish stances, it becomes easier for current owners to head to the sidelines, too. They already are, to a small extent. But expect a downturn to be just a temporary setback. In December, Dan Burrows deemed AbbVie one of his top health care picks, before the big bullish move. The stock’s price may have changed in the meantime, the longer-term bullish call hasn’t.

The past six months have been simply great for shareholders of megabank JPMorgan Chase (JPM, $116.87). The stock has rocketed 24% higher during the time frame, largely on the prospect of higher interest rates, which drive banking profits higher.

But it’s a very delicate balance. Rising interest rates tend to coincide with inflation, and if inflation grows at an out-of-control pace, the economy is stifled.

It remains to be seen whether the recent economic ramp-up is unfurling at ideal Goldilocks pace (meaning it’s neither too hot nor too cold). But ultimately, it may not matter. If the broad market is running into what’s only a short-term headwind, investors are likely to treat bank stocks as if we’re headed toward a nasty recession. JPM may be more sensitive to knee-jerk misperceptions right now than any other stock in focus here. Circumstances matter.

Make no mistake, though. Barring an entry into an actual, full-blown recession, any short-term dip from JPMorgan shares is a buying opportunity. Indeed, it’s UBS analysts’ only “Buy” rating among money-center banks at the moment.

Like JPMorgan, home improvement retailer Lowe’s (LOW, $103.86) is particularly subject to pessimistic chatter. And like JPMorgan, the potential for continued interest-rate hikes this year – the pros are modeling three increases for 2018 – could be interpreted in two disparate ways.

On the one hand, higher rates could be seen as an indication of economic strength that induces investments in homes. On the other hand, they may bring about a quick end to the growing interest in home-buying and home-building.

Both interpretations are apt to materialize sooner or later, but the former could take shape if investors’ perception of the economy (prodded by a short-term pullback in stocks) goes sour. It’s a problem only because LOW shares have jumped 34% since early November, leaving many investors with profits that they could take off the table at a moment’s notice. Again, it’s a matter of getting the right nudge.

Just don’t sit out for too long if you’re a fan of Lowe’s or were waiting for an ideal entry point. Dan Burrows pointed out in January, Lowe’s boasts more than 50 straight years of increased dividends. The retailer knows how to make a buck, in good times and bad.

For the record, I was the one to suggest software giant Microsoft (MSFT, $94.26) was one of the top Dow Jones stocks to buy for 2018. I stand by that assessment, too. CEO Satya Nadella is making major headway into the cloud computing market, and the company is redefining technology as a business tool. MSFT has deserved most of the 230% advance it has dished out over the past five years.

All the same, shares are up 45% over the past 12 months and nearly 25% since the end of September. It has been a rewarding ride, but a lot of nervous investors already have their finger on the “sell” button.

The big red flag here is the response to Microsoft’s recently reported fiscal Q2 results. The company beat both sales and earnings estimates for the quarter in question – news that normally would push the stock higher. However, MSFT shares have peeled back a bit. Investors may just see the glass half-empty rather than half-full as long as the market is this toppy.

Recent changes in the way Facebook (FB, $193.09) displays stories, posts, videos and news in users’ main news feed has made the social networking site less of a draw. Collectively, the 1.4 billion daily Facebook users that are now spending 50 million few hours on the site every day.

Shares had mustered a 43% advance in the 12 months prior to Wednesday’s earnings report. That was bolstered a couple more percentage points the day following Facebook’s release … but the initial response was a knee-jerk selloff. That may have been a subtle sign that some shareholders are ready to lock in some gains. Investors can be fair-weather friends.

A closer look at the results reveals more promise, however. Facebook may be struggling in terms of quantity, but it’s making up for it in quality. Last quarter’s revenue was up 47% year-over-year thanks to a breakout in ad prices and a strong performance in the growing mobile ad market.

KeyBanc Capital Markets analyst Andy Hargreaves is on board, saying about last quarter’s numbers: “News Feed changes do not impair the power of the platform. Facebook offers reach, targeting, and ad-unit quality that is difficult to match, and they are the underlying drivers of its growth.”

Ultimately, a pullback is merely a chance to scoop up more FB shares on the cheap.

• Walmart (WMT, $105.52), the world’s biggest retailer, has been a busy beaver of late. Between the acquisitions of Jet.com, as well as higher-end online apparel retailers Moosejaw and Bonobos, newfound success in growing its e-commerce revenue – it grew 50% year-over-year during the third quarter – and making the tough decision to close several stores that were beyond rehabilitating, investors have had plenty to think about.

They’ve interpreted the vast majority of this news as bullish. Walmart shares have advanced 55% over the course of the past year, and are up 34% just since the end of September.

But there is such a thing as news fatigue. We may be near or at that point with Walmart. That is, investors soon may be immune to more good news, and therefore unwilling to continue the buy-in that’s driven the impressive move we’ve seen over the last few months. A 4% drop in just four days is a potential signal of exactly that.

Once the rally stops, and if the overall market weakens, that could create just enough doubt to pull the rug out from underneath WMT. But such a pullback likely would be just a short-term affair. In the end, any dip may be viewed as a chance to step into a new position.

Networking newcomer Arista Networks (ANET, $275.00) shares may have gotten off to a slow start after their mid-2014 initial public offering. But they made up for lost time, soaring more than 360% over the course of the past couple years thanks to explosions in both revenues and earnings. ANET’s up 17% in just the past four weeks, in fact.

That’s an exciting move. But as a result, Arista’s shares trade at a frothy forward-looking P/E of 44 – rich even by tech-newcomer standards.

Deutsche Bank analyst Vijay Bhagavath recently wrote, “There is little room for error at current elevated levels,” but the vulnerability isn’t merely value-based. Bhagavath also wrote that a “resurgent Cisco is starting to make ‘strategic inroads’ into major cloud and content providers.”

There’s enough networking business to go around for Cisco Systems (CSCO) and Arista, to be sure. But that’s not the point. If Cisco is even viewed as a potential threat to Arista’s rapid growth rate, nervous shareholders could easily decide now’s the time to walk away, figuring it’s better to be one of the first ones out than the last.

However, such a pullback would be an opportunity to buy a promising computer networking company at a more reasonable price.

Last but not least, while it has led the charge of the so-called FAANG stocks, which in turn has led the broad market’s amazing rally, shares of Amazon.com (AMZN, $1,390.00) may be on the verge of a sizable downturn.

Dan Burrows recently pegged Amazon.com as one of the best stocks to own for the next decade, and for good reason. It’s the world’s most recognizable e-commerce company, and it has successfully navigated its way into a variety of offline businesses. A decade is a long time too, to be sure. Shares are getting even toppier, too, with the stock jumping nearly 5% in response to its impressive fourth-quarter earnings report.

However, the choice now is this: Do you buy shares in the wake of the 75% gain they’ve dished out in the past year? Or do you wait for a healthy pullback that could ensue should things get ugly for the market?

If your time frame isn’t measured in decades, you may want to consider locking in some of your profits right now. If it is, you can wait – just don’t sit on the sidelines too long. Stifel analysts recently referred to Amazon.com as the “TB12 of the internet,” referring to New England Patriots quarterback Tom Brady.

It just keeps on winning.

Kiplinger’s columnist and author of Investing 101 Kathy Kristof took approximately $200,000 of her own money and divided it into two pieces — $10,000 going into Vanguard Total Stock Market Index ETF (symbol VTI), and the rest going into individual stocks that she selected.

Kristof has ended her active management of the portfolio. In the table below, you can review the portfolio’s performance over its 7.5 year run.

Stock prices are as of February 15, 2019. *Received through a spinoff.

Semiconductors are synonymous with Silicon Valley. Chip makers started popping up at the southern end of San Francisco Bay as early as the 1950s. A big draw back then as now: Stanford University and its bevy of researchers and research facilities. Today, seven of the biggest publicly traded semiconductor companies still call Silicon Valley home, with headquarters in such tech-friendly California cities as Santa Clara and San Jose.

Despite the steady decline in computer sales in recent years -- semiconductors are the brains inside PCs -- all seven of these chip stocks have performed well during the current long-running bull market. In fact, six of the seven have handily outpaced the 348% total return (including dividends) of Standard & Poor’s 500-stock index since March 9, 2009. The seventh isn't far behind.

But some Silicon Valley chip stocks have performed significantly better than others over the past eight-and-a-half years. Four of the seven have even beaten the remarkable 530% total return of the Nasdaq-100 Index, which is made up of the largest non-financial stocks listed on the Nasdaq Stock Market by market capitalization. Check out Silicon Valley's best semiconductor stocks of the bull market.

Return data provided by S&P Global Market Intelligence. Prices and returns as of Oct. 13, 2017. Due to the multiple share classes issued by some companies, the Nasdaq-100 Index currently consists of 107 stocks. Market capitalization represents share price multiplied by the number of shares outstanding. The seven stocks on this list, which represent the seven semiconductor companies included in the Nasdaq-100 that are headquartered in Silicon Valley, are listed in order of total returns during the current bull market, from lowest percentage return to highest.

• Ticker symbol: INTC
• Share price: $39.67
• Bull market return: 317%
• Dividend yield: 2.8%
• Headquarters: Santa Clara, Calif.

Intel is the old-timer of Silicon Valley. The company was founded in 1968 and held its initial public offering in 1971. But Intel’s longevity is a big reason it’s one of the greatest tech stocks of all time. Through the end of 2016, the stock has generated a staggering $259 billion in lifetime wealth for its shareholders, according to stock research conducted by Hendrik Bessembinder, a finance professor at Arizona State University. Returns have been leaner during the current bull market as declining demand for PCs has hurt demand for Intel’s semiconductors. That has forced Intel, the world's largest maker of the central processing units that serve as a PC's brain, to find new ways to generate revenue growth. The expansion of cloud-based services has been a boon, thanks to its dominance of the market for server chips. Analysts at Credit Suisse think Intel is well-positioned for the long term because of its scale and investments in research and development.

• Ticker symbol: XLNX
• Share price: $72.81
• Bull market return: 421%
• Dividend yield: 1.9%
• Headquarters: San Jose, Calif.

Founded in 1984, Xilinx is another longtime denizen of Silicon Valley in the chip business that hasn't pulled its weight through the current bull market. Shares trail the Nasdaq-100 Index by 109 percentage points even after accounting for dividends. A change in the landscape promises better times ahead for the maker of programmable chip technology. Although Xilinx faces tough competition from Intel, investors are excited about the payoff from selling chips to Amazon.com’s (AMZN) thriving cloud-computing business, Amazon Web Services. And the boom in data centers beyond Amazon offers additional avenues of growth.

• Ticker symbol: MXIM
• Share price: $48.42
• Bull market return: 489%
• Dividend yield: 3.1%
• Headquarters: San Jose, Calif.

It's been steady as she goes for Maxim Integrated Products' stock for much of the bull market, thanks in part to the inexorable rise of digital mobile devices. Among other areas of operation, the company, founded in 1983, supplies chips to smartphone giants Apple and Samsung. That leaves it exposed to risk if either of those partners were to have a change of plans. But Stifel analysts say the company's ongoing diversification efforts give it multiple opportunities for growth without becoming too dependent on a single customer. So while it’s hard to imagine consumers abandoning their iPhone and Galaxy smartphones in droves, Maxim should be safe if they do since it depends on neither Apple nor Samsung for more than 10% of its overall business.

• Ticker symbol: AMAT
• Share price: $53.94
• Bull market return: 654%
• Dividend yield: 0.7%
• Headquarters: Santa Clara, Calif.

Wall Street is increasingly bullish on Applied Materials. Of the 14 analysts covering the stock tracked by Zacks, 10 call it a "Strong Buy," two have it a "Buy," and two have it "Hold." There are no “Sell” ratings. It's easy to see where the optimism comes from. Applied Materials' core business of semiconductor equipment and services benefits from today's trends. The rise of artificial intelligence, cloud computing, the Internet of Things, mobile devices and Big Data are driving increased demand for chips. As a supplier to the companies that make the chips powering all these technologies, Applied Materials finds itself in an enviable position. The company also supplies products for making displays for TVs, tablets, computers and smartphones. And don’t be fooled into thinking of Applied Materials as a relative newcomer to Silicon Valley. It was founded in Mountain View, Calif., in 1967 – a year before Intel.

• Ticker symbol: LRCX
• Share price: $189.90
• Bull market return: 938%
• Dividend yield: 1.0%
• Headquarters: Fremont, Calif.

Shares of Lam Research have seen some ups and down along the way, but the bottom line is that this supplier of equipment to chip makers delivered outsized total stock returns since the bull market began. Analysts at Zacks Equity Research note that the company continued its impressive earnings momentum with another better-than-expected profit beat in its most recent quarter. Furthermore, analysts are raising their profit estimates. Of the 13 analysts covering the stock polled by Zacks, 9 have Lam at "Strong Buy," two call it a "Buy" and two rate it at "Hold." Lam got its start in Santa Clara in 1980, making it one of the early players in the lucrative Silicon Valley semiconductor industry.

• Ticker symbol: KLAC
• Share price: $105.30
• Bull market return: 970%
• Dividend yield: 2.3%
• Headquarters: Milpitas, Calif.

The KLA-Tencor we know today came into being in 1997 from the merger of KLA Instruments and Tencor Instruments. But its experience in the semiconductor industry stretches back to the 1970s, when its predecessor companies got their respective starts. Experience has paid off. KLA-Tencor shares have delivered impressive price appreciation over the last eight-plus years of the bull market, but what really sets this Silicon Valley stock apart is an unusually generous dividend. The technology sector as a whole pays an average dividend of just 1.4%, according to Dividend.com. Suppliers of equipment to the semiconductor industry, which is what KLA-Tencor does, are even more stingy. The company's competition coughs up an average dividend yield of less than 1%. In August, KLA-Tencor hiked its quarterly dividend to 59 cents a share from 54 cents, a 9.3% increase.

• Ticker symbol: NVDA
• Share price: $194.59
• Bull market return: 2,426%
• Dividend yield: 0.3%
• Headquarters: Santa Clara, Calif.

Much like the Backstreet Boys and NSYNC, Nvidia was a unique product of the 1990s. Founded in 1993 and public since 1999, the company blossomed as computers and gaming consoles became more popular and more complex. In its early days Nvidia was primarily known in the gaming community for making high-end video graphics cards. It turns out that graphical processing units (GPUs) have a wide range of applications in today's data-rich world. From the automotive industry to mining for Bitcoins, Nvidia has customers across the business and consumer landscapes. The next big area of growth is expected to be artificial intelligence, which industry observers call the "killer app" for its chips. Analysts expect the company's sales to increase 30% this year, according to Thomson Reuters, while earnings per share should gain 40%. Bull market or not, it's reasonable to question whether shares in Nvidia can keep up such a torrid pace. After all, they've returned well over 2,000% in the past eight and a half years. But for now, at least, Nvidia is holding up its end of the bargain thanks to the impressive top- and bottom-line growth.

Imagine your frail father dons a virtual reality headset so he can "attend" his grandson's graduation and feel as if he's really there. Or your mom, forgetful about her medicine, swallows a teensy sensor encased in medication that will relay the time she took the pill and the dosage to her smartphone.

Perhaps your mother-in-law has dementia, which makes her agitated. A small robot she holds that acts like a cat, including purring, calms her instantly. Afraid she’ll wander? Your phone can alert you if she does.

Whether already in use or still being tested, aging-in-place technology is improving the aging experience for seniors and family caregivers. Part of the reason: the development of artificial intelligence, or AI, and "big data." With AI, devices can react like humans after assessing a situation and learning someone's habits. Wearable gadgets—think Fitbit on steroids—can collect and analyze health data, while medical mini-machines monitor chronic conditions and customize treatment.

"Technology is a game-changer, improving older adults' independence, engagement and health and reducing their social isolation," says David Lindeman, director of the Center for Technology and Aging at the University of California, Berkeley. "Technologies we haven't even thought of today will be on the market in the next few years."

Technology may be especially beneficial when baby boomers find they need an extra something, perhaps a friendly robot, to keep them healthy, happy and in charge as they grow older. And new technologies could help caregivers. In a 2015 AARP survey, fewer than 10% of family caregivers said they use, or have used, technology for caregiving, but 71% said they were interested.

In the coming years, aging tech is likely to follow the pattern of smartphones, which gained traction in people's lives relatively quickly. Stand-alone devices are getting smaller, and apps are increasingly available for smartphones and tablets. Plus, aging technology is getting faster, cheaper and easier to use.

What's out there today, or about to debut?

Virtual Reality Offers Real Benefits

Although it began as a teen gaming phenomenon, virtual reality, or VR, is maturing into a technology for older adults. While still in its infancy, VR for seniors is gaining fans among physicians, long-term-care staff, researchers, physical therapists and family members.

Here's how it works: A senior dons special VR goggles that show panoramic images made with a 360-degree video camera. The wearer is transported into a multisensory, three-dimensional world where he is totally immersed in a place or experience, making him feel as if he is actually there. That world might be his childhood neighborhood (via Google Maps), the beach, a faraway family reunion or a grandchild's wedding in real time.

For older adults with mobility issues or cabin fever, VR breaks up day-to-day monotony and loneliness, letting seniors "travel"—sky diving or swimming with whales, anyone?—without leaving home.

But VR offers more than just a good time. It's being studied as a way to reduce physical pain, opioid use, anxiety, stress and social isolation, and to improve mood. At Massachusetts General Hospital, doctors plan to use VR to study brain function in aging. "Individuals with dementia tend to struggle with activities such as executive function and multitasking, which can be hard to evaluate in a clinical setting," says Dennis Lally, co-founder of Rendever, a Boston company developing VR software for seniors. "With VR, it's now possible to track the human interaction with virtual tasks and leverage virtual reality analytics to measure the success of these activities." In the next few months, the hospital will begin testing the VR product.

San Francisco physician Sonya Kim says when she first introduced VR to depressed and agitated patients, she thought, "Wow! This is phenomenal! People are happy!" In 2014, Kim developed Aloha VR, which she uses in group therapy sessions. "Our goal is to improve the quality of life for older adults, and through VR, take senior care to the next level," says Kim, even for patients being treated for dementia. She has seen violent dementia patients who have mellowed after using VR.

Dr. David Rhew, chief medical officer for Samsung Electronics America, believes that VR may be more than just a distraction from pain and anxiety—it may be an actual treatment. "Studies show there's a quantifiable impact, not just when the individual is receiving the VR but also after they take off the headset," says Rhew. A Cedars-Sinai Medical Center study—the largest controlled trial to date for VR pain treatment in hospitalized patients—showed VR reduced pain by 24%.

At the University of Washington, researchers did MRIs on one group who used VR before the imaging and another that didn't. "The VR group showed high levels of activity in the brain suggesting that neurochemicals were being fired," says Rhew. "There is a strong suggestion that VR is reducing pain due to some neurological or physiological impact on the brain."

Consumers have begun snapping up VR gadgets for home use. You can get Samsung's Gear VR headset for $100. But prices range from $15 for a Google Cardboard headset to nearly $600 for an Oculus Rift headset. (Oculus also offers a $99 version.)

The devices are also being used in long-term-care facilities. For the past few months, The Residence at Watertown Square, a Boston-area long-term-care facility, has been using VR. Resident engagement director Shauna Bennett has a preprogrammed tablet that guides viewers through a script she reads. Perhaps it's for an interactive tour of the Grand Canyon or watching stars at night in Alaska. "Five minutes after they try VR, they are so stimulated," she says. "It is a mood changer. They are laughing and smiling and engaged."

Rendever, which designed that Grand Canyon tour, has its product in more than 30 senior facilities; by year-end, it will be in hundreds more.

Social Robots on the Rise

For a growing number of households, Alexa, the AI-enabled, voice-controlled personal assistant on the Amazon Echo speaker, has become a family member. "She" can recite sports scores, play song requests or look up appointments. Alexa is joined by "sisters" Siri, Google Home and Cortana.

These devices are multiplying. A 2016 report from market research company Tractica predicts that 100 million consumer robots will ship between 2015 and 2020—including bots that vacuum and mow the lawn.

Coming soon is Jibo, a $749 tabletop robot due on the market this year that interacts with humans. Jibo can tell a joke when you walk in the room and even teach a grandchild simple math. A built-in camera lets it snap family photos at your say-so.

Robots like Jibo are being developed to react to your mood. Tired? Confused? Sad? Happy? The camera reads your facial expression and then converses with you. Elder care assistant robot ELLI Q, for the home market, is being tested with seniors in San Francisco.

Built on the Android platform, ELLI Q draws content from the Web. The robot is connected to a tablet and suggests activities such as "Want to play a game of bridge?" (if you say yes, it will pull up a Web-based game) or "How about a walk?" after you've sat in front of the TV for a while. The robot will remind you to take your medicine; it also reads body language.

Robotic pets are making the rounds in homes and senior facilities. At Front Porch, a nonprofit that manages senior communities and has a Center for Innovation and Wellbeing, residents in skilled nursing and memory care interact with Paro, a robotic seal, and a dog and cat from Hasbro's Joy for All Companion Pets.

Sue Norton-Clapham's mother Mabel Norton, 98, is an animal lover. Although Norton has dementia and her words are garbled, she talks to Lily, the seal, and Noodles, the cat. She has to share them with other residents of her Chula Vista, Cal., facility, so her daughter plans to buy her a robotic pet of her own. "I work and can't always be with Mom," says Norton-Clapham, "so it really makes me feel great that she is connecting to something and still able to have those emotions and be a person."

Hasbro's pets include three cats ($100 each) and a dog ($120) that looks like a Golden Retriever. When you speak, the dog looks toward you; stroke its back and you feel a "heartbeat."

Robotics can be put to use in other ways, too. For example, robotic exoskeletons are being developed for those who need help moving around after a stroke, perhaps, or who have trouble walking. A wearable mobile machine, powered by electric motors and other technology, allows a person's limbs to move. ReWalk Robotics makes ReWalk for the home and rehab facilities. The battery-powered exoskeleton has motors at the joints, so those with spinal-cord injuries can walk, turn and climb stairs.

Technology to Improve Your Health

"Connected" health technology is a godsend for people who want to grow old in their homes and retain their independence. According to an industry report by MarketResearch.com, the market for connected smart sensors is expected to reach $117 billion by 2020. Health tech lets users get help in an emergency with mobile medic alert–like personal emergency response systems; track health and habits via wearable devices that gather biometric cardiac, respiratory, sleep and activity data; and monitor chronic conditions. It also lets patients speak with doctors remotely in real time (known as telemedicine), partake in virtual rehab, anticipate falls and manage medication.

Through GPS, sensors, chips, cameras, voice activation, cellular connectivity and smartphone monitoring apps, technology provides a way to share information and offers peace of mind to family caregivers and loved ones. An adult child, for instance, can easily access the information by logging onto a smartphone, tablet or computer. Health tech company AliveCor sells a $99 smartphone-connected electrocardiogram that detects abnormal heart rhythms; called Kardia Mobile, the app on the smartphone lets the user see the results and take them to the doctor.

And don't forget mental health and well-being. Software such as Posit's Brain HQ (some brain exercises are free, but full access costs $14 a month or $96 a year) and Rosetta Stone's Fit Brains ($80 a year) can help keep the brain sharp. Other technologies let people stay socially connected and engaged. Integrated systems such as GrandCare ($999 to $1,499 plus $99 a month) and Independa (Independa-enabled LG smart TV ranges from $699 to $1,199) combine multiple functions such as videocalling, reminders and activity monitoring (including looking for unusual behavior).

Technology can also be used to manage medication. Not taking your medicine properly, or at all, can land you in the hospital—or worse. Today, there are smartphone apps and physical devices that release pills on schedule, and provide text or phone-call reminders if you forget to take your medicine. Apps, which vary in cost, include Medminder, Reminder Rosie, e-Pill and PillPack.

And there is a new world of ingestible sensors. Proteus Digital Health, a health technology company, is partnering with health care systems to prescribe medications with sensors for patients with heart failure, cardio metabolic risk and hepatitis-C.

Here's how it works: The medication is put into a capsule with a Federal Drug Administration–approved sensor the size of a grain of sand. Swallow the capsule and the sensor turns on when it reaches the stomach. It sends a signal to a small wearable sensor patch placed on your torso. The patch records the time you took your medication, the type of medicine and the dose. It then relays that information to your mobile device. If no information is relayed to the patch because you forgot to take your pill, the Proteus software sends you a reminder on your mobile device. The ingestible sensor passes through your body like food.

The Proteus sensor is currently being used in eight large U.S. health care systems, which are picking up the tab while these smart pills are being tested.

According to Dr. George Savage, co-founder of Proteus, fewer than 50% of people take their medication correctly. "Digital medicine helps doctors make better decisions," says Savage. Physicians can see if patients are failing to respond to the therapy or if it’s how they are taking the medicine that is at fault, he says.

All of these technologies are just the beginning, with many more in the works. For example, smart contact lenses are being developed to measure blood glucose from a wearer's tears to monitor diabetes. Novartis is working with Google to create a contact lens that has a tiny antenna that sends data to the user's smartphone if her glucose level is too high or too low. Another company, Medella Health, has the same goal. It'll be a few years until either is tested, approved and distributed.

Also on the horizon: Lighter and cheaper exoskeletons that pinpoint problem areas on the body. Let's say as your dad grows older, he develops a gait problem. A camera captures his movements and spots his weaknesses, then algorithms analyze the pictures so an engineer can make a brace or other assistive technology.

A few small exoskeletons are in use, such as ReWalk. But they aren't necessarily affordable. "Robotic prosthetic limbs cost anywhere from $5,000 to $50,000," says Majd Alwan, executive director for LeadingAge Center for Aging Services Technologies. But Alwan says he believes that over the next five years, prices will be halved as competition increases. With so many technological advancements under way, the future of aging looks golden.

Technology stocks can be notoriously expensive. A single share of Amazon.com (AMZN) is approaching $1,000. Ditto for Google's stock (GOOGL). Apple's (AAPL) share price would be above $1,000 had the company not split its stock 7-for-1 in 2014.

So how do you add technology stocks to your portfolio if you only have a small amount to invest? One cost-effective way is to focus on promising tech stocks priced under $20 a share. We found four names worthy of your consideration.

But before you place a buy order, don't neglect to weigh the impact of trading commissions. Let's say you want to invest $100 in each of the four stocks we recommend. Even at just $4.95 per online trade, the going rate at brokerages such as Fidelity and Schwab, your investment is already down 5%. For small trades, consider opening a free Robinhood account instead. You can use the brokerage's smartphone app to make no-commission stock trades. An upgrade to the premium service, which gives investors access to after-hours trading and margin accounts, starts at $10 a month.

Data is as of May 2, 2017, unless otherwise indicated. Click on ticker-symbol links for current share prices and more.

(Stocks are listed in alphabetical order. Analyst ratings are per Zacks and Thomson Reuters.)

• Symbol: AMD
• Share price: $10.32
• 52-week range: $3.45 - $15.55

Shares in semiconductor manufacturer Advanced Micro Devices tumbled on May 2, a day after earnings for the first quarter failed to exceed analysts' expectations. That disappointed momentum traders who had bid up AMD nearly fourfold over the past year. But for long-term investors willing to take a risk, this setback affords a chance to bet on AMD's prospects at a considerably lower price level.

"Overall, though the stock will likely be weak in overreaction to the results, we believe a host of positive catalysts are still to come during the remainder of 2017 and our buy thesis remains very much intact,” said analysts at Canaccord Genuity.

AMD is concentrating on the market for graphics processing units (GPUs) -- the brains that allow computers to render images -- because of the growth prospects. GPUs are in heavy demand by rapidly expanding industries such as data centers, gaming and virtual reality. At the same time, AMD continues to compete with Intel (INTC) in the traditional business of making central processing units for computers

The company is a leader in the gaming market, being the sole supplier of certain custom chips for both Microsoft's Xbox One and Sony's PlayStation 4. As such, AMD is set to benefit from Microsoft's launch of its new Scorpio gaming console later this year. Don't be surprised is a successful debut of the console system gives AMD stock a boost.

Analysts at Stifel, who rate shares at hold, say the company is on track for market-share gains and forecast a return to profitability on an adjusted basis this year. (AMD lost 4 cents a share on an adjusted basis in the first quarter.) More broadly, analysts who track AMD are split between high optimism and caution. Of the 18 analysts surveyed by Zacks, nine call it a strong buy, eight say it's a hold and one has it at strong sell.

• Symbol: CAMP
• Share price: $18.08
• 52-week range: $12.13 - $18.49

CalAmp is a small technology company with big aspirations. It specializes in wireless communications products that allows machines to talk to each other, as well as collect, monitor and report data to their human operators. It acquired vehicle tracking company LoJack in 2016. Since the Internet of Things -- the movement to connect everyday devices from appliances to automobiles -- is growing at a brisk pace, CalAmp looks to be in the right place at the right time.

Equity research firm William Blair expects to see more cost savings from the LoJack deal. And further investments in the business should shift LoJack's "trajectory back to growth." Turning LoJack around won't be easy, analysts say, but William Blair applauds CalAmp's progress thus far, and believes the company can wring profits out of the technology.

Shares are up 25% year-to-date and could have more upside ahead, analysts say. Of the eight analysts surveyed by Zacks who cover the stock, four say it's a strong buy and four say it's a hold. Their average price target of $20 suggests the stock can rise 11% in a year's time.

• Symbol: HPQ
• Share price: $18.90
• 52-week range: $11.31 - $19.03

HP is another technology company benefiting from a better market for PCs. The world's second-largest maker or PCs enjoyed year-over-year shipment growth of nearly 7% in the final quarter of 2016, IDC says. It was the third consecutive quarter of increased shipments, which topped 15 million units for the first time since the end of 2014. IDC further notes that HP added to its share of the U.S. market. It now accounts for 31% of domestic PC sales.

HP is in about as mature an industry as you can get, but that doesn't mean value can't be found in its stock. Indeed, the market appears to have figured this out. Shares in HP are up 27% year-to-date versus a 7% gain for the S&P 500. And yet they remain reasonably priced. The stock trades at 12 times future earnings, according to a survey by Zacks. That's cheaper than the S&P 500, which goes for 17.6 times expected earnings for the next 12 months, according to FactSet.

HP stock has appreciated so much this year that some analysts are becoming more cautious. According to Zacks, five say it's a strong buy and one rates it at buy, but five call it a hold. Shares are currently trading near the top of the 52-week price range, but keep in mind that at a yield of 2.7% HP does offer a decent dividend based on the last four quarters of payments.

• Symbol: VSH
• Share price: $16.25
• 52-week range: $11.68 - $17.60

Analysts are hardly united in their view on Vishay Intertechnology, but the stock is cheap enough to merit a closer look from bargain hunters. Like AMD, Vishay manufactures semiconductors and is at the mercy of the cyclical market for computer chips. Fortunately, the market appears to be in an upswing, Stifel notes.

In light of solid demand, especially in Asia, Vishay's profit margins should rise off depressed levels as the market for semiconductors improves. And market researcher International Data Corporation notes that global shipments of personal computers are stabilizing after five years of declines.

Despite rising on strong quarterly earnings, it's not a sure thing that this brighter outlook is fully reflected in the share price yet. Vishay’s stock trades at 15 times expected earnings for next year, according to Thomson Reuters, or less than half the forward price-earnings ratio of AMD. That's an attractive valuation for a company forecast to increase its per-share earnings by 22% this year. It's also attractive given that analysts think earnings can deliver annualized gains of 17% over the next half-decade.

Your debts are under control, your emergency fund is fully funded, and you are maxing out your retirement savings. And, lucky you, you still have $1,000 left over to invest in stocks. There are options.

You could gain instant exposure to shares of hundreds of companies by plowing the money into a low-cost fund that tracks the Standard & Poor’s 500-stock index fund such as the SPDR S&P 500 ETF (symbol SPY). Simple and cheap. Or, you could buy a single share of a high-priced stock like Amazon.com (AMZN) and you might not even have enough left over to cover your $99 Amazon Prime membership fee. But it’s risky putting all of your eggs in one basket. Another approach is to spread the money over several promising low-priced stocks.

The one wrinkle to buying shares of multiple stocks is trading commissions. Even at just $4.95 per online trade at Fidelity or Schwab, investing in 10 different stocks means your $1,000 investment is already down 5%. A workaround: Open a free Robinhood account and make no-commission trades on your smartphone using the brokerage’s app. (There's a monthly fee to upgrade to a Robinhood Gold premium account.) Here are nine good stocks under $20 to consider for your portfolio.

Data is as of May 2, 2017, unless otherwise indicated. Click on ticker-symbol links for current share prices and more.

(Stocks are listed in alphabetical order. Dividend yield is calculated based on the last four quarterly dividend payments. Analyst ratings are per Zacks and Thomson Reuters.)

• Symbol: AMD
• Share price: $10.32
• 52-week range: $3.45 - $15.55

Shares in semiconductor manufacturer Advanced Micro Devices tumbled on May 2, a day after earnings for the first quarter failed to exceed analysts' expectations. That disappointed momentum traders who had bid up AMD nearly fourfold over the past year. But for long-term investors willing to take a risk, this setback affords a chance to bet on AMD's prospects at a considerably lower price level.

"Overall, though the stock will likely be weak in overreaction to the results, we believe a host of positive catalysts are still to come during the remainder of 2017 and our buy thesis remains very much intact,” said analysts at Canaccord Genuity.

AMD is concentrating on the market for graphics processing units (GPUs) -- the brains that allow computers to render images -- because of the growth prospects. GPUs are in heavy demand by rapidly expanding industries such as data centers, gaming and virtual reality. At the same time, AMD continues to compete with Intel (INTC) in the traditional business of making central processing units for computers.

The company is a leader in the gaming market, being the sole supplier of certain custom chips for both Microsoft's Xbox One and Sony's PlayStation 4. As such, AMD is set to benefit from Microsoft's launch of its new Scorpio gaming console later this year. Don't be surprised is a successful debut of the console system gives AMD stock a boost.

Analysts at Stifel, who rate shares at hold, say the company is on track for market-share gains and forecast a return to profitability on an adjusted basis this year. (AMD lost 4 cents a share on an adjusted basis in the first quarter.) More broadly, analysts who track AMD are split between high optimism and caution. Of the 18 analysts surveyed by Zacks, nine call it a strong buy, eight say it's a hold and one has it at strong sell.

• Symbol: MT
• Share price: $7.90
• 52-week range: $4.18 - $9.37

The world's largest steelmaker is expected to post big jumps in revenue and earnings this year, thanks in part to growing demand in Europe and emerging markets. Industry group the World Steel Association expects European demand for steel to inch up 0.5% this year and 1.4% in 2018, driven by better-than-expected economic growth. Luxembourg-based ArcelorMittal derives nearly half its revenue from Europe.

The improving economic situations in Brazil, Russia and elsewhere are also adding to demand. Perhaps most importantly, China is slowing production in response to the global steel glut. The threat of tariffs in the U.S. also helps the outlook for prices.

Against that better fundamental backdrop, ArcelorMittal shares look attractively priced relative to growth prospects. Earnings per share are forecast to increase 30% this year on revenue growth of 17%, according to a survey by Thomson Reuters. However, the stock trades at just 9.5 times forward earnings, or about half the forward price-earnings ratio of the S&P 500.

Further, analysts at Credit Suisse say the global steel glut is actually a myth, and contend that the pressure on raw materials prices helps ArcelorMittal more than other industry players.

The analysts rate the stock at outperform (buy, essentially). Their price target of $11.71 implies a 50% gain in the next 12 months or so.

• Symbol: CAMP
• Share price: $18.08
• 52-week range: $12.13 - $18.49

CalAmp is a small technology company with big aspirations. It specializes in wireless communications products that allows machines to talk to each other, as well as collect, monitor and report data to their human operators. It acquired vehicle tracking company LoJack in 2016. Since the Internet of Things -- the movement to connect everyday devices from appliances to automobiles -- is growing at a brisk pace, CalAmp looks to be in the right place at the right time.

Equity research firm William Blair expects to see more cost savings from the LoJack deal. And further investments in the business should shift LoJack's "trajectory back to growth." Turning LoJack around won't be easy, analysts say, but William Blair applauds CalAmp's progress thus far, and believes the company can wring profits out of the technology.

Shares are up 25% year-to-date and could have more upside ahead, analysts say. Of the eight analysts surveyed by Zacks who cover the stock, four say it's a strong buy and four say it's a hold. Their average price target of $20 suggests the stock can rise 11% in a year's time.

• Symbol: DAR
• Share price: $14.89
• 52-week range: $11.51 - $15.93

Shares in Darling Ingredients, a rendering and biodiesel fuel company, are enjoying a great start to 2017. The stock is up 17% so far this year versus a 7% gain for the S&P 500.

The company is riding momentum from its strong finish to 2016, and ongoing investments in its biofuels business should continue to carry it this year and beyond. Investors are optimistic about Darling's joint venture with Valero Energy (VLO), to operate a processing plant in Louisiana to turn animal fat and used cooking oil into diesel fuel. A plant expansion is slated to be completed by the second quarter of 2018.

Investors also like the fact that the company continues to pare its debt. As of Dec. 31, 2016, Darling had long-term debt of $1.73 billion, down from $1.89 billion in the same period a year earlier.

Analysts expect more strong gains for the stock in the months ahead. All three analysts covering Darling rate shares a strong buy, according to Zacks. Their average price target of $17.17 implies a gain of 15% for Darling stock in the next year. With expected earnings-per-share growth of 9% this year and 21% next year, per Zacks, the stock looks reasonably priced as it trades at 21 times expected earnings.

• Symbol: HPQ
• Share price: $18.90
• 52-week range: $11.31 - $19.03

HP is another technology company benefitting from a better market for PCs. The world's second-largest maker or PCs enjoyed year-over-year shipment growth of nearly 7% in the final quarter of 2016, IDC says. It was the third consecutive quarter of increased shipments, which topped 15 million units for the first time since the end of 2014. IDC further notes that HP added to its share of the U.S. market. It now accounts for 31% of domestic PC sales.

HP is in about as mature an industry as you can get, but that doesn't mean value can't be found in its stock. Indeed, the market appears to have figured this out. Shares in HP are up 27% year-to-date versus a 7% gain for the S&P 500. And yet they remain reasonably priced. The stock trades at 12 times future earnings, according to a survey by Zacks. That's cheaper than the S&P 500, which goes for 17.6 times expected earnings for the next 12 months, according to FactSet.

HP stock has appreciated so much this year that some analysts are becoming more cautious. According to Zacks, five say it's a strong buy and one rates it at buy, but five call it a hold. Shares are currently trading near the top of the 52-week price range, but keep in mind that at a yield of 2.7% HP does offer a decent dividend based on the last four quarters of payments.

• Symbol: HBAN
• Share price: $12.95
• 52-week range: $8.05 - $14.74

Huntington Bancshares is a regional bank based in Columbus, Ohio. A recent merger with FirstMerit Bank expanded operations to Michigan, Wisconsin and Indianapolis. That expansion across the Rust Belt could prove to be beneficial if the White House gets its way on trade protectionism, corporate tax cuts and support for the coal industry.

Cost saving from the acquisition could also help Huntington get a grip on its expenses. The bank missed analysts' average earnings forecast for the first quarter because of higher costs. Investors should be reasonably confident that it will. The company is projected to produce per-share profit growth of 8.5% this year and 15% next year, according to Zacks.

Of the 15 analysts covering the stock, seven say it's a strong buy, one rates it at buy, and seven call it a hold. A recent upgrade to Buy from Hold at Jefferies could be the first of many if Huntington can bounce back with a better second-quarter showing.

The earnings report won't come out until this summer, however. In the meantime, investors will have to make due with a dividend yield of 2.3%. That's more than competitive with the regional bank average, which stood at just 1.63% at the beginning of 2017.

• Symbol: KEY
• Share price: $18.48
• 52-week range: $10.21 - $19.53

KeyCorp, the Cleveland-based regional bank, is starting 2017 on the right foot by delivering better-than-expected revenue and earnings for the first quarter. The happy surprise was due to cost savings from its 2016 acquisition of First Niagara Bank and lower losses on credit.

Analysts at Wedbush said KeyCorp is "firing on all cylinders" and has a lot of momentum going forward. "The first quarter tends to be seasonally the weakest and momentum usually builds throughout the year," Wedbush notes. "Additionally, the First Niagara acquisition is performing better than expected."

Wedbush rates shares at Outperform with a $22 price target. That gives the stock implied upside of 18% over the next year or so. The wider research community is split, but it also sees solid gains ahead. Six analysts say KeyCorp is a strong buy, one rates it at buy and nine call it a hold, according to Zacks. However, their average target price of $20 still calls for price appreciation of 9% over the next 12 months.

In another positive for the bank, rising interest rates will ease pressure on its profit margins, analysts note. The improved outlook for banks and the fruits of the First Niagara acquisition look to make shares a winner this year.

• Symbol: UCFC
• Share price: $8.59
• 52-week range: $5.60 - $9.50

United Community Financial Corp. is the holding company for the Home Savings and Loan Company of Youngstown, Ohio. It's a small bank, but it's getting big praise from the analyst community. Boenning & Scattergood says its transformation into a "formidable" commercial banking operation is "nothing short of impressive." B&S rates the stock at outperform, and it's not alone. The three analysts tracked by Thomson Reuters all say it's a buy.

The bank has been active in the mergers and acquisitions markets, which could spur a big jump in operating profits, B&S says. Companies often need to bolster their funding when interest rates are moving up.

Shares in United Community appear to be taking a breather after a strong 2016. The stock gained more than 50% last year and is currently down about 3% year-to-date. The pause shouldn't last long, if analysts are correct. Indeed, they're looking for the stock to rise 16% in the next 12 months.

Be forewarned that this is a very small stock. The company’s market capitalization – share price times number of shares outstanding – is just $424 million. The aforementioned regional bank KeyCorp has a market capitalization of more than $20 billion. Small stocks tend to be more volatile than large ones.

• Symbol: VSH
• Share price: $16.25
• 52-week range: $11.68 - $17.60

Analysts are hardly united in their view on Vishay Intertechnology, but the stock is cheap enough to merit a closer look from bargain hunters. Like AMD, Vishay manufactures semiconductors and is at the mercy of the cyclical market for computer chips. Fortunately, the market appears to be in an upswing, Stifel notes.

In light of solid demand, especially in Asia, Vishay's profit margins should rise off depressed levels as the market for semiconductors improves. And market researcher International Data Corporation notes that global shipments of personal computers are stabilizing after five years of declines.

Despite rising on strong quarterly earnings, it's not a sure thing that this brighter outlook is fully reflected in the share price yet. Vishay’s stock trades at 15 times expected earnings for next year, according to Thomson Reuters, or less than half the forward price-earnings ratio of AMD. That's an attractive valuation for a company forecast to increase its per-share earnings by 22% this year. It's also attractive given that analysts think earnings can deliver annualized gains of 17% over the next half-decade.

Can I use money from my employer's dependent-care flexible spending account to pay for adult day care for my elderly mother, or is the account just for child care?

The dependent-care FSA isn't just for children. You can also use the money tax-free to cover care for other dependents while you work. To qualify, the person must live with you. Plus, either he or she must be considered your dependent for tax purposes or you must provide more than 50% of his or her support during the year. He or she must also be physically or mentally incapable of self-care, which the IRS defines as someone who cannot dress, clean or feed themselves because of physical or mental impairments, as well as people who must have constant attention to prevent them from injuring themselves.

To qualify, the care must be provided so you and your spouse can work (one of you can be a full-time student), unless the eligible dependent is your spouse.

You and your spouse can contribute a total of up to $5,000 annually to a dependent-care FSA. The money escapes federal income taxes as well as Social Security and Medicare taxes; it may also avoid state income taxes.

For more information about the dependent-care FSA rules, including a detailed description of eligible dependents, see the Dependent Care FSA page from WageWorks, which administers employer FSA programs.

If you don't have a dependent-care FSA at work, your expenses may be eligible for the dependent-care tax credit. Up to $3,000 for one qualifying individual or $6,000 for two or more (which can include children under 13 as well as eligible adult dependents) qualifies for the write-off. As with the dependent-care FSA, both you and your spouse must have earned income from a job, unless one is a full-time student (or is the eligible person who is receiving care). The credit is worth 20% to 35% of caregiving expenses, depending on your income. For example, it’s worth 20% of the eligible expenses if your adjusted gross income is more than $43,000. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

Even if you've used the maximum $5,000 from a dependent-care FSA at work, up to $1,000 in additional care expenses could still qualify for the dependent-care credit if you pay for care for two or more eligible people (such as a child under 13 and an elderly parent). See Claiming the Dependent-Care Tax Credit.

Unfortunately, no single formula for selecting investments is guaranteed to beat the market averages. Life isn’t that easy. Still, over the past several decades, a few superb stock pickers have emerged. Nearly all of them have left paper trails, in the form of books and portfolios, and those trails are worth following.

Consider Benjamin Graham, coauthor of the classic 1934 text Security Analysis and author of The Intelligent Investor, a more readable book that was first published in 1949 and has been updated many times. Graham was a highly successful investor and the mentor of Warren Buffett, among others. Graham rejected stocks with high price-earnings ratios and demanded a “margin of safety” before he invested. Graham, who died in 1976, tried to find companies priced far below their intrinsic, or true, value (as he defined it).

Not even Buffett follows Graham’s extreme value strategy, but you can. The trick is to find companies with low P/Es and low ratios of price to book value (P/B), or net worth, on the balance sheet. Book value is not quite the same thing as Graham’s concept of intrinsic value, but it’s close enough.

A good example of a Graham stock is Wesco Aircraft Holdings (symbol WAIR), a small company that provides supply-chain management services to the aerospace industry, making sure planes have the parts they need (stocks and funds I recommend are in boldface). Wesco’s P/E, based on analysts’ average earnings estimates for the year that ends in September 2016, is just 11, compared with 15 for Standard & Poor’s 500-stock index. And Wesco’s P/B is a mere 1.1, only 10% greater than its balance-sheet value. The S&P 500’s P/B is 2.7. (Go to http://finance.yahoo.com to get P/Es and P/Bs for individual stocks; look under “Key Statistics.”)

Wesco is also a component of the Graham portfolio devised by John Reese, a money manager who founded a Web site called Validea.com and runs a newsletter called The Guru Investor. I first wrote about Reese 12 years ago. At the time, he had just launched a software program, Validea, that attempted to imitate the investing styles of a dozen investing gurus, including Graham.

These are unofficial portfolios, based on the writings and actions of managers who played no part in their composition (and some, like Graham, who are not even alive). But according to Reese’s data, a portfolio of stocks Graham might have favored, constructed using Validea’s software, has returned an impressive 10.4% annualized from its inception on July 15, 2003, through September 30, compared with just 5.5% annualized for the S&P 500.

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Focus on sales.

Among Validea’s top-performing guru portfolios is one based on the style of Ken Fisher, a California money manager and author of 100 Minds That Made the Market (1993) and several other books. Fisher is fond of stocks with a low ratio of price to sales (P/S), a more consistent valuation indicator, he believes, than P/E. Validea’s Fisher portfolio has returned an annualized 8.5% since 2003, or 3 points more than the return of the S&P 500. Recent additions to the portfolio include Mueller Industries (MLI), a Memphis maker of heating and air-conditioning equipment. Mueller has a P/S, based on the previous 12 months’ revenues, of just 0.75; a ratio of less than 1.0 can indicate a potential bargain.

Another guru, James O’Shaughnessy, is the author of one of my favorite investing books, What Works on Wall Street. O’Shaughnessy looked at decades of data and concluded that the best strategy combines elements of value and growth: a low P/S plus consistent earnings growth over five years and strong price performance over the previous 12 months. The notion of finding companies with strong business performance whose stocks have performed well recently but are still cheap makes a good deal of sense. The record of Validea’s O’Shaughnessy portfolio is stellar: an annualized return of 7.4% since its inception in 2003, or an average of 1.9 percentage points more than the S&P over the same period. Among recent additions to the portfolio is a favorite of mine, Cracker Barrel Old Country Store (CBRL), the restaurant and gift-shop chain. Its P/S is 1.2.

O’Shaughnessy himself manages several funds that put his strategy into practice, most notably O’Shaughnessy All Cap Core A (OFAAX), with an annualized return of 12.2% over the past five years, an average of 1.2 percentage points per year behind the S&P 500. I don’t recommend All Cap Core because it levies a 5.25% sales charge, but I like its strategy. Its top holdings include Home Depot (HD) and insurer Travelers Cos. (TRV).

Validea Capital Markets, which manages money for institutions and wealthy individuals, late last year launched an exchange-traded fund called Validea Market Legends ETF (VALX). The fund holds stocks from each of 10 Validea portfolios. Its top holdings as of September 30 were Lending Tree (TREE), the online mortgage marketplace, tied with Bofi Holding (BOFI), a San Diego–based bank, followed by Abiomed (ABMD), a maker of medical devices. In the first nine months of 2015, the ETF surrendered 9.2%, trailing the S&P 500 by 3.9 percentage points.

I think the Validea ETF will turn out to be a solid long-term performer, but my guess is that because of the wide variety of styles represented in the portfolio, the fund will produce returns close to those of the S&P 500. More adventurous investors should settle on a single strategy.

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The easiest one to mimic is Buffett’s. All you have to do is buy shares of Berkshire Hathaway (BRK-B), his holding company, which owns some private companies outright (for example, insurer Geico and BNSF Railway) and others in part. You can find Berkshire’s publicly traded holdings—45 of them—at www.cnbc.com/berkshire-hathaway-portfolio. Berkshire owns multibillion-dollar chunks of such household names as American Express (AXP), Procter & Gamble (PG) and Wells Fargo (WFC). It also has stakes in less-well-known stocks, such as Chicago Bridge & Iron (CBI), a Netherlands-based construction and engineering firm.

Buffett is more willing than Graham was to forsake a margin of safety to own companies that generate powerful cash flow. Validea’s Web site calls Buffett’s strategy “Patient Investor.” He buys nothing with the intention of selling it. He doesn’t care about short-term price movements. And he wants a strong brand name that is capable of producing long-term growth. Buffett started Berkshire in 1964, after buying a failing textile company. Since then, an investment of $10,000 has grown to more than $100 million.

Of course, there are no guarantees that cribbing from the gurus will produce such lovely returns. What these experts teach us for certain is that stocks are excellent investments over the long term, meaning several decades. Buffett wrote in his most recent annual report that stock prices will always be more volatile than cash in the short term. Over the longer term, he added, bonds and cash are “far riskier investments than widely diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions.” Amen.

James K. Glassman, a visiting fellow at the American Enterprise Institute, is author, most recently, of Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns none of the stocks mentioned.

I was impressed when my twentysomething son, Peter, told me recently that he was reading Benjamin Graham’s classic, The Intelligent Investor. Peter also subscribes (on his own) to Kiplinger’s Personal Finance magazine, of which I’m the editor, and he occasionally asks me for advice. I’m fortunate to have the expertise of our staff at my disposal, plus some thoughts of my own for beginning investors. I distilled them into an e-mail that Peter says he found “really helpful,” so I thought I’d share it:

Dear Peter,

1) Put safety first. Before you invest in anything, you should have money in the bank that you can easily get to in an emergency (say, your car breaks down) or that you can use for a new car, a trip abroad or even a house. Kiplinger generally recommends that you have at least enough in a cash reserve to cover your expenses for six to 12 months. Savings accounts are paying almost nothing right now, but you can eke out 1% or so in top-yielding accounts.

2) Build a solid base. For longer-term money that you don’t need right away—such as money in your 401(k) plan or IRA—you can afford to take risks in the stock market. The best thing to do when you’re starting out is to stick with mutual funds, which let you spread your risk—or diversify—by investing in a lot of different stocks.

The best funds to start out with, in my opinion, are index funds, which try to match a particular benchmark, such as the broad-based Standard & Poor’s 500-stock index or a total stock market index. Another benefit of index funds: They have very low fees, which means more of your money is working for you and not for the company that manages the fund.

Note: Peter, you asked about exchange-traded funds, or ETFs. An ETF is a kind of index fund. There are hundreds of ETFs that invest in all kind of indexes, some well known (such as the S&P 500) and some so obscure that you’d never need them. They are popular because their fees are even lower than those of index mutual funds, and you can trade them throughout the day like stocks. We’ve compiled our favorite ETFs into the Kiplinger ETF 20.

3) Aim for a target. Another broad-based way to invest is a target-date fund, which you probably have access to through your 401(k) plan. That’s a one-stop fund with a mix of stocks, bonds and other assets that are tied to the date of your retirement and gradually become more conservative as that date approaches. If you go this route, a target-date fund is probably all you need.

4) Add a little spice. With actively managed funds, managers use their own judgment to try to get returns that beat the stock market. That’s tough to do, and some managers are better at it than others. The trick is to pick the best ones that have staying power. At Kiplinger, we try to do this for you by choosing the Kiplinger 25, our 25 favorite actively managed funds. If you have index funds as a base, you can use actively managed funds to complement your portfolio.

5) Take a flier on stocks? In some ways, stocks are the most fun to invest in, but they also require a lot of research to choose the right ones. And, of course, if you invest in any single stock, you’re taking on more risk than if you invest in a mutual fund that holds shares in many companies. For someone in your position, I’d recommend starting with a solid fund foundation. Then, if you have extra money and want to take a flier on a stock (or stocks), you can do that.

There’s a lot more, of course. But I think this gives you a good overview of the basics, and I hope it helps.

Love,

Mom

In the market for a new computer? If so you don’t need to wait until back-to-school season or Black Friday, traditionally two of the best times of the year to find PCs on sale, to get a great deal. Savvy technology shoppers know to look for similar bargains in April, when new laptop models typically are released. To make room on store shelves, retailers in early spring start marking down the previous year’s models, says TechBargains.com deal specialist Jeff Lee. And unlike Black Friday sales that tend to offer deals on lower-end models, spring sales feature higher-end laptops, says FatWallet.com shopping expert Brent Shelton.

We asked deal experts to sort through the numerous sales happening now to identify some of the best laptop bargains. Here are their picks for the best values under $1,000 (available as of April 8). To score some of these deals, you need to act quickly.

Laptops under $500

Dell Inspiron 15 3000 Intel Core i3-5005U ($379.99, Dell Home). Marked down from $500, this laptop is “flat out cheap” for a current generation Intel Core i3 processor, Lee says. It has 4 gigabytes of memory and comes with Windows 8.1. It’s ideal if you’re looking for a laptop for basic word processing and Web surfing, Lee says.

Lenovo G50-80 15.6" Intel Core i5 ($399, MicrosoftStore.com). The price has dropped $200 on this notebook computer with 6GB of memory because it has a previous generation Intel processor (choose “PC only” to get the $399 price). And you can get an additional 5% off by texting MSTORE to 29502 on your phone, bringing the price down to $379. Ben’s Bargains Managing Editor Kristin Cook says this Lenovo is perfect for anyone who wants a laptop of this screen size to watch shows and videos on the Web.

Acer Notebook E5-571-7776 (NX.MLTAA.018) 15.6" Intel Core i7 ($449.99 with coupon code, eBay). This laptop sold by electronics retailer Newegg.com on eBay has been marked down to $499.99 from $699.99, but you can get another $50 off with coupon code CLC10OFF (plus 1% cash back if you buy it through FatWallet.com). The price has dropped on this model because it has a fourth generation Intel Core i7 processor – not the latest fifth generation, Shelton says. However, with 8GB of memory it’s still powerful enough to tackle nearly all applications for years to come, he says.

Laptops between $500 and $1,000

Dell Inspiron 15 7000 Touch Intel Core i5 ($549.99 with coupon code, Dell Home). Lee says that this is an incredible price for a quality machine with 6GB of memory. This premium laptop with aluminum construction has a backlit keyboard and a touchscreen display with durable Corning Gorilla Glass to survive scratches. The Inspiron 15 7000 with a fourth generation i5 processor is marked down to $599 from $925, and you can get an extra $50 off with coupon code 4S79F2CJG$974M (expires May 1).

Lenovo IdeaPad U430 14" Touch Ultrabook Intel Core i5 ($549 with coupon code, Lenovo). With coupon code SPCLU430T4298, you can save $500 on this laptop, which has a list price of $1,049.99 (plus, you can get 6% cash back through FatWallet.com). Shelton says this super-portable touchscreen laptop with 8GB of memory offers great value for the price. Although its i5 processor is not as fast as an i7, he says it uses far less power.

Acer Aspire R 13 Intel Core i5 ($699, MicrosoftStore.com). This high-definition, 13.3-inch touchscreen laptop with 8GB of memory and surround sound is geared toward heavy media users and is ultra-portable, Cook says. At $699 (select “PC only”), it’s a savings of $200.

Lenovo Yoga 3 Intel Core M 5Y10c Ultrabook ($699 with coupon code, Lenovo). If you want a tablet but need the power and space of a laptop, the Yoga 3 is a well-reviewed model that offers the best of both worlds, Lee says. Clocking in at only 2.6 pounds and 0.6-inch thick, this Lenovo with an 11.6-inch screen has 4GB of memory. With coupon code SPCLYGA311UUS (expires April 10), the price drops $350.99 from $,1049.99.

Lenovo Y50 15.6" Intel Core i7-4720HQ ($849 with coupon code, Lenovo). This high-end laptop features a dedicated video card for desktop-like performance out of a mobile computer, Shelton says. Typically machines such as this cost more than $1,000, but fierce competition in high-end laptops combined with the release of new processor generations has led to a price drop, he says. With coupon code USPY5560403, the price falls by $500.99 from $1,349.99 (plus, you can get 6% cash back if you buy through FatWallet.com).

Apple MacBook Pro 13.3" MD101LL/A Intel Core i5 ($849.99, eBay). The price has dropped from $1,199 on this MacBook (sale ends April 13). Cook says this model, with 4GB of memory, is made for Apple users who need a high-powered machine for video and music editing.

Lenovo Y70 Intel Core i7 17.3" Touchscreen ($999.99, Amazon). With the biggest screen size of the 10 laptops we recommend, Cook says that this Lenovo is ideal for anyone who plays a lot of games or needs lots for memory for multi-tasking. The price has been cut by $300 on this model with 8GB of memory.