Investors were hesitant on how to react after Morgan Stanley (MS) beat top- and bottom-line expectations for its second quarter. Shares of the banking giant were initially down more than 3% in pre-market trading but have since swung into positive territory.

In the quarter ended June 30, Morgan Stanley said its revenue was up 11.6% year-over-year to $15 billion, due in part to a 51% spike in investment banking revenue to $1.6 billion. The company also said its earnings per share (EPS) surged 46.8% from the year-ago period to $1.82.

"The biggest bright spot for MS was a clear rebound in the investment banking segment," says Brian Mulberry, client portfolio manager at Zacks Investment Management. "The return of Wall Street activity helped [the bank] post net income up 41% from a year ago showing an improving capital markets environment." 

Mulberry says this allowed Morgan Stanley to give positive forward guidance, which has been a definable trend. "Markets are more concerned about the next couple of quarters, even more than recent results," he adds.

As for those recent results, they crushed analysts' expectations. Wall Street was anticipating Q2 revenue of $14.3 billion and earnings of $1.65 per share, according to CNBC.

The financial firm also reiterated that it will increase its dividend by 8.8% in the third quarter and said that it repurchased $800 million of common stock during the quarter as part of its recently announced $20 billion share repurchase program. Dividends and stock buybacks can boost value for shareholders.

"We continue to execute on our strategy and remain well positioned to deliver growth and long-term value for our shareholders," Morgan Stanley CEO Ted Pick said in a statement.

Is Morgan Stanley stock a buy, sell or hold?

Although the financial stock is up 15% for the year to date on a total return basis (price change plus dividends), Wall Street is sitting on the sidelines. 

Of the 23 analysts tracked by S&P Global Market Intelligence, four rate it a Strong Buy, three call it a Buy and 16 have it at Hold. This works out to a consensus recommendation of a Hold. Meanwhile, the average analyst target price for MS stock is $100.54, representing a discount to current levels.

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Shares in eBay (EBAY) are moving higher today while Etsy (ETSY) stock is moving lower after investment bank Morgan Stanley (MS) issued calls on both e-commerce stocks early this morning.

"We believe eBay is best-positioned to capture upside from generative AI in 2024," Morgan Stanley analyst Nathan Feather said, according to Bloomberg. 

Feather upgraded eBay’s stock to Buy from Sell and boosted his price target to $62 to $35, making him the most bullish analyst following the stock, according to Bloomberg. The new price target gives the stock implied upside of more than 22% from current levels.

Feather also recommended a pair trade with Etsy, downgrading the stock to Sell from Hold and lowering his price target to $55 from $64, according to Barron's. The new price target on Etsy represents downside of about 18% from current levels.

"We expect the growth profiles to converge and model both grow earnings before interest, tax, depreciation, and amortization (EBITDA) at a 5% '23-'26 compound annual growth rate," Feather said, adding that eBay trades at a 35% discount to Etsy on 2025 EBITDA, according to Barron's.

Argus agrees with the eBay call

Agreeing with the bullish stance on eBay, Argus Research has a Buy rating on the stock and a $58 price target.

"Following the 2015 PayPal spinoff, and the sale of StubHub, the Classifieds business, and other assets, eBay has become a more focused e-commerce retailer," Argus said in a March 8 report. "CEO Jamie Iannone is working to strengthen the eBay Marketplace platform through a blizzard of new features and enhancements centered on improving the user/seller experience, including new seller tools underpinned by generative AI models."

Analysts' average target price on eBay is $50.98, according to S&P Global Market Intelligence, giving the stock essentially no implied upside in the next 12 months or so. The Street's consensus recommendation is Hold.

Truist disagrees with the Etsy call

Truist analyst Youssef Squali strongly disagrees with Morgan Stanley’s stance on Etsy, reiterating his Buy rating and $85 price target in a March 18 report.

"We believe ETSY is an attractive business model with a differentiated offering and a number of product and marketing levers to drive growth and profitability over the next several years," Squali said. "The opportunity ahead, coupled with management's execution track record, fuel our confidence that Etsy can execute against these initiatives and create value for shareholders over the next 12 months."

Analysts' average target price on Etsy is $81.73. Although that gives ETSY implied upside of more than 20% over the next year or so, the Street's consensus recommendation stands at Hold.

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Having and adhering to a budget is a smart financial habit to develop. Doing so keeps you on course to meet your financial goals.

This is where a budgeting app is essential. These apps can help you declutter your finances by organizing expenses into categories. They can also help you stay on course to meet your short and long-term financial goals.

Here’s a look at other budget apps you can download through the Apple App Store or Google Play. All of the apps listed here assure users that data obtained from their bank accounts is password-protected and will not be shared with third-party vendors.

Best overall budgeting app: You Need a Budget

You Need a Budget is a strong choice if you want a detailed and hands-on budgeting app to monitor expenses. By helping you prioritize where you spend your money, YNAB offers a holistic approach to monitoring your spending habits. YNAB provides four rules for users to follow.

The first is the zero-based budgeting method, in which you assign every dollar in your bank account to a specific expense. If an emergency arises, the app accommodates budget changes for surprise expenses.

The second rule is to plan for large, infrequent expenses (say, for home repairs or annual insurance premiums) by setting aside money for them each month. Meanwhile, the third rule encourages you to make adjustments if you run out of money in one of your budgeting categories by moving money to it from a different category.

YNAB’s fourth rule is to "age your money" — in other words, once you get used to budgeting and spending less, you can pay for your current monthly bills with money you saved from the previous month rather than from your most recent paycheck. In addition to providing budgeting advice, YNAB also offers live money-management workshops online.

Price: Sign up for a free trial for 34 days, then $14.99 a month or $109 for an annual membership.

Best for beginners: Simplifi and Tiller

If you're new to budgeting apps, you can ease in with one of these choices.

Quicken's Simplifi features easy-to-navigate menus and charts, and creates a personalized spending plan you can use to monitor your income and expenses. Your spending plan adjusts as your expenses change, and the app’s features let you easily tweak your budget.

In addition to tracking your spending, Simplifi helps you plan for the future, projecting your cash flow based on upcoming bills so you can change your spending accordingly. Quicken also recently released LifeHub, which organizes your most important financial documents into a secure, digital hub. This protects them in the event your home has a fire, flood or other disaster. The service is only $1.99 per month.

Price: Sign up for Quicken Simplifi at $2.99 monthly, billed annually.

Tiller may be the best app for you if you like using spreadsheets to balance your budget. After you link your financial accounts to Tiller, you can use one of its templates to create a customized budget spreadsheet in Google Sheets or Microsoft Excel, and the sheets automatically draw in updated information about your spending and balances from the linked accounts. You can also have Tiller send you daily email updates about your account balances.

Price: Try it free for 30 days, then $79 annually.

Best app for investors: Empower

I recommend Empowerbecause it's easy to use and houses many of your personal finance accounts into one hub. I started using it last year and never looked back because it's free, easy to use, and simplifies financial management.

For example, if you have investment accounts with Fidelity Investments and Morgan Stanley, you can review both of your portfolios, including a breakdown of holdings and their allocations, on a dashboard on the Empower app.

You can also link other types of accounts, such as 529 college savings plans, health savings accounts and your home mortgage.

Price: Get the Empower app free on Google Play or the Apple App Store.

Best for debt management: PocketGuard

If you subscribe to a PocketGuard Plus membership, you can set up a debt-payoff plan integrated into your budget. You enter details such as the minimum payment and annual percentage rate of your debts, and PocketGuard allocates adequate money to put toward the debt and compiles a payment schedule.

Members of the Plus plan can also create unlimited budgets and savings goals.

The free Basic plan lets you create a budget and track your bills, spending and income.

Price: Try the premium plan free for 7 days. The premium plan is $12.99 monthly, $74.99 annually.

Best app for couples: Honeydue

After you download the Honeydue app, you can invite your partner via email or text message to download it, too. Once you both have the app, you can monitor your budgets and track your spending habits for joint accounts. (Your partner won’t be able to see information about your individual accounts and vice versa.)

You can also coordinate bill payments and discuss how to manage your budget in the app’s chat section.

Price: Download the free app on the Apple App Store or on Google Play.

Best for you and your financial adviser: Monarch

While some budgeting apps help you stay on track with your partner, Monarch lets you team up with your financial adviser. As with other budgeting apps, once you connect your accounts to Monarch, you can track your spending.

However, Monarch also allows you to securely share your account information with your adviser so you can collaborate on your savings and investment goals. You can also share the app with your partner or someone else from your household, who will have their own login.

Once you create an account with Monarch, you can add your financial adviser for free. Your adviser can securely log in to their separate account and won’t be able to see your personal identifying information, such as your bank account number.

Price: $14.99 monthly or $99.99 annually.

For a limited time, get 50% off your first year with code: MONARCHVIP

Using budgeting apps as a baseline, but also consider other options

Gerber notes that while budgeting apps can be helpful, you should adopt a hands-on approach to managing your budget. Set a money date once a month where you review your finances. And if you're in a relationship, it gives both parties a chance to discuss financial goals and concerns.

And even if you use an app, he adds, you should consider meeting with a financial adviser to discuss the best way to meet your financial goals.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make.

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March is Women’s History Month, which also makes it a great time to think about how we can build a better future for women. And financial health needs to be part of that conversation.

The Brookings Institution shows that women on average still earn less over their lifetimes compared to men, which makes it harder to save for the future — especially since women also tend to live longer, be more financially risk averse and less financially literate and are also more likely to have caregiving responsibilities (and therefore, more time away from work).

All these factors together can deeply affect our ability as women to build wealth. So how can we overcome these barriers to build a more secure and healthy financial life? Here are four ways you can take the lead when it comes to creating a stronger financial future for yourself.

When you think about your money, think about how to use it as a vehicle for realizing your personal vision of success. Defining your goals and needs can provide a framework for you to base all your financial decisions around as you navigate the inevitable ups and downs of life. Think through where you are today, where you’d like your finances to be ideally and how you can bridge that gap.

Having a plan in place can help you find ways to take advantage of your money’s potential to grow over the long term, forge greater resilience in your life and the lives of your loved ones and even pay it forward to the causes and people you care about most. Make it a habit to review your financial situation and make adaptations according to your needs, new life events and evolving market conditions on a regular basis — at least once a year, and even more often for short-term goals.

A sound financial strategy includes saving and investing. Aim to keep more of what you earn and put your money to work toward your goals over as much time as possible. There can be a lot of complexity in the financial markets as well as in life’s daily demands on our wallets, so the best decisions for you will depend on your goals as well as your comfort level with risk. But whatever you do, start today.

If you’re struggling to find your footing, reach for the low-hanging fruit by participating in any workplace benefits you have available. You may not think of workplace benefits as a way to invest in the markets, but they can be a great starting point.

In addition to salary, your company likely offers benefits to support your financial life, such as a retirement or equity compensation plan. You may even be able to automate contributions through payroll deductions or online banking, making it easier to invest on your terms and at your own pace. Find out the details, talk to your HR representative and research your choices.

If you receive equity compensation or have the opportunity to participate in an employee stock purchase plan (ESPP) at your job, that’s another opportunity to potentially build wealth as you continue to build your career. Equity compensation can help you develop an investment portfolio designed to grow over the long term, while an ESPP can be a relatively more affordable way to engage in the market, given that many employers offer share price discounts to employees through their stock plan programs.

Consider how company stock could potentially fit in with your wider goals and make sure you understand the rules and requirements — there are also professionals who can help you with any investment decisions you might be making.

Women provide 66% of the caregiving work in the U.S., and we are more likely to put our careers on hold or reduce our working hours to care for children and/or aging parents. The last couple of years have only magnified this issue, especially for women of color and single mothers.

Caregiving can play a significant role in our financial journey, so if caregiving is or may become a part of your life, it’s important to plan to offset the potential financial impact. Hold honest conversations with your loved ones and start planning for your own future needs.

If you’re already providing care for a loved one, don’t be afraid to ask for help. Also, look for ways to stay in touch with your professional connections. You never know — maintaining your network may help you find a lucrative side hustle or a way back into the workforce down the road.

Taking charge of your financial life doesn’t mean you have to do it all on your own. Work on building up a “dream team” of personal and professional contacts who can be a part of your support system as you pursue your financial goals.

For example, professionals like accountants, lawyers, and financial advisers can help you assess your choices, prepare financial next steps and put your money to work through prudent investments.

You may even be able to access support professionals like these through your workplace benefits — like a retirement plan adviser, an equity compensation professional or a financial coach.

Look to your wider community as well, whether through professional organizations, hobbies or local groups for like-minded people and financial education opportunities that can help empower you each step of the way.

Even though women face distinct financial challenges, you can find power and control over a great deal when it comes to your money decisions. Taking financial leadership in your own life can help you build greater freedom and protection for yourself and your loved ones, no matter what curveballs life throws your way.

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Not all products and services are available in all jurisdictions.

This material has been prepared for informational and educational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Morgan Stanley Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

When Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”) provide “investment advice” regarding a retirement or welfare benefit plan account, an individual retirement account or a Coverdell education savings account (“Retirement Account”), Morgan Stanley is a “fiduciary” as those terms are defined under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. When Morgan Stanley provides investment education, takes orders on an unsolicited basis or otherwise does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. For more information regarding Morgan Stanley’s role with respect to a Retirement Account, please visit www.morganstanley.com/disclosures/dol. Tax laws are complex and subject to change. Morgan Stanley does not provide tax or legal advice. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made with respect to a Retirement Account.

By providing a link to a third party website or online publication or article, Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is not implying an affiliation, sponsorship, endorsement, etc. with the third party or that any monitoring is being done by Morgan Stanley of any information contained within the article or web site. Morgan Stanley is not responsible for the information contained on the third party web site or your use of or inability to use such site. Nor do we guarantee their accuracy and completeness. The terms, conditions, and privacy policy of any third party web site may be different from those applicable to your use of any Morgan Stanley web site. The opinions expressed by the author are solely their own and do not necessarily reflect those of Morgan Stanley. Professional designations mentioned in the articles may or may not be approved for use at Morgan Stanley. Securities, investments, strategies or products mentioned or discussed on the third party website or online publication are neither an endorsement nor solicitation by Morgan Stanley. The information and data provided by the third party web site or publication is as of the date of the article when it was written and is subject to change without notice. Past performance is not a guarantee of future results. CRC 5484368   3/2023

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.

Part of investing in the Black community also means empowering our financial future. One surefire way to do that is through building up your own personal financial wellness as a person of color.

Here are four steps you can take in your personal finances to help you take control of your money and work to build wealth.

Building financial stability and wealth can be challenging — especially for many Black Americans, who also face the aftereffects of decades of inequality. Some sobering numbers:

• Research from the Minneapolis Fed suggests that while today’s racial wealth gap links all the way back to unequal levels of wealth in 1870, the gap actually grew roughly 0.1% per year between 1980 and 2020.
• Today, white Americans (60% of the U.S. population) hold 84% of the country's total wealth, while Black Americans (13% of the U.S. population) hold just 4%.
• White workers are paid more than Black and Hispanic workers at nearly every educational level, with white college graduates earning $35.90 an hour and Black college graduates $27.81 an hour in 2019.2
• When data are not controlled for equal education or experience levels, Payscale found that Black women earn just 79 cents for every $1 for white men.

It’s important to acknowledge and even grieve these realities. Make sure to give yourself empathy when it comes to your personal finances: There are some macro forces outside of your control.

This doesn’t at all mean we should accept the status quo or stop fighting for social and economic justice. Rather, remembering this wider perspective when it comes to your own wallet can help you identify what is in your control, identify your personal priorities and start making more intentional choices with your money wherever you are today.

An important first step in achieving greater financial health is building a financial support system. Your first and best ally is always yourself, so invest in your financial skill set. This could mean anything from auditing a business course at a local college, to doing your own research on financial topics like retirement and investments, to joining educational webinars through your workplace benefits.

As well as building your own financial knowledge bank, reach out for support from others. Access to workplace benefits like financial wellness programs, financial advice or even equity awards can provide opportunities to accumulate greater financial security.

If your employer offers a retirement plan, enroll and maximize any company match. If they offer you a financial wellness program, tap into any features you can use in your day-to-day life, like budgeting tools, savings support and access to professional financial advice.

Also, consider finding a financial mentor whom you can talk to about your financial goals and ideas and actions you can take to turn those dreams into reality. This could look like working with an experienced financial coach or adviser who can offer you personalized guidance, or forging new relationships in your community. Many workplace 401(k) plans are managed by an adviser, and you may be able to connect with them for free guidance as well.

Black consumers are more likely to be turned down for credit compared to white consumers, so building a stronger credit score can be an important step in opening the door to new wealth-building opportunities, like purchasing a home.

How do you improve your credit score? It may sound simple, but the first step is to not borrow more money than you can afford to pay back. Build up credit by using any credit cards you have to make small purchases — even a pack of gum — and then immediately pay off the balance. Over time, these small on-time payments can help raise your score.

Second, look for opportunities to borrow at lower rates—for example, some credit cards allow borrowers to post collateral like cash or securities in exchange for lower rates. This may not be the best move for everyone, but it may be a way to get your foot in the door.

Lastly, make sure you know how the rates on your credit cards or any other forms of debt work. Do rates increase if you miss a payment? Which of your debt charges the highest rate, and what is your minimum payment due? Prioritize paying down your most expensive debts first.

Savings and investments are just as essential as credit. If it feels like a challenge to find funds to invest or save, consider using the 50-30-20 rule to help you budget: Put about 50% of your money toward necessities like food and housing, 30% toward wants, and then you have 20% left to invest and save.

Make it a priority to build up an emergency savings fund if you don’t already have one. Start small if you must, even saving $5 at a time until you have $1,000. Then, set your sights on having enough set aside to cover three to six months’ worth of living expenses.

Just as important, invest for retirement. If you have a 401(k) through your job, great. If not, consider opening an IRA. From there, you can look into other opportunities to invest and grow your money for the future. Figure out what works for your lifestyle, and whatever you do, give your money a chance to grow.

Building a Better Future

Some Black Americans may have to cover extra ground in order to generate and preserve personal wealth. Just know that no matter what the big picture is, you do have the power to make a difference in your own financial life.

What’s more, raising up your own personal net worth as a person of color can help start a ripple effect that can have a positive impact on others. Remember to show yourself empathy, and know that whatever small steps you take today can add up to help you create a better financial future for tomorrow.

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Not all products and services are available in all jurisdictions.

This material has been prepared for informational and educational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Morgan Stanley Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

By providing a link to a third party website or online publication or article, Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is not implying an affiliation, sponsorship, endorsement, etc. with the third party or that any monitoring is being done by Morgan Stanley of any information contained within the article or web site. Morgan Stanley is not responsible for the information contained on the third party web site or your use of or inability to use such site. Nor do we guarantee their accuracy and completeness. The terms, conditions, and privacy policy of any third party web site may be different from those applicable to your use of any Morgan Stanley web site. The opinions expressed by the author are solely their own and do not necessarily reflect those of Morgan Stanley. Professional designations mentioned in the articles may or may not be approved for use at Morgan Stanley. Securities, investments, strategies or products mentioned or discussed on the third party website or online publication are neither an endorsement nor solicitation by Morgan Stanley. The information and data provided by the third party web site or publication is as of the date of the article when it was written and is subject to change without notice. Past performance is not a guarantee of future results.

Morgan Stanley at Work, Morgan Stanley Smith Barney LLC, and its affiliates and employees do not provide legal or tax advice.  You should always consult with and rely on your own legal and/or tax advisors.

Morgan Stanley at Work services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley.

CRC ­5421154   1/2023

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 bolted out of the gate Tuesday after another data point showed inflation eased in October. The major markets pared some of these earlier gains in afternoon trading amid reports Russian missiles crossed into Poland, a member of NATO, but they still managed to end the day higher.

The Labor Department this morning said its producer price index (PPI), which measures what suppliers are charging businesses and other customers for goods and services, rose 8% year-over-year in October. This was slower than September's 8.4% increase. On a monthly basis, the PPI accelerated 0.2%, matching last month's number. Core PPI, which excludes volatile energy and food prices, also rose at a slower pace than what was seen in September.

"The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "The market embraced last week's consumer downtick and today's initial reaction seems to be more of the same as expectations rise that the Fed could pull back from 75 basis point hikes next month, especially considering [Federal Reserve Board Vice Chair Lael] Brainard's comments on slowing the hikes yesterday."

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The market also responded positively to third-quarter earnings beats from retail giants Home Depot (HD, +1.6%) and Walmart (WMT, +6.5%). These results come ahead of a busy stretch of retail earnings, with Lowe's (LOW, +2.0%) and Target (TGT, +4.0%) on deck to unveil their Q3 financial results.

At the close, the Dow Jones Industrial Average was up 0.2% at 33,592, the S&P 500 Index was 0.9% higher at 3,991, and the Nasdaq Composite had gained 1.5% to 11,358.

Warren Buffett's Q3 Buys and Sells

The Nasdaq's outperformance came largely at the hands of semiconductor stocks. And the most talked about chipmaker today was Taiwan Semiconductor Manufacturing (TSM), which rallied 10.5% on news that one of Wall Street's most revered investors took a massive stake in the company. 

Specifically, Warren Buffett's Berkshire Hathaway (BRK.B) late Monday filed its latest Form 13F, a quarterly disclosure the Securities and Exchange Commission (SEC) requires of all institutional investors with $100 million or more in assets. The regulatory filing revealed that Buffett bought 60.1 million shares in the world's biggest semiconductor manufacturer, making TSM the 10th largest position in the Berkshire Hathaway equity portfolio. 

This wasn't the only move Buffett & Co. made in the third quarter, though. Here, we take a closer look at all the stocks Warren Buffett bought and sold in Q3, including the one position he completely exited. Check them out.

Stocks spent most of the day lower as investors awaited the conclusion of the Federal Reserve's two-day policy meeting, but enjoyed a short-lived burst higher after the central bank issued its fourth straight 75 basis point rate hike (a basis point equals 0.01%). 

What sparked that brief turnaround was dovish language in the Fed's statement that said the central bank will consider "the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments." In other words, the Fed could cut back on the scale of its future rate hikes if data confirms inflation is easing.

Many of Wall Street's top minds chimed in after the Fed rate hike, including Mike Loewengart, head of portfolio construction at Morgan Stanley Global Investment Office. "Investors seem to be embracing the Fed's acknowledgment that the work they have done will take time to sink in, which could be interpreted as the most painful hikes are behind us," Loewengart says. "Keep in mind though that the Fed remains adamant that its decisions will be based on hard data – most importantly, clear signals that inflation is finally on a downward path. So while hikes are likely still on the horizon, what the Fed says is now as important as what the Fed does."

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The major market indexes enjoyed gains ranging from 0.7% to 1.1% in the immediate aftermath of the central bank's decision, but swung sharply lower after Fed Chair Jerome Powell said in his subsequent press conference that it was "very premature" to think about pausing rate hikes. At the close, the Dow Jones Industrial Average was off 1.6% at 32,147, the S&P 500 Index was 2.5% lower at 3,759, and the Nasdaq Composite was down 3.4% at 10,524.

Top Energy ETFs to Consider as Oil Prices Rise

One pocket of strength in the market today were oil prices, with U.S. crude futures climbing 1.8% to $90 per barrel. Oil prices are now up more than 17% from their late-September lows near the $77 per-barrel mark. 

What's behind the upswing? "Demand appears to have strengthened, if the drawdowns in U.S. inventories are anything to go by," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "Figures from the American Petroleum Institute showed that crude stocks fell by 6.5 million barrels last week, bucking forecasts that there would be a build-up instead." Streeter also points to unconfirmed speculation of a change to China's zero-COVID policy, "which would also be supportive of commodity prices, given how demand has been weakened during repeated lockdowns." 

Whatever the reason, continued gains in crude futures could certainly benefit these top energy stocks, while energy exchange-traded funds (ETFs) that hold them and others would also reap the rewards. Here, we've compiled some of the best energy ETFs to gain exposure to oil and gas stocks. Check them out.

Morgan Stanley recently said that it expects U.S. home prices to drop by 7% between now and December 2023. That might not seem like a lot, but if its prediction comes true, it would be the second-largest decline in housing prices since the Great Depression.

That's not going to be good for the stock market. Here's why.

The average family has two household finance buckets: income and spending. Money comes into the income bucket from your job, freelance gig, small business and passive investments such as stocks and exchange-traded funds (ETFs).

That income goes out to pay all of your fixed and variable expenses. The mortgage or rent check is the biggest fixed expense for most American households. Whether you rent or own, housing affordability is near or at all-time lows, leaving little for other savings-related initiatives such as your retirement plan.

"Affordability is already challenged, exposing would-be homeowners to an increasing rent environment that erodes their ability to save for a down payment. If that were to be combined with increasing unemployment, we could imagine a scenario in which existing home sales continue to outpace the GFC to the downside," Fortune contributor Lance Lambert reported recent comments from Morgan Stanley researchers.

If you're renting and interested in buying a house, the upside of falling prices is that you're going to be able to find your dream home for less. The downside of falling home prices is that your carrying costs will be higher due to increased mortgage rates.

So, for the renter, the savings are fleeting.

For the mortgage-free homeowner who doesn't plan on moving, their circumstances won't change much. However, the household that's been considering refinancing won't be nearly as enthusiastic about the process today as they were a year ago.

We know this from current mortgage refinancing activity.

According to the Mortgage Bankers Association's Refinance Index, refinance applications fell by 18% for the week ending Sept. 30, 2022, compared to the previous week. Meanwhile, applications were down 86% from the same week a year ago. They've all but dried up.

Whether you're a renter or a homeowner, now is not a good time to be making long-term decisions.

Home Prices and the Stock Market

As for stock markets, the current environment of rising interest rates, falling home prices and high inflation is a triple whammy because it makes it that much harder for the average saver to come up with funds to invest.

Empirically, it's been shown that home prices do influence stock prices.

The obvious example would be the Great Recession, which officially lasted 19 months, from December 2007 to June 2009.

According to Federal Reserve data, U.S. household wealth fell by approximately $16.4 trillion from the first quarter of 2007 ($65.8 trillion) to the first-quarter of 2009 ($49.4 trillion). Two years after the official end of the recession, Americans had barely regained 50% of their lost wealth.

At the same time, real estate values fell by almost 30% from the beginning of 2007 to the end of 2010, while the S&P 500 declined by 12% over that same time frame.

While no one is predicting that home prices will fall anywhere near 30% this time around, it's important for investors to realize that indexes such as the S&P 500 and Dow Jones Industrial Average aren't likely to reverse course in the near term.

So, if you're thinking of buying stocks in the fourth quarter, the data suggests the odds of success are stacked against you.

Stocks' volatility continued Thursday, sparked by a weak start to second-quarter earnings season and another sizzling inflation update.

On the earnings front, JPMorgan Chase (JPM, -3.5%) this morning said profit in the second quarter was down 28% from the year-ago period, while revenue rose a modest 1%. The financial firm also said it is suspending stock buybacks in order to boost its capital reserves. Fellow big bank Morgan Stanley (MS, -0.4%) also saw its profit sink – down 29% year-over-year – while revenue plunged 11%.

Also in focus today was the latest reading of the producer price index (PPI), which confirmed what Wednesday's scorching consumer price index (CPI) report already told us: Peak inflation was not reached last month. Data from the Labor Department showed that the PPI, which measures how much suppliers are charging businesses and their customers for their goods, surged 11.3% year-over-year in June, its seventh straight month of double-digit annual percentage gains. On a sequential basis, wholesale prices were 1.1% higher.

One positive from the report was that the core PPI, which excludes the volatile energy and food sectors, was up 0.3% over the prior month – or down slightly from May's 0.4% increase.

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"It’s clear that food and energy are driving PPI higher, as was the case in yesterday's inflation print," says Peter Essele, head of portfolio management for Commonwealth Financial Management. "When removing these volatile components, PPI appears to have peaked and is starting to roll over, a tell-tale sign that the economy is shifting into late-cycle territory. The probability of a 100-basis-point hike from the Fed in late July has greatly increased after the two price index releases."

The one-two punch had stocks wallowing deep in negative territory for most of the morning, but the major benchmarks climbed well off their session lows by the close. The S&P 500 Index (-0.3% at 3,790) and Dow Jones Industrial Average (-0.5% at 30,630) still suffered their fifth straight loss, however, while the Nasdaq Composite ended marginally higher at 11,251.

Other news in the stock market today:

• The small-cap Russell 2000 slumped 1.1% to 1,707.
• U.S. crude futures shed 0.5% to finish at $95.78 per barrel.
• Gold futures slumped 1.7% to $1,705.80 an ounce, their lowest settlement since March 30, 2021.
• Bitcoin climbed 4.9% to $20,603.56. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Conagra Brands (CAG) fell 7.3% after the packaged food maker reported fiscal fourth-quarter revenue of $2.91 billion, below analysts' consensus estimate for revenue of $2.93 billion. However, CAG's adjusted earnings of 65 cents per share beat the average estimate by 2 cents. The company also said it plans to raise prices in the second quarter of fiscal 2023 in order to offset higher costs related to inflation. CFRA Research analyst Arun Sundaram maintained a Buy rating on the consumer staples stock after earnings. "We expect margins to improve in FY 23 with more pricing flowing through and cost inflation likely approaching its peak," the analyst says. "Also, cost savings should be easier to realize in FY 23 as the overall supply chain stabilizes. Together, we see more upside than downside to CAG's FY 23 bottom-line targets as the fiscal year progresses."
• Energy stocks suffered notable losses as crude futures continued to slide. APA (APA, -4.0%), Diamondback Energy (FANG, -3.5%) and EOG Resources (EOG, -3.6%) were just a few of the day's biggest decliners.

Play Green Energy Stocks for Long-Term Growth Trends

Market volatility is likely to continue for the time being, which creates an especially uncertain environment for investors. "Inflation has taken a bite out of stock and bond markets – and the bite may not be over quite yet," says Liz Young, head of investment strategy at SoFi. "Before the end of the month, we could get negative earnings guidance, a 75-100 basis point hike from the Fed, and a negative Q2 GDP print. This scenario could prove to be bad news for markets, but good news for buyers."

Although Young suggests investors "don't swing for the fences," she does believe that "we have to start swinging the bat before summer is over." And there's certainly plenty good of pitches to hit for investors of all stripes.

Those wanting to boost the income-producing parts of their portfolios may want to consider these discounted Dividend Aristocrats. The best Dow dividend stocks are another great place to find reliable and rising payouts.

Other investors might be keen on long-term growth trends. If that's the case, green energy stocks look like a fountain of opportunity. Indeed, the renewable energy market is forecast to grow to almost $2 trillion by the end of the decade. These top-rated picks are well-positioned to take a piece of that pie.

Stocks fell across the board at the holiday-shortened trading week's conclusion as mixed bank earnings and cloudy economic data dampened bulls' enthusiasm.

The Commerce Department on Thursday reported that while retail sales did indeed grow for the third consecutive month, inflation clearly took a bite. March's retail sales were up 0.5% month-over-month, a slowdown from February's upwardly revised 0.8% growth and lower than expectations for 0.6% expansion.

"There's no doubt rising energy and gas prices are starting to take a toll on household budgets," says Peter Essele, head of portfolio management for Commonwealth Financial Network. "March's report could be an early sign that consumers are starting to put away their wallets as prices for many goods soar across the board."

Also Thursday, the Labor Department said initial jobless claims for the week ending April 9 climbed a bit from the prior week, to 185,000 from 167,000 (revised), which was well more than the 170,000 expected.

Meanwhile, the first-quarter earnings season continued its debut with a mixed slate of reports from the nation's largest financial-sector firms.

Wells Fargo (WFC, -4.5%) stumbled hard as a decline in mortgage lending caused its Q1 revenues to come up short of Wall Street's mark; profits were better than expected but still were off 21% year-over-year.

Morgan Stanley's (MS, +0.8%) earnings were off 8%, but the stock was slightly in the green as a blowout quarter for its trading desks fueled easy top- and bottom-line beats. Similar success in Goldman Sachs (GS, -0.1%) and Citigroup's (C, +1.6%) trading divisions helped them easily hurdle earnings expectations, though both suffered 40%-plus declines in profits.

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And super-regional bank U.S. Bancorp (USB, +4.2%) was one of the sector's top performers after besting Q1 estimates, though here too, earnings were off from year-ago levels.

"This looks like a case where the banks underpromised and overdelivered as a way of putting lipstick on a very unattractive quarter," says Anthony Denier, CEO of trading platform Webull. "Overall earnings were terrible, but because they led analysts to believe their earnings would be worse, investors were happy."

Even Twitter (TWTR, -1.7%) managed to fall despite explosive M&A news. Just more than a week after it was reported that Tesla (TSLA, -3.7%) CEO Elon Musk had built up a 9%-plus stake in the social media platform, a new filing revealed that Musk is trying to buy Twitter outright for $54.20 per share.

The Nasdaq Composite took the worst brunt, off 2.1% to 13,351, good for a 2.6% weekly decline. The S&P 500 (-1.2% to 4,392) was down 2.2% for the week, and the Dow Jones Industrial Average's modest 0.3% dip to 34,451 cemented a 0.8% weekly loss.

And a quick reminder: Tomorrow (Good Friday) is a stock market holiday.

Other news in the stock market today:

• The small-cap Russell 2000 shed another 1% to 2,004, putting the index ahead by 0.5% for the week.
• U.S. crude oil futures jumped 2.6% to finish at $106.95 per barrel.
• Gold futures snapped their five-day winning streak, slipping 0.5% to settle at $1,974.90 an ounce.
• Bitcoin dropped back below the $40,000 mark, declining 3.1% to $39,782.41. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.
• Susquehanna Financial Group analyst Mehdi Hosseini downgraded Seagate Technology (STX, -3.2%) to Negative (Sell), saying quarterly cloud spending may peak in the second half of this year. This will likely be followed by relatively weaker spend trends into 2023, the analyst adds. While some of this is already priced, Hosseini argues "the extent of deceleration in cloud capex spend by year-end 2022 and into 2023, and its impact, is still not dialed into expectations and certainly not in the current consensus.. The analyst also downgraded fellow tech stock Western Digital (WDC, -3.2%), to Neutral (Hold).
• Nike (NKE) was the best Dow Jones stock today, gaining 4.7% after UBS Global Research analyst Jay Sole (Buy) said he was "very bullish" on the blue chip. "Nike will be a long-term outperformer, in our view," Sole says. "The company's investments in product innovation, supply chain speed, and digital are unlocking what is likely a multiyear period of above average growth. We forecast a 16% four-year earnings per share compound annual growth rate."

How Do You Fight Off Rising Prices? With Pricing Power!

Earlier this week, consumer and producer price reports alike showed that U.S. inflation is still in a full-blown sprint. That has Wall Street strategists continuing to look for stocks that can stave off inflation.

UBS's analyst team has just taken a look into pricing power, a company's ability to raise prices without significantly reducing demand.

"With inflation pressures surging, pricing power relative to cost exposures will be a key theme and source of alpha for global equity markets," says UBS's team. "Historically, when the U.S. two-year inflation breakeven has been above 2.5%, companies with strong pricing power have outperformed their weak counterparts by nearly 14% on average over the next 12 months."

UBS goes on to highlight a number of U.S. and international stocks that boast strong pricing power – as well as some names that come up short and could struggle as long as inflation remains hot. Read on as we explain more about this tactic for tackling inflation and look at UBS's winners and losers.

Sports betting stocks remain one of the market's hottest areas, and industry experts expect more of the same in the years ahead.

It's difficult to get a pulse of exactly how big the industry might become; estimates for the size of the sports betting market vary greatly in size and time horizon. However, according to a Gabelli Securities and Census Bureau study, U.S. sports betting revenues are expected to grow from $2.1 billion in 2021 to $10.1 billion in 2028.

Several Wall Street research firms are targeting even bigger growth. Morgan Stanley believes the U.S. sports betting market could hit $15 billion annually by 2025, while Macquarie's forecast is $30 billion by 2030.

But one thing is clear: The stakes are high.

"Every play and move in sports entails an outcome that can be bet on," says Luke Lloyd, a wealth advisor and investment strategist at Strategic Wealth Partners. "Sports betting allows people to be more engaged in the game, specifically every play, usually making it more fun and entertaining to watch."

He adds that the increase in popularity among fantasy sports has boosted engagement from younger crowds. This, in turn, is "leading to a path of growth for many companies in the long-term as sports-betting makes its way throughout the U.S. and the world."

Read on as we evaluate nine of the best sports betting stocks in the market. Each of these picks – eight stocks and one exchange-traded fund (ETF) – provides access to gains in sports wagering, though some are more direct bets on the trend, while others are more diversified plays on gambling generally.

Data as of Sep. 17. Analysts' average long-term growth rate expectations represents the estimated average rate of earnings growth for the next three to five years. The average target price is the stock price analysts expect to see over the next 18 months. All analyst data is courtesy of S&P Global Market Intelligence.

• Market value: $37.2 billion
• Analysts' average long-term (LT) earnings growth rate: N/A
• Analysts' average target price: N/A

Flutter Entertainment's (PDYPY, $106.15) FanDuel subsidiary was one of a handful of U.S. sportsbooks to partner with the NFL this year.

"On Superbowl Sunday, we got a glimpse at how powerful the combination of the NFL's excitement and our platform can be in delivering an enhanced fan experience," outgoing FanDuel CEO Matt King said when the deal was announced. "We are delighted to make that combination official by pairing America's #1 sportsbook with America's #1 sports league."

FanDuel merged with Paddy Power Betfair's U.S. operations in 2018 after a potential merger with DraftKings (DKNG) was called off due to regulatory concerns. Paddy Power contributed its U.S. assets plus $158 million in cash to the deal, some of which was used to pay down FanDuel's debt. Paddy Power shareholders got 61% of the merged entity with options to increase the ownership to 80% and 100% over time.

In 2019, Paddy Power Betfair changed its name to Flutter Entertainment, but as you can see, it retained the PDYPY ticker that trades over-the-counter.

In the first six months of 2021, in the 10 states where it had sports betting online, Flutter had 31% of the market, with its sports betting share at 45% and online gaming at 20%. It has a leading market share in states such as New Jersey and Pennsylvania with mature online betting, as well as newer states like Michigan and Virginia.

Flutter is expected to spin off FanDuel at some point in 2022, though nothing has been confirmed.

• Market value: $24.4 billion
• Analysts' average LT earnings growth rate: 4.5%
• Analysts' average target price: $70.56

DraftKings (DKNG, $60.42) is arguably one of the most well-known sports betting stocks out there. DKNG has been a public company for 17 months, but it has already made a mark on the industry. DraftKings completed its reverse merger with a special purpose acquisition company (SPAC) on April 24, 2020. Since then, the stock is up more than 200%.

Why?

Analysts love the stock and the online gaming industry in which it competes. Of the 27 analysts who cover DKNG stock that are tracked by S&P Global Market Intelligence, 15 rate it a Strong Buy, four say it's a Buy and eight call it a Hold. The average target price is $70.56, providing investors with a reasonable amount of expected upside from current prices.

Not only has DraftKings' stock performed well since merging with a SPAC, but it's also been exceptionally busy adding new business partners and making transformative acquisitions.

In April of this year, DraftKings became another one of the companies to become an official sports betting partner of the NFL. As part of the agreement, DraftKings will also work with the NFL to create free-to-play NFL-themed games.

And in early August, the company announced that it would buy Golden Nugget Online Gaming (GNOG) in an all-stock transaction valued at $1.56 billion. The deal will give DKNG access to the iGaming company's more than 5 million customers. In addition, the two firms expect to generate roughly $300 million in synergies once Golden Nugget's online business is fully integrated into DraftKings' operations.

The acquisition is expected to close in early in 2022.

In September, DraftKings announced the launch of online sports betting in Arizona. It is the 14th state where it's opened a mobile sportsbook for those 21 and older.

"With the launch of our digital sportsbook coinciding with NFL kickoff, the busiest and most exciting time of the year for our company, we could not have imagined a better time to introduce Arizona's sports fans to the DraftKings experience,” said Matt Kalish, co-founder and president of DraftKings North America.

DKNG launched its daily fantasy sports product in The Grand Canyon State a few weeks before kicking off its digital sportsbook. This made Arizona the 44th state to get online fantasy sports.

• Market value: $22.6 billion
• Analysts' average LT earnings growth rate: N/A
• Analysts' average target price: $123.86

It's been more than a year since Caesars Entertainment (CZR, $106.07) and Eldorado Resorts completed their $17-billion merger in July 2020. The cash-and-stock deal saw Eldorado pay Caesars shareholders $7.2 billion in cash, issue 77 million shares of its stock and assume Caesars' long-term debt. Eldorado shareholders ended up with 51% of the merged entity, with Caesars' shareholders owning the rest.

"Together, we will have an extremely powerful suite of iconic gaming and entertainment brands," Eldorado CEO Tom Reeg said when announcing the deal in June 2019, "as well as valuable strategic alliances with industry leaders in sports betting and online gaming."

The merged business, which Reeg runs, owns and operates more than 49 casino properties in 16 states with 55,300 slot machines and video lottery terminals, 3,000 table games, 46,200 hotel rooms and sports wagering in 17 states.

In April 2021, the company acquired William Hill for around $4.0 billion. In September, it agreed to sell William Hill's non-U.S. assets for 2.2 billion British pounds ($3.0 billion). As a result, Caesars will generate $1.2 billion in net proceeds after paying down the debt attached to those assets.

BofA Securities analyst Shaun Kelley suggested that the sale of these assets could add $5 per share in value to share price of the sports betting stock. Kelley has a Buy rating on CZR and a target price of $125, which is significantly higher than its current value.

• Market value: $20.0 billion
• Analysts' average LT earnings growth rate: 11%
• Analysts' average target price: $47.74

MGM Resorts (MGM, $41.54) partnered with Entain, formerly known as GVC Holdings in 2019, to launch the online sportsbook BetMGM in New Jersey. In March 2020, it did the same in Nevada. Today, it has mobile sports betting available in 13 states, with retail sports betting available in five states and many more to come.

On Sept. 9, BetMGM launched mobile sports betting in Arizona. It plans to open the first of its kind BetMGM Sportsbook in 2022 at State Farm Stadium, the home of the Arizona Cardinals.

In 2020, BetMGM generated approximately $178 million in revenue. In 2022, it's expected to reach $1 billion in revenue from the app's 160 million customer profiles. The company doesn't expect BetMGM to be profitable until 2023.

Rumors have surfaced that MGM Resorts is considering making a play for one or both of Flutter Entertainment and Skillz (SKLZ), a mobile esports company that went public in 2020 through a SPAC merger, though nothing has been confirmed.

MGM Resorts recently got an upgrade from Bernstein analyst Vitaly Umansky to Outperform from Market Perform (the equivalents of Buy and Neutral, respectively). In addition, he nearly doubled his target price on the stock to $58.90 from $29.60.

Umansky likes its gaming and sports betting businesses. In addition, MGM continues to have some of the most prime real estate in the casino industry.

• Market value: $11.7 billion
• Analysts' average LT earnings growth rate: N/A
• Analysts' average target price: $100.00

While Penn National Gaming (PENN, $74.59) is best known for operating 43 gaming and racing properties in 20 states, it is the company's growing exposure to sports betting that has sports fans frothing over its shares.

Penn acquired a 36% stake in Barstool Sports in early 2020. Its partnership with the sports media empire run by Dave Portnoy, has piqued investors' interest. It expects to be operating its Barstool Sportsbook online app in 10 states by the end of 2021.

In August, Penn opened the $120 million Hollywood Casino York in Pennsylvania. The roughly 80,000 square-foot casino has more than 500 slot machines, 24 table games and the first retail Barstool Sportsbook operating in the state. It is the company's 43rd property in North America. It will be a cardless, cashless and contactless facility.

In September, Penn announced it will pay $2 billion for Score Media and Gaming (SCR) in a cash-and-stock transaction that sees the Canadian company's shareholders receive $17 in cash plus 0.2398 shares of PENN stock for every SCR share held. Upon completion of the acquisition, Score shareholders will own 7% of Penn's shares. The transaction is approximately 50/50 between cash and stock.

The acquisition accelerates Penn's digital media and gaming strategy. Score Media's engaging content is expected to drive traffic to its various properties both online and in-person. Long term, it expects to generate more than $500 million in annual adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from cost synergies, along with almost $1 billion in additional revenue.

Score's user base averages 113 minutes per month viewing its content, more than major sites such as the Bleacher Report and ESPN. It is the number one sports media brand in Canada and number three in North America.

• Market value: $8.7 billion
• Analysts' average LT earnings growth rate: 118%
• Analysts' average target price: $252.83

The sign of a resilient stock is one that's able to deliver positive results despite everything going on around it being anything but ordinary.

On May 1, Churchill Downs (CHDN, $226.91) hosted the 147th running of the Kentucky Derby – the traditional first leg of the Triple Crown, which also includes stops in Baltimore for the Preakness Stakes and in New York for the Belmont Stakes.

In 2021, the Derby was back to its traditional spot as the first race in the Triple Crown, held on the first Saturday in May. Approximately 51,838 people attended the event, the highest number of people at a U.S. sporting event since the pandemic began, according to NBC News. In 2019's running of the Derby, 150,729 were in attendance.

CHDN has put up a total return (price plus dividends) of 16.5% in 2021, less than the 18.3% return for the broader U.S. market. Longtime owners of Churchill Downs stock have become accustomed to excellent returns. Over the past decade, CHDN shareholders have enjoyed an annualized total return of 32.8%, more than double the entire U.S. market.

One of the reasons for these above-average returns is its diversification of revenue streams to include online wagering for horse racing through TwinSpires.com, sports betting and iGaming through its BetAmerica platform, and in-person casinos in eight states.

The company's second-quarter revenues increased 178% year-over-year to a record $515 million, with record adjusted EBITDA of $233 million.

CHDN is as resilient as sports betting stocks come. Look for Churchill Downs to continue to benefit from the boom in sports wagering.

• Market value: $4.2 billion
• Analysts' average LT earnings growth rate: N/A
• Analysts' average target price: $19.88

Rush Street Interactive (RSI, $19.23) went public via a merger with dMY Technology Group, a SPAC, on Dec. 30, 2020. RSI shares have lost about 11% of their value since then.

Despite the online gaming and sports betting stock failing to deliver for shareholders, its business has done well so far in 2021. On the top line, it brought in $122.8 million in the second quarter, 89% higher than a year earlier. On the bottom line, its net loss was $14.0 million, down from a net loss of $63.5 million in the year-ago period.

As a result of its strong showing so far in 2021, the company raised its guidance for the remainder of the year. It now expects sales of at least $480 million at the midpoint of its guidance, up from $460 million previously. That represents 72% year-over-year growth.

RSI stock was added to both the Russell 2000 Index and Russell 3000 Index in June as part of the indexes' annual reconstitution.

In early August, Macquarie analyst Chad Beynon initiated coverage of Rush Street with an Outperform (Buy) rating and a target price of $21. It's up almost 92% since then.

"As a relative pure play and early market share leader in the U.S. iGaming space, Rush Street Interactive is well-positioned for continuous growth from the burgeoning North American iGaming and online sports betting (OSB) market,” the analyst wrote in a note to clients, per Casino.org.

Based on the company's potential for a 6% market share in iGaming and 3% in sports betting, the analyst believes RSI could hit $1.4 billion in annual revenue by 2028, a compound annual growth rate of 18%.

• Market value: $684.5 million
• Analysts' average LT earnings growth rate: N/A
• Analysts' average target price: $24.00

GAN (GAN, $16.29) is short for GameAccount Network, a provider of online gaming software and services to casinos in the U.S. and elsewhere. It provides both real money and simulated iGaming and sports betting software and gaming applications to these casinos.

The U.K. company went public in May 2020, selling 6.4 million shares at $8.50 apiece for gross proceeds of $54 million. Since going public, its shares have traded as high as $31.81 and as low as $10.60. Overall, it's up 92% since its initial public offering (IPO).

In mid-August, the company announced a second-quarter net loss of 7 cents per share, six cents worse than the average analyst estimate. However, GAN's revenues increased 24% from the first quarter, thanks to its January 2021 purchase of internet gaming software-as-a-service (SaaS) provider Coolbet for $175.9 million.

Coolbet's business-to-consumer sports betting technology meshes nicely with GAN. The company expects to have an integrated offering for the U.S. market by the end of this year's third quarter.

Still, the hard numbers suggest things are going well for GAN.

Despite getting lost in the shuffle of these other sports betting stocks, GAN's business shows significant traction in both simulated and real money iGaming. As a result, any declines in its stock price would present a buying opportunity that hasn't been seen since its IPO in 2020.

• Assets under management: $405.7 million
• Expenses: 0.75%, or $75 annually on every $10,000 invested

The Roundhill Sports Betting & iGaming ETF (BETZ, $31.63) is a passive investment that tracks the performance of the Roundhill Sports Betting & iGaming Index, a collection of stocks whose companies operate sportsbook, whether in-person or online, online gambling platforms, and companies that provide technology to these companies.

BETZ was launched in June 2020. It currently has 42 holdings, with its top 10 accounting for 44% of its overall portfolio. Six of the top 10 are sports betting stocks featured here, including Rush Street Interactive (6.3%) and DraftKings (4.8%).

The holdings are pretty diversified, with large-cap stocks accounting for 45%, mid-caps for 39% and small-caps for the remaining 16%. You also get geographic diversification, with the U.S. accounting for just 36.8%, followed by 12.5% for Malta and Australia at 9.7%.

Two statistics keep investors engaged in this growing industry.

First, sports betting is expected to be available to 96% of Americans by the end of 2025. Second, on the iGaming front, online gambling is projected to hit $100 billion globally by 2023.

Another sign that sports betting is becoming a major trend: ETF Series Solutions at the end of August filed a prospectus for an actively managed sports betting ETF. The new fund will be named the iBet Sports Betting & Gaming ETF and trade under the symbol "IBET." The ETF will charge 0.79%, which is only four basis points (a basis point is one-one hundredth of a percentage point) higher than passively managed BETZ.

While it's something to be aware of before investing in BETZ, the Roundhill Sports Betting & iGaming ETF's leading position within gaming funds should enable it to continue gathering assets under management.

Learn more about BETZ at the Roundhill provider site.

When the stock market took a beating this spring, nervous investors looked to bond mutual funds and exchange-traded funds (ETFs) for protection and sanity. After all, fixed income typically provides regular cash and lower volatility when markets hit turbulence.

And the markets absolutely hit turbulence. For instance, between Feb. 19 and March 10, not only did the S&P 500 experience a historically rapid loss of 14.8% – it experienced a dramatic rise in volatility, too, hitting its highest level on that front since 2011, says Jodie Gunzberg, chief investment strategist at New York-based Graystone Consulting, a Morgan Stanley business. The index's losses and volatility escalated even more through the March 23 lows.

However, bonds offer ballast – "not only downside protection but also moderate upside potential as investors tend to seek out the safety of U.S. government and investment-grade corporate bonds amid stock market uncertainty" – says Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, a New York-based investment research company.

Bond prices often are uncorrelated to equities. Stocks typically do well in periods of economic growth, whereas bonds typically do well in periods of declining economic activity, Gunzberg says. The Federal Reserve has also thrown in its support, buying up corporate bonds and even bond ETFs over the past couple months, in turn driving up private purchases of debt.

Indeed, bond funds have done extremely well in 2020. Of course, yields have thinned out and their room for upside has shrunk as a result. Nonetheless, investors still can find stability and some measure of income in these products.

Here are 12 bond mutual funds and bond ETFs to buy. These funds offer diversified portfolios of hundreds if not thousands of bonds, and most primarily rely on debt such as Treasuries and other investment-grade bonds. Just remember: This is an unprecedented environment, and even the bond market is acting unusually in some areas, so be especially mindful of your own risk tolerance.

Returns and data are as of July 21, unless otherwise noted. For mutual funds, returns and data are gathered for the share class with the lowest required minimum initial investment – typically the Investor share class or A share class. If you use an investment adviser or online brokerage, you may be able to buy lower-cost share classes of some of these funds. Yields are SEC yields, which reflect the interest earned after deducting fund expenses for the most recent 30-day period and are a standard measure for bond and preferred-stock funds.

• Assets under management: $71.0 billion
• SEC yield: 1.3%
• Expenses: 0.04%, or $4 annually for every $10,000 invested

Just like S&P 500 trackers such as the iShares Core S&P 500 ETF (IVV) are how you invest in "the market," the iShares Core U.S. Aggregate Bond ETF (AGG, $119.08) is effectively the way to invest in "the bond market."

AGG is an index fund that tracks the Bloomberg Barclays U.S. Aggregate Bond Index, or the "Agg," which is the standard benchmark for most bond funds. This portfolio of more than 8,150 bonds is heaviest in Treasuries, at a 38% weight, but also has significant exposure to corporate debt (28%) and mortgage-backed securities (MBSes, 25%), as well as sprinklings of agency, sovereign, local authority and other bonds.

This is an extremely high-credit-quality portfolio that has 69% of its assets in AAA debt, the highest rating possible. The rest is invested in other levels of investment-grade bonds. That makes AGG one of the best bond ETFs if you're looking for something simple, cheap and relatively stable compared to stocks.

Learn more about AGG at the iShares provider site.

• Assets under management: $58.0 billion
• SEC yield: 1.2%
• Expenses: 0.035%

The Vanguard Total Bond Market ETF (BND, $88.99) is another name in broad-exposure bond funds. It targets U.S. investment-grade bonds and is geared for investors with medium- or long-term goals.

"Total" bond ETFs like BND incorporate a wide spectrum of fixed-income investments in a passively managed vehicle, says Mike Loewengart, managing director of investment strategy at online brokerage firm E*Trade Financial.

"Fixed-income investments can add ballast to your portfolio, especially during wild market swings," he says. "Investors leverage bonds because they are more predictable than equity investments, albeit a bit more boring, which turns off some investors."

BND holds more than 9,650 bonds, with about 42% of those holdings in Treasury and other agency debt, 29% in investment-grade corporates, 24% in MBSes and the rest sprinkled across bonds such as sovereign debt and asset-backed securities (ABSes). It's also available as a mutual fund (VBTLX).

Learn more about BND at the Vanguard provider site.

• Assets under management: $5.2 billion
• SEC yield: 1.7%
• Expenses: 0.06%*

The iShares Core Total USD Bond Market ETF (IUSB, $54.78) is another strong core bond fund that provides a blend of primarily investment-grade debt, but it also has some exposure to higher-yield bonds that AGG doesn't.

IUSB's portfolio, which includes nearly 10,000 bonds, is most heavily weighted in investment-grade corporate debt from the likes of AT&T (T) and JPMorgan Chase (JPM), at a third of assets. Another 31% is invested in Treasuries, and 23% is allocated to mortgage-backed securities. The rest is sprinkled among agency issues, international sovereign debt and other types of bonds.

This indexed ETF does have a "slight exposure to high-yield bonds, which tend to do better in a risk-on environment," CFRA's Rosenbluth says. But otherwise, nearly 91% of this bond ETF's holdings are investment-grade, including a 58% slug in AAA-rated bonds.

The yield, at 1.7%, is about on par with the S&P 500 right now. But IUSB has been far, far less volatile than the blue-chip stock index. It also has outperformed, with a 6.6% return that beats the S&P by roughly 470 basis points. (A basis point is one one-hundredth of a percent.)

* Includes a 1-basis-point fee waiver.

Learn more about IUSB at the iShares provider site.

• Assets under management: $14.2 billion
• SEC yield: 0.4%
• Expenses: 0.15%

If you're looking to focus more on stability than potential for returns or high yield, one place to look is U.S. Treasuries, which are among the highest-rated bonds on the planet and have weathered the downturn beautifully so far.

Bond ETFs like the iShares U.S. Treasury Bond ETF (GOVT, $28.11) give investors direct exposure to U.S. Treasuries. GOVT's holdings range from less than one year to maturity to more than 20 years. Roughly half of the fund is invested in bonds with one to five years left to maturity, another 26% is in bonds with five to 10 years left, and most of the rest is in Treasuries with 20 or more years remaining.

GOVT has produced a total return of more than 9% in 2020 as investors have hunkered down into safety plays. Just note that an already low yield, as well as little room for yields to go further south, really limit the upside price potential in this bond ETF. But it still might be an ideal place for investors looking for stability and just a tiny bit of income.

Learn more about GOVT at the iShares provider site.

• Assets under management: $14.9 billion
• SEC yield: 0.0%
• Expenses: 0.1359%

This is a tricky time to be buying bonds since "yields are in a race toward zero," says Charles Sizemore, a portfolio manager for Interactive Advisors, an RIA based in Boston.

"Buying longer-term bonds at these prices exposes you to interest-rate risk. If yields bounce off of these historic lows, bond prices will fall," he says. "Given that yields are modest across the bond universe, it makes sense to focus on safety rather than reach for a slightly higher yield that won't really move the needle that much anyway."

In an environment like this, Sizemore believes it makes sense to stay in bonds with shorter-term maturity. The SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL, $91.54) is a liquid way to get access to the short end of the yield curve. It invests in an extremely tight portfolio of just 14 bond issues with thin maturities of between one and three months – good for the truly risk-averse.

BIL hardly moves in good markets and in bad. For instance, from the start of 2020 through the March 23 market low, the S&P 500 lost more than 30% on a total-return basis. BIL? It improved by 0.5%. Since then, the S&P 500 is up 46.5%, while BIL has lost just 4 basis points.

"The yield is a moving target and may approach zero soon due the Federal Reserve slashing rates," Sizemore said in March, and that has since come to pass – BIL yields nothing right now. "But you have essentially no interest-rate risk and you're parked in the safest corner of the bond market."

Learn more about BIL at the SPDR provider site.

• Assets under management: $13.9 billion
• SEC yield: 0.9%
• Expenses: 0.35%*

If you prefer to have a human overseeing your short-term bond investments, you can look to actively managed ETFs such as PIMCO Enhanced Short Maturity Active ETF (MINT, $101.75).

Like BIL, MINT is among the more conservative bond ETFs you can buy. The fund currently has more than 800 holdings, with a stated goal of "capital preservation, liquidity and stronger return potential relative to traditional cash investments."

The trade-off? A little bit more risk than, say, a savings account or money-market fund – but far less risk than most other bond funds. The ETF's holdings are 94% invested in bonds with less than a year to maturity, with the remaining 6% invested in debt with no more than three years left. Nearly 80% of MINT's bonds have investment-grade credit ratings – the majority of that is corporates, though it also includes Treasuries and other bonds.

MINT offers a "relatively attractive yield given its minimal interest-rate risk and can be a stronger alternative to sitting on the sidelines," CFRA's Rosenbluth says.

* Includes 1-basis-point fee waiver.

Learn more about MINT at the PIMCO provider site.

• Assets under management: $29.5 billion
• SEC yield: 1.1%
• Expenses: 0.05%

Another way to invest in short-term debt is the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH, $82.89).

Given the financial damage happening to even good publicly traded companies, corporate bond funds – even ones that hold investment-grade debt – are hardly bulletproof. Thus, it's worth pointing out that 90% of the bonds in VCSH are in the A or BBB range, the lower of the four investment-grade tiers.

"But given that the holdings are investment-grade bonds with only five years or less to maturity, your risk is tolerably low," Sizemore says. Indeed, the average maturity of bonds in the fund is just under three years.

The yield of 1.1% is modest. However, relative stability and an uber-cheap expense ratio make VCSH a decent place to wait out the volatility. If you prefer mutual funds, Vanguard offers an Admiral-class version (VSCSX).

Learn more about VCSH at the Vanguard provider site.

• Assets under management: $13.6 billion
• SEC yield: 1.1%
• Expenses: 0.05%

The Vanguard Intermediate-Term Bond ETF (BIV, $93.82) is an "in the middle fund" that invests exclusively in intermediate-term, investment-grade debt.

It's another index fund, this time investing in bonds with maturities between five and 10 years. Roughly half the fund is invested in Treasuries and other U.S. government bonds, with another 46% in investment-grade corporates, and most of the rest in foreign sovereigns.

The idea here is to provide more yield than in similarly constructed funds, though at the moment, BIV's yield isn't too differentiated from shorter-term funds. Year-to-date, however, it's beating the "Agg" benchmark by 227 basis points.

Vanguard Intermediate-Term Bond ETF also has a mutual fund version (VBILX).

Learn more about BIV at the Vanguard provider site.

• Assets under management: $5.4 billion
• SEC yield: 2.3%
• Expenses: 0.05%

If you do want to roll the dice on longer-term investments for a little more yield, bond ETFs such as the Vanguard Long-Term Bond ETF (BLV, $115.43) can get the job done.

The roughly 2,500-bond portfolio is heaviest in investment-grade corporate debt (52%), followed by Treasury/agency bonds (41%). Almost all of the rest of BLV's assets are used to hold investment-grade international sovereign debt.

The added risk comes in the form of longer maturity. About 72% of the fund is invested in bonds maturing in 20 to 30 years, 23% is in the 10-to-20 range, 4% is in bonds with 30-plus years remaining, and the rest is in the five-to-10 range. Because there's more of a chance these bonds won't get paid off than bonds that expire, say, a year from now, that means this fund can rise and fall a lot more than funds like MINT that deal in short-term debt.

But the higher yield might be tempting to some investors.

"Unless you see interest rates rising in the near future, owning a long-term bond fund can provide substantially more income to your portfolio," says Daren Blonski, managing principal of Sonoma Wealth Advisors in California. "If interest rates do rise, a long-term bond fund would underperform."

Like many other Vanguard bond ETFs, BLV trades as a mutual fund (VBLAX), too.

Learn more about BLV at the Vanguard provider site.

• Assets under management: $2.2 billion
• SEC yield: 1.4%
• Expenses: 0.25%

Investors looking for an actively managed core bond mutual fund can look to Vanguard Core Bond Fund Investor (VCORX, $10.99).

VCORX invests across the spectrum of investment-grade debt, and it does so across bonds in a wide range of maturities. The portfolio includes nearly 1,300 bonds at the moment, with an average effective maturity of 7.3 years.

Government mortgage-backed securities are the largest chunk of holdings at almost 37%, followed by investment-grade corporates (35%) and Treasuries (16%). But it has several other sprinklings, including foreign sovereign bonds, asset-backed securities and short-term reserves.

VCORX a young fund that only got its start back in 2016, but so far it’s doing well, with a three-year total return of 18.4% that’s more than a percentage point better than the AGG ETF’s total return. And this actively managed fund is priced like an index fund at 0.25% in annual fees.

Learn more about VCORX at the Vanguard provider site.

• Assets under management: $50.4 billion
• SEC yield: 2.94%
• Expenses: 0.73%

Managed by well-known bond portfolio manager Jeffrey Gundlach, the DoubleLine Total Return Bond Fund Class N (DLTNX, $10.76) acts as a "nice diversifier to core fixed income while providing current income without overstretching in quality for higher yield and strong risk-adjusted returns in varying market and interest-rate environments," says Nicole Tanenbaum, partner and chief investment strategist at Chequers Financial Management, a San Francisco-based financial planning firm.

While DLTNX is a "total return" fund, its primary vehicle is mortgage-backed securities of varying types. Nearly 80% of the bond mutual fund's assets are invested in these right now, with the rest sprinkled among debt such as Treasuries and other asset-backed securities, as well as cash.

"In today's persistent low-yield environment, many investors had been drifting away from safer core bond holdings toward riskier, high-yield credit given the more attractive yields they offer," Tanenbaum says. "While it may be tempting to reach for these higher yields to generate more income, it is critical for investors to fully understand the underlying credit quality of the bonds they are choosing to receive that higher yield."

The Retail-class N shares we list here require a $2,000 minimum investment in normal accounts or $500 in an IRA. You can invest in the lower-expense Institutional-class shares (DBLTX, 0.48% annual fees) with a $100,000 minimum investment in normal accounts, or a $5,000 minimum investment in an IRA.

Learn more about DLTNX at the DoubleLine provider site.

• Assets under management: $31.4 billion
• SEC yield: 1.6%
• Expenses: 1.14%

The BlackRock Strategic Income Opportunities Investor A (BASIX, $10.00) is an actively managed bond mutual fund that should complement core bond exposure to increase your risk-adjusted returns. Managers Rick Reider, Bob Miller and David Rogal have been with the fund for varying amounts of time, with Reider boasting the longest tenure in BASIX at roughly a decade.

This isn't your garden-variety bond fund. More than 15% of BASIX's assets are invested in "interest-rate derivatives" – hedges that institutional investors use against movements in interest rates. Another 16% is invested in emerging-market bonds, and the rest is split among debt such as junk bonds, Treasuries, collateralized loan obligations (CLOs) and more.

Performance is a mixed bag against the "Agg" bond index, though it's far less volatile than both the market and even the Nontraditional Bond category. But one thing weighing down its performance is high costs – not just a 1.14% expense ratio, but also a 4% maximum sales charge. But you can get around this if you have access to the Institutional shares (BSIIX), which have no sales charge and a 0.62% annual fee.

While an individual using a regular account would need to scrape together a whopping $2 million minimum initial investment, investors whose assets are managed by independent financial advisors might be able to access this share class for a far more reasonable minimum investment. You also might be able to access BSIIX via your 401(k) or other employer-sponsored retirement plan.

Learn more about BASIX at the BlackRock provider site.

Your financial adviser is someone you need to trust, and the foundation for that trust is knowledge. You need to know exactly who you’re working with, what standards they are held to and how they are making their money.

Even if you think your adviser is being upfront, don’t just trust them at their word. It’s imperative to learn as much as possible, because a lack of financial knowledge can result in mismanagement or even fraud.

Here are seven secrets your (or a potential) financial adviser may not tell you:

1. Many advisers are allowed to put their interests ahead of yours

While there are some financial advisers who operate under a “fiduciary” duty, which is to act in a client’s best interest before their own profits, many others still operate under a suitability standard, which limits their liability when giving advice to you (learn more by reading “7 Questions to Ask Before Hiring a Financial Adviser”).

According to a 2019 Financial Trust Survey, “Nearly half of Americans (48%) incorrectly believe all financial advisers have a legal obligation to act in clients’ best interests.” This is disturbing as many are assuming that their financial advisers are exercising the duties of: 1.) loyalty; 2.) good faith; and 3.) due care. “Loyalty” means putting a client’s best interests before their own; “good faith” is to act honestly; and “due care” is to employ skill.

The U.S. Department of Labor’s (DOL) Fiduciary Rule began to go into effect in June 2017, but before it could be fully implemented, a court ruling effectively killed it in 2018. The rule required banks, brokerage firms (e.g., Morgan Stanley, Merrill Lynch, Wells Fargo, Raymond James, LPL Financial, Edward Jones and many others) as well as insurance companies to act as fiduciaries with investment recommendations for retirement accounts, primarily aimed at IRA rollovers.

Unfortunately, even if this rule were in force today, it still would not include non-retirement or taxable accounts. So, the bottom line is, you can’t just assume your financial adviser is bound to act in your best interests.

2. You may be able to negotiate how much you’re charged in fees

Although not all advisers make their living by charging a fee for assets under management, it’s a common method. Such fees typically can range from 1% to 2% of your portfolio per year. That may not sound like a lot, but if you have $500,000 in your portfolio, you could be paying $5,000 to $10,000 every year.

Financial advisers can typically discount fees at least 33% or more from their firm’s fee schedule, but they will only offer this to some clients and not to others. Discounts typically apply to clients with several millions of dollars of assets under management (leverage). Those with under $1 million are charged a much higher fee.

What should consumers do? I recommend price/rate shopping – just like most of us already do with car insurance rates – to find out where they are and where they can be. After researching, I would revisit with the adviser and present the case and the possibility of changing firms if they’re unwilling to negotiate their fees.

3. I may be profiting in ways you don’t know about

Depending on your financial adviser’s firm, the fee discussion can be quite murky. For instance, with an investment adviser, compensation is solely derived on fees or a percentage of assets under management. However, if a financial adviser is also a broker with a Series 6 or Series 7 license, there are commissions, 12b-1 fees and revenue sharing agreements that could generate bonuses for a firm, based on how much volume was sold. This compensation can come through mutual funds, stocks, bonds and other types of investments.

All advisers are required to disclose these fees, revenue sharing agreements and commissions, but this conversation is usually skimmed over and not discussed in detail as it should. For most brokerage firms or banks, they have a “brochure,” but I doubt many clients even read it over. Also, the same revenue sharing agreement is online. (Google a brokerage firm, such as Morgan Stanley, Merrill Lynch, Wells Fargo, Raymond James, LPL Financial, Edward Jones or any other and add the words “Revenue Sharing” and it will show up.)

If your adviser is not disclosing these conflicts, there’s a chance mismanagement — or even fraud — can occur (learn more about the standards different types of financial advisers are held to by reading “5 Ways Financial Advisers Misrepresent Themselves”).

How can you protect yourself? See No. 7 below!

4. Using client testimonials to persuade you to become a client is against the law

According to Rule 206(4)-1(a)(1) in Section 206(4) of the Investment Advisers Act of 1940, any client testimonial constitutes a fraudulent, deceptive or manipulative act. For a financial adviser, this can include bringing their existing clients to meet with a prospective client, as well as social media posts that are meant to deceive or create a false sense of expertise.

In fact, social media has been the target of many deceptive financial advisers seeking professional athletes as clients. They might even make it obvious or purposely post pictures with supposed “clients” who haven’t even received a signing bonus or paycheck yet. For many years, I’ve observed this type of unethical behavior — especially with rookie athletes with a lack of financial education — and when I look at the adviser’s backgrounds there are typically complaints.

If you run across an adviser who uses this tactic, it’s best to steer clear.

5. When I switch firms, it may be a great deal for me, but not for you

Financial advisers are often heavily recruited to move to a rival investment firm with bonuses, higher payouts and even split revenue. In some instances, bonuses can account for several millions in total compensation. For example, a financial adviser moving from one brokerage firm to another can receive as much as four times (or 400%) of their annual compensation.

While this may be a great deal for your financial adviser, it will come at the cost of increased fees and commissions to you. FINRA’s “5 Questions to Ask When Your Broker Changes Firms” is a post everyone should read before signing any account transfer forms.

While your financial adviser will probably portray the move as a better opportunity to serve you, it may be the complete opposite. Ask your financial adviser to document the differences and have them sign an acknowledgement. Keep in mind that while everything may seem the same at first glance, there’s always more of an incentive for the financial adviser than there is for you.

6. I may have a checkered past

While many ethical financial advisers exist, there are several who have a dishonest past of customer disputes and other disclosures on their Form ADV. There are even cases where advisers are partners, with one having a clean background while the other is a total opposite. In one scenario, I witnessed a financial adviser with no complaints but the partner had multiple.

For disclosures, such as customer disputes and investigations, you’d expect a certain level of transparency from your financial adviser, but often it is not the case. Yes, advisers are required to give clients their Form ADV, but clients should definitely ask directly and also conduct their own research.

7. All advisers should sign a fiduciary pledge … but many won’t

While a financial adviser may claim to be working in your best interest — or operating as a “fiduciary” — consumers should make sure to get this fact documented and signed as it will significantly help with any potential complaints or lawsuits. Throughout the years, I’ve noticed many financial advisers are not willing to sign a pledge or flat out refuse, claiming it is due to their firm’s policy.

As always, while there are a lot of exceptional financial advisers, others will say one thing and do another. If you have a financial adviser who isn’t willing to sign a fiduciary pledge, then you’ll have to decide whether it’s worth the potential aggravation.

Remember, when someone cannot reciprocate your loyalty, it might be time to reconsider or even change to someone who is both legally and ethically obligated to put your best interests first at all times.

Here’s the verbiage of what a fiduciary pledge should look like and include:

Fiduciary Pledge

I, the undersigned, __________________________________, (“Financial Adviser”), pledge toalways put the best interests of __________________________________ (“Client or Clients”) first, no matter what.

As such, I will disclose in writing the following material facts and any conflicts of interest (actual and/or perceived) that may arise in our business relationship:

• All commissions, fees, loads and expenses, in advance that client will pay as a result of my advice and recommendations;
• All commissions I receive as a result of my advice and recommendations;
• The maximum fee discount allowed by my firm and the largest fee discount I give to other customers;
• The fee discount client is receiving;
• Any recruitment bonuses and other recruitment compensation I have or will receive from my firm;
• Fees I paid to others for the referral of client to me;
• Fees I have or will receive for referring client to any third parties; and
• Any other financial conflicts of interest that could reasonably compromise the impartiality of my advice and recommendations.

Financial Adviser: _____________________________ Date: ____________________

Client: ______________________________________ Date: ____________________

Client: ______________________________________ Date: ____________________

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.

When it comes to selecting a financial adviser, researching qualifications, credentials and registrations is something everyone should do. But why is it that you can’t always find the financial adviser you’re vetting on commonly known websites like FINRA and the SEC? While it might seem like a red flag — and occasionally it can be a red flag — usually the answer is a simple one.

I had a prospective client reach out to me recently with this very valid question and concern because they were searching for me on these websites and coming up empty. I realized in my response to this couple how confusing it must be for investors to navigate the various institutions that regulate financial advisers to verify financial professionals.

Here is why not all financial advisers are registered with the SEC and how you can still verify the credentials of financial advisers you’re considering hiring.

Who Regulates Financial Advisers?

The reasons it can be confusing to research registrations for financial professionals are twofold. First, financial professionals have multiple governing bodies, depending on what type of firm they work for — either a broker-dealer (FINRA) or a registered investment adviser (SEC or the state). Second, there is no official regulation in place over the use of the titles “financial adviser” or “investment adviser.” Because financial professionals use these titles liberally, it can make it even harder for individuals to find the appropriate background information.

Related content: Follow These 3 Steps When Selecting a Financial Advisor

If a financial professional is or works for a broker-dealer, they are regulated by the Financial Industry Regulatory Authority (FINRA). A broker-dealer is a person or firm that buys and sells securities. These individuals or firms operate as both a broker and a dealer, hence the name. Firms like Edward Jones, Morgan Stanley and Ameriprise are broker-dealers.

Broker-dealers are held to the suitability standard, which requires them to “reasonably believe that any recommendations made are suitable for clients, in terms of the client's financial needs, objectives and unique circumstances. A key distinction in terms of loyalty is also important, in that a broker's duty is to the broker-dealer he or she works for, not necessarily the client served.” Read more: Choosing A Financial Advisor: Suitability Vs. Fiduciary Standards

You can research broker-dealer professionals by visiting the FINRA BrokerCheck website: https://brokercheck.finra.org.

If a financial professional is or works for a registered investment adviser (RIA), they are regulated by either the SEC or state securities authorities. An RIA, as defined by The Investment Advisers Act of 1940 is a "person or firm that, for compensation, is engaged in the act of providing advice, making recommendations, issuing reports or furnishing analyses on securities, either directly or through publications." RIAs have a fiduciary duty to their clients, which means they have a legal obligation to provide suitable investment advice and always act in their clients' best interests, putting them before what’s best for themselves.

You can research RIAs and their professionals by visiting the SEC website: https://www.adviserinfo.sec.gov

What It Means If a Financial Adviser Isn’t Listed

As you are researching potential financial advisers for your wealth management and financial planning needs, you may try to look them up on these websites. If your search doesn’t yield a result, here are a few reasons why:

1. You are looking for them in the wrong place.

If you are trying to look up a financial adviser’s registration and coming up short, make sure you are looking in the right place. Maybe you are looking for a broker-dealer on the SEC’s website or an RIA on the FINRA website. Double-check which type of adviser you’re considering, and that will inform you which regulatory authority you need to check with. If you aren’t sure, ask the adviser!

2. You are using the wrong or incomplete information.

When you are researching a financial adviser, make sure all the information you’re plugging into the search query is accurate. Misspelling a name, location or CRD # can make it appear a financial professional isn’t listed, when, in fact, they are. Also, be on the lookout for nicknames or individuals who may go by their middle name.

3. They aren’t registered.

If you have searched in both places, have triple-checked the information you’re inputting, and still yielding no results, then it is quite possible the financial professional you are considering isn’t registered with either FINRA or the SEC or state. This is a red flag, and it means they may be using the title of financial or investment adviser without any authority or oversight to do so.

My firm, Lake Road Advisors LLC, is an RIA registered with the state of New York. You will find it listed on the Investment Adviser Public Disclosure website. In addition, because I used to work for a broker-dealer from 1999-2012. You can also find my history during that time at FINRA's BrokerCheck website. In the case of the prospective client who was trying to research me, they didn’t understand why I was no longer registered after 2012. The reason is because I was no longer employed at a broker-dealer. I moved to an RIA, which is under a different regulatory authority.

The Bottom Line for Investors

By not understanding and using the right tools to conduct this important research, it can cause unfounded skepticism and mistrust of a financial adviser’s qualifications.

That being said, it is always better to be safe than sorry. You can never be too thorough when it comes to your wealth and personal finances. Therefore, if you are considering a financial professional and you come up short on answers in your research, I hope all investors will do what my prospective clients did and ask the adviser directly. They should be able to demonstrate their registrations and qualifications quickly and easily. If a financial professional can’t, then listen to your instincts and move on.

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.

Some things never seem to grow old, including the love investors have for dividend stocks. There’s a good reason we love dividends. Between 1930 and 2012, they accounted for about 40% of the total return of Standard & Poor’s 500-stock index, according to a Morgan Stanley study. Here are our favorite dividend-stock mutual funds—two index funds and five actively managed portfolios. The list, with one exception (Vanguard High Dividend Yield Index Fund), is made up of funds that invest in so-called “dividend growers”—companies that consistently raise their payouts. All of the funds have one thing in common: They have been less volatile than the S&P 500 over the past one, three, five and 10 years.

All returns and data are through February 1. Click on ticker-symbol links for current prices and more.

• Symbol: AMFFX
• Expense ratio: 0.67%
• Total assets: $41.8 billion
• 1-year return: 19.1%
• 3-year return: 9.3%
• 5-year return: 11.9%
• 10-year return: 6.6%
• Yield: 2.1%

We haven’t recommended American funds much in the past, in part because they were only available through advisers. Not anymore. Now Capital Group, which sponsors and manages the American Funds portfolios, offers a share class with no sales charge or transaction fee for each of its funds at certain brokerage firms. You can buy the F1 shares of American Mutual at Fidelity, Schwab and Scottrade with a super-low minimum initial investment of $250 ($25 if you opt for monthly automatic deposits). That and the fund’s low expense ratio, are part of this fund’s draw.

But the best thing about American Mutual is its ability to hold steady in rocky markets. Since its 1950 inception, American Mutual has outperformed the S&P 500 in all 14 market declines of 15% of more, says Morningstar analyst Alec Lucas. Losing less has helped over time. The fund’s long-term returns have been above average, and its risk has been well below average. Its 15-year record, a total return of 7.2% annualized, outpaces the S&P 500 by a smidge , and the fund was 18% less volatile over that time.

American Mutual invests in attractively priced stocks of industry leaders that pay steady dividends. It has some leeway to hold preferred stocks, convertible bonds, U.S. government bonds and investment-grade corporate debt, too. About 90% of the fund’s assets are invested in stocks, plus 2% in bonds and the remainder in cash. Its top three holdings are Verizon Communications, Texas Instruments and Amgen.

• Symbol: WSHFX
• Expense ratio: 0.66%
• Total assets: $86.9 billion
• 1-year return: 19.7%
• 3-year return: 9.6%
• 5-year return: 12.8%
• 10-year return: 6.4%
• Yield: 1.9%

Washington Mutual managers must follow a strict set of rules for the kinds of stocks the fund owns. But those guidelines, which target characteristics that are common among blue-chip stocks, make this fund a good fit for conservative investors looking for dividend stocks. One rule, for example, requires a company to have paid a dividend in eight of the previous 10 years. (Up to 5% of the fund’s assets can be in non-dividend payers, but they must pass even stricter requirements.)

Over time, the unique stock-picking strategy has delivered above-average returns with below-average risk. The fund’s 10-year annualized return, 6.4%, doesn’t beat the S&P 500, but it’s better than 77% of similar funds that invest in bargain-priced, large-company stocks. And the ride was 13% less bumpy than that of its peers.

Don’t let the fund’s size worry you. American Funds and its sponsor, Capital Group, employ a multiple-manager approach that cuts unwieldy funds down to size. Washington Mutual has eight managers, with each one running part of the fund separately from the others.

• Symbol: BUFDX
• Expense ratio: 0.98%
• Total assets: $52 million
• 1-year return: 20.4%
• 3-year return: 12.3%
• 5-year return: --
• 10-year return: --
• Yield: 1.5%

Buffalo Dividend Focus launched in 2012, which makes it the youngest fund among our picks. But we’re drawn to its nimble size: It has just $52 million in assets. And so far, managers Paul Dlugosch and Scott Moore have performed well. The fund’s three-year record beats the S&P 500 by an average of 1.4 percentage points per year.

Dlugosch and Moore focus on generating income by investing mostly in dividend-paying stocks that have a history of increasing those payments. They start with stocks with a market value of $1 billion—the fund can invest in companies of any size but favors large firms—and a minimum yield of 2.0%. The managers then zero in on bargain-priced companies that are leaders in their industry and that generate enough cash to support and raise dividends over time. Apple, for instance, is its top holding.

• Symbol: PRDGX
• Expense ratio: 0.64%
• Total assets: $6.9 billion
• 1-year return: 18.0%
• 3-year return: 10.4%
• 5-year return: 13.1%
• 10-year return: 7.2%
• Yield: 1.5%

Manager Tom Huber calls Dividend Growth an “all weather” fund. Since he took over the fund in 2000, he has seen a few stormy periods. Throughout the aughts, for instance, the S&P 500 lost an annualized 1.0%; Dividend Growth, a Kiplinger 25 member, gained 2.8%. In 2008, the fund’s 33.3% loss was 3.7 percentage points better than the S&P 500 and beat 85% of similar funds. In good times, the fund has lagged the benchmark, but only by a little. Over the years, providing ballast in bad times—and largely keeping up in good times—has made for a good overall record. Since Huber stepped in as manager in March 2000, Dividend Growth has returned 6.8% annualized, ahead of the 4.5% return in the S&P 500.

• Huber focuses on large, sturdy firms that throw off lots of cash and thus have the capacity to consistently raise their dividends. “If companies are raising dividends, that means earnings and cash are growing, too,” says Huber. “These kinds of companies tend to be durable.” Top holdings are JPMorgan Chase, Microsoft and UnitedHealth Group.

• Symbol: VEIPX
• Expense ratio: 0.26%
• Total assets: $25.4 billion
• 1-year return: 19.0%
• 3-year return: 10.3%
• 5-year return: 13.1%
• 10-year return: 7.2%
• Yield: 2.8%

We recently added Vanguard Equity-Income to the Kiplinger 25. It is run by two outfits. Wellington Management’s Michael Reckmeyer manages two-thirds of the fund’s assets; Jim Stetler and Michael Roach of Vanguard’s in-house quantitative group, which uses computer models to pick stocks, run the remainder.

Both firms focus on generating income and share-price gains by investing in large, high-quality companies with above-average yields. But the managers go about picking stocks in different ways. Reckmeyer favors large firms with superior growth prospects and an ability to boost the dividend over time. And he likes to buy when stocks are out of favor or trading at low prices. Stetler and Roach employ computers to home in on companies with strong balance sheets, consistent earnings growth and managers who make shareholder-oriented decisions (such as raising dividends), among other factors.

The two teams have been working together for almost a decade (since August 2007). Since then, the fund has returned 7.8% annualized, which beats the 7.5% return of the S&P 500.

• Symbol: VDAIX
• Expense ratio: 0.19%
• Total assets: $22.6 billion
• 1-year return: 15.9%
• 3-year return: 8.7%
• 5-year return: 11.1%
• 10-year return: 6.7%
• Yield: 2.1%

There is no scarcity of choices when it comes to dividend-oriented index funds. But we favor Vanguard Dividend Appreciation because it focuses on companies that regularly boost their dividends.

The fund tracks the Nasdaq US Dividend Achievers index, but eligible stocks include any U.S. security listed on Nasdaq or the New York Stock Exchange. The main qualification is that a company must have increased payouts for at least 10 of the past consecutive years. Limited partnerships, real estate investment trusts and financially troubled firms are excluded. Currently, 186 stocks make the mark (other proprietary screens help to winnow the list). The securities are weighted by market value; the bigger the company in market capitalization (share price multiplied by shares outstanding), the bigger its position in the fund. The fund is recalibrated once a year in keeping with the index. Its top three holdings are Microsoft, Johnson & Johnson and PepsiCo.

• Symbol: VHDYX
• Expense ratio: 0.16%
• Total assets: $17.1 billion
• 1-year return: 20.0%
• 3-year return: 11.3%
• 5-year return: 13.6%
• 10-year return: 6.9%
• Yield: 3.0%

In general, we prefer companies that consistently raise dividends to firms that simply pay a high dividend yield. But Vanguard High Dividend Yield doesn’t sacrifice quality for yield. The index that the fund tracks focuses on projected dividends, and firms with no payout expected over the next 12 months don’t make the cut. While the index’s construction methodology starts with companies of all sizes, in the end it is made up mostly of large, established firms. Holdings in the fund have an average market value of $83 billion. All told, the fund holds more than 400 stocks that have been screened for yield and then weighted in the fund by market value.

• Over the long haul, the fund has delivered more return for the risk than its typical peer (funds that invest in large companies with growth and value characteristics). Its 10-year annualized return outpaces 89% of its peers.

A growing number of brokerage firms are encouraging customers to take out loans to cover taxes, vacations, luxury goods or other expenses, using the securities in their brokerage accounts as collateral. The pitch: Customers get quick and easy access to credit at competitive interest rates, allowing them to meet expenses without selling off investments and potentially incurring taxable gains.

These "non-purpose" loans are distinct from margin, another form of securities-based lending. Traditional margin loans are generally used to buy securities, whereas non-purpose loans can be used for any other purpose -- even, as Morgan Stanley's Web site puts it, for "a 1963 Ferrari GTO, just because."

But as more firms offer these loans, the arrangements are drawing scrutiny from regulators. Compared with traditional bank loans, non-purpose loans generally are easier to obtain, and "that's what makes them attractive in some ways," says Susan Axelrod, executive vice-president of regulatory operations at the Financial Industry Regulatory Authority. But they also come with significant risks, and customers "should think carefully before taking one out," she says.

Brokerage firms are pushing non-purpose loans as they seek to become less reliant on trading commissions and develop more predictable sources of revenue, such as interest income. Combine that trend with the strong markets that have given many customers high portfolio values -- and therefore high collateral value -- and "it's a perfect storm" for non-purpose loans, says Paul Meyer, principal at Securities Litigation & Consulting Group, which provides research and expert testimony in securities cases.

At first glance, brokerage customers may find non-purpose loans appealing. The amount of credit you're offered is based largely on the value of the securities you're using as collateral, rather than on scrutiny of your credit rating or debt levels. That means there's relatively little documentation required and customers may be able to get the cash within a couple of days. Borrowers are often charged a variable interest rate that's based on the 30-day London Inter-Bank Offered Rate (Libor). Typical rates are about 2 to 5 percentage points above Libor, depending on the amount the customer is qualified to borrow -- or roughly 2.2% to 5.2%.

Watch Out for the Pitfalls

Unlike with traditional loans, borrowers repay the loans when they wish -- but meanwhile, interest charges are adding up. "If you're not getting a bill every month, you tend to just let it sit," Meyer says. "And that can be a very pernicious problem after a while."

Even bigger problems arise if there's a market plunge and the value of securities you've pledged as collateral drops below the minimum threshold set by the brokerage firm. You may be required to promptly pay down your loan or deposit additional collateral. The firm also has the right to sell off some of your securities without notifying you, potentially triggering big capital-gains taxes.

Firms offering the loans say they review a number of factors to make sure they're suitable for clients. At Morgan Stanley, for example, advisers and their clients "assess the clients' investment goals and financial situation, including whether the proposed increase in the client's debt is consistent with the client's risk tolerance and time horizon," the firm said in an e-mail.

Still, customers should consider brokers' potential conflicts of interest before taking a non-purpose loan. If you take the loan instead of selling off some of your securities to cover your cash needs, the firm continues earning any asset-based management fees you pay on that money. The broker can also earn a commission, often based on a percentage of your loan balance.

The best alternative for customers: Simply sell securities to meet your expenses, Meyer says. As investors near retirement, "they should be gradually eliminating debt," he says. A non-purpose loan is just "one more expense to carry in retirement."

What stock market sector provides good yield, relative stability and potential for modest growth? The old dividend standby: telecommunications.

Yields of telecom stocks have become even more attractive lately as speculation grows that the Federal Reserve will delay raising short-term interest rates because of the tepid global economy. The average large-company U.S. telecom stock yields 4.9%, compared with 2.2% for 10-year Treasury bonds and near zero for cash-type investments, such as money market funds.

Of course, nothing is free on Wall Street. In a note published October 1, Morgan Stanley said it was cautious about the telecom sector because of increased competition among wireless and broadband services, among other reasons. So if you want reliable income, stick with telecoms that can increase revenues or generate enough cash to sustain the dividend. Look overseas, too, where industry consolidation and expansion into emerging markets is driving growth for some companies, despite economic woes. These eight stocks, listed in alphabetical order, meet that criteria and have attractive yields, to boot.

All prices, yields and returns are as of October 23.

• Headquarters: DallasShare price: $33.66Market capitalization: $174.6 billionDividend yield: 5.4%One-year return: 0.6%

If you’ve shopped for a mobile phone lately, you may have opted for one of the wireless carriers’ new no-contract plans. With these offerings, you pay the full cost of your phone (usually in monthly installments) but are charged a lower monthly service fee. The plans have been growing in number and are eating into revenues of wireless providers such as AT&T (T). The phone giant is trying to make up for the lower-price service plans with volume. Excluding prepaid customers, the telecom added 785,000 wireless subscribers during the third quarter, more than double the number added during the same quarter a year earlier. The amount of churn (or customers who drop their service) also declined, from 1.07% to 0.99% year-over-year.

The transition to no-contract plans has not been completely smooth. During the third quarter, AT&T lowered its revenue projection for the year from 5% to as little as 3%, citing fewer-than-expected phone upgrades (customers are holding onto their phones when they sign up). But AT&T expects to profit from future upgrades. Meanwhile, if the proposed acquisition of satellite-TV provider DirecTV wins regulatory approval this year, AT&T could expand its reach. For example, the company would be able to add high-speed Internet services to another 15 million U.S. customer locations and offer bundled packages that include pay-TV to 115 million locations.

• Headquarters: MontrealShare price: $42.98Market capitalization: $33.4 billionDividend yield: 5.2%One-year return: 3.3%

BCE (BCE), Canada’s largest telecom company, continues to grow. In the second quarter, the number of Internet, TV and wireless subscribers increased by 3.7% from the same period in 2013. More customers could sign on as the company builds out its 4G LTE network and high-speed fiber-optic cables for Internet and TV. BCE is also on track to buy its remaining stake in regional phone company Bell Aliant for about $4 billion by the end of October. That should boost free cash flow (the amount of cash profits left after necessary capital expenditures>) and support payouts to shareholders. BCE raised its dividend 6% this year, and analysts at RBC Capital Markets see a similar boost in 2015.

Note: With non-U.S. stocks, you have to consider foreign withholding taxes on the dividend. To minimize the bite, you should usually keep foreign stocks in a taxable account. That way, you can claim a credit against the long-term capital gains and other investment taxes you’ll owe Uncle Sam for the same dividend, which can be as high as 23.8%. Canada, however, is an exception. It withholds nothing if you own the stock in a tax-advantaged account, such as an IRA. Otherwise, Canada withholds 15% for U.S. investors.

• Headquarters: Monroe, La.Share price: $39.94Market capitalization: $22.8 billionDividend yield: 5.4%One-year return: 26.1%

Shares of CenturyLink (CTL), which serves mostly rural areas in the U.S., have soared over the past year. Growing demand by businesses for CenturyLink’s data-storage and broadband services is one of the main reasons. Revenues in the company’s business segment expanded 2.6% during the second quarter year-over-year. The landline phone business continues to wane, but some of those losses are being offset by expansion into new services, such as fiber-optic TV. CenturyLink cut its dividend by 26% last year to free up cash for $2 billion worth of stock repurchases. A dividend cut is never welcome, but the current payout—an annual rate of $2.16 per share—appears to be sustainable, according to S&P Capital IQ.

• Headquarters: ParisShare price: $14.42Market capitalization: $37.9 billionDividend yield: 3.8%One-year return: 12.1%

Price wars have dragged down revenues of Orange (ORAN), one of France’s largest telecoms. But after nearly three years of cuts, analysts believe phone bills can’t go much lower. Orange has offset the decline somewhat by attracting new customers in France, as well as in such major markets as Poland, Spain, Africa and the Middle East. During the third quarter, the number of subscribers increased by 3% year-over-year. And in September, Orange made a bid to acquire Jazztel, a Spanish telecom. If the deal goes through, Orange would gain 1.5 million broadband customers in Spain and the opportunity to sell coveted “quadruple-play” packages of wireless, TV, Internet and landline phone services. The stock trades at just 10 times estimated 2015 earnings, making it a bargain. Says Morningstar analyst Allan Nichols: “It is one of the cheapest [telecoms] relative to the company’s fair value,” which he pegs at $18 per share. The French dividend withholding tax for U.S. investors is 15%.

• Headquarters: TorontoShare price: $38.10Market capitalization: $19.6 billionDividend yield: 4.3%One-year return: -12.4%

Another Canadian telecom, Rogers (RCI) has come under pressure recently as competitors such as BCE expand into the pay-TV business. Rogers may be rounding the corner, though. Average revenue per wireless subscriber (excluding prepaid customers) in the third quarter declined 0.7% from the same period a year earlier, compared with a year-over-year decrease of 1.4% in the second quarter. Revenue growth could turn positive by the fourth quarter, according to a report by RBC Capital Markets. Meanwhile, Rogers, Canada’s largest wireless carrier, uses less than 60% of its earnings to pay the dividend, which it boosted by 5% this year.

• Headquarters: Fornebu, NorwayShare price: $64.11Market capitalization: $32.1 billionDividend yield: 4.6%One-year return: -12.1%

Although the Norwegian government owns roughly half of the company, Telenor (TELNY) is a global enterprise. Based just outside Oslo, the telecom operates in more than a dozen countries, many of which are experiencing rapid growth in their wireless businesses. In Norway, which makes up nearly one-fourth of Telenor’s sales, average revenue per mobile subscriber rose 4% during the first half of the year compared with the same period in 2013. Telenor has also made a big push into developing Asian economies and now earns 45% of its revenues from countries such as India, Malaysia and Pakistan, where wireless adoption is still on the upswing. True, geopolitical troubles can make operating in some of those regions risky. “But it’s amazing how well the business is doing, regardless,” Nichols says. Telenor’s total second-quarter revenues climbed 4% from the second quarter of 2013. The company eliminated its payout in 2009 to help fund its expansion into India, but it resumed disbursements in 2010 and has since raised the dividend regularly, this year by 17%. Norway’s tax withholding on dividends for U.S. investors is 15%.

• Headquarters: New York CityShare price: $48.22Market capitalization: $200.2 billionDividend yield: 4.5%One-year return: -0.9%

There’s a lot to like about Verizon (VZ), despite intense competition. Verizon maintains the leading 4G LTE network in the U.S., in terms of capacity and coverage. The quality of its network has helped retain customers. During the third quarter, Verizon’s churn among wireless subscribers (excluding prepaid customers) was 1%, up only 0.03 percentage point from a year ago. Verizon hasn’t been able to avoid cutting prices, but overall revenues in the third quarter still increased 4.3% from the year-earlier period, thanks in part to growing demand for data and customers adding additional devices, such as tablets.

Revenues may grow at a slower rate in the immediate future as wireless carriers continue to duke it out over pricing, says a UBS research note. But Verizon uses only about half of its earnings to pay its dividend, which it raised by 3.8% in September. And after buying out Vodafone’s 45% stake in Verizon Wireless earlier this year, Verizon Communications is now the sole owner of the wireless unit and can claim all of its free cash flow. That should enable the company to keep increasing its dividend, which it has done for seven consecutive years.

• Headquarters: Newbury, EnglandShare price: $31.43Market capitalization: $83.3 billionDividend yield: 7.9%One-year return: -17.1%

Speaking of Vodafone (VOD), it walked away with a cool $130 billion when it completed the sale of its shares of Verizon Wireless to Verizon Communications in February. “It got a huge price,” Nichols says. The deal allowed the firm, which operates in nearly 30 countries and claims more than 430 million customers, to invest in new assets. This summer, for example, it completed the purchase of Spanish cable operator Ono for 7.2 billion euros (about $9.1 billion at the current exchange rate), giving Vodafone the opportunity to sell bundled Internet, phone, TV and wireless packages to 1.9 million new Spanish customers.

Competitive pricing and slow economic growth in Europe have helped keep a lid on revenues and pushed down the stock. But the company is expanding into faster-growing emerging markets. In India, for example, Vodafone now serves 22% of the mobile market. Meanwhile, patient investors get a big yield, and this year the company hiked the dividend by 8%. The United Kingdom does not impose a withholding tax on dividends.