PayPal Holdings (PYPL) stock is sinking Tuesday despite the payments company beating top- and bottom-line expectations for its fourth quarter and issuing a better-than-expected first-quarter and full-year outlook.

In the three months ending December 31, PayPal's revenue increased 4.2% year over year to $8.4 billion. Earnings per share (EPS) rose 4.4% from the year-ago period to $1.19.

"We set out at the beginning of 2024 to narrow our focus, improve execution, and reposition the business," said CEO Alex Chriss in a statement. "One year later, I'm proud that we've laid a strong foundation for long-term, profitable growth across the company's most important areas." Chriss cited improvements to branded checkout, peer-to-peer and Venmo as well as progress on the company's price-to-value strategy.

The results topped analysts' expectations. Wall Street was anticipating revenue of $8.3 billion and earnings of $1.12 per share, according to CNBC.

PayPal's total payment volume increased 6.8% to $437.8 billion in the quarter, driven by active accounts increasing 2.1% to 434 million and payment transactions per active account increasing 3% to 60.6 on a trailing-12-month basis.

For the first quarter, PayPal said it expects to achieve earnings in the range of $1.15 to $1.17 per share, ahead of analysts' expectations for earnings of $1.13 per share. For the full year, it expects earnings of $4.95 to $5.10 per share, also ahead of Wall Street's forecast for earnings of $4.90 per share.

"The strong momentum we've created sets us up well for 2025, which is about scaling adoption," Chriss said.

Is PayPal stock a buy, sell or hold?

During the 12 months leading up to its earnings announcement the large-cap stock outperformed the S&P 500, rising 43.4% vs 22.5% for the index. And Wall Street remains bullish on the payments stock.

According to S&P Global Market Intelligence, the average analyst target price for PYPL stock is $96.25, representing upside of more than 17% from current levels. And the consensus recommendation is Buy.

Financial services firm Mizuho has an Outperform rating (equivalent to a Buy) and $100 price target on the financial stock.

"Expectations likely ran ahead of themselves," said Mizuho analyst Dan Dolev in response to the market's initial reaction to PayPal's earnings report. "We are not concerned," Dolev added, noting that PayPal’s "branded button has been consistently growing in line with its major merchant partners."

In a recent research note, Dolev said his analysis "shows that PYPL is growing in line with/faster than the weighted-average, share-adjusted growth of its major partners."

The analyst noted that stability in its branded segment as well as new initiatives including PayPal Everywhere, gradual migration of merchants to an updated checkout experience and Fastlane "makes the stock an attractive candidate for further re-rating in 2025."

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PayPal Holdings (PYPL) stock is spiraling Tuesday after the payments giant reported mixed results for its third quarter and raised its full-year profit forecast.

In the three months ended September 30, PayPal's net revenue increased 5.8% year over year to $7.8 billion, driven in part by a 5.7% jump in payment transactions to 6.6 billion. Meanwhile, its earnings per share (EPS) were up 22.5% from the year-ago period to $1.20.

"PayPal delivered strong financial and operating results during a highly productive third quarter," said CEO Alex Chriss in a statement. "We are making solid progress in our transformation as we bring new innovations to market, forge important partnerships with leading commerce players, and drive awareness and engagement through new marketing campaigns."

The company's top and bottom-line results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $7.9 billion and earnings of $1.07 per share, according to Yahoo Finance.

PayPal's total payment volume increased 9% year-over-year to $422.6 billion in the quarter, driven by active accounts increasing 0.9% to 432 million and payment transactions per active account rising 8.5% to 61.4.

For the fourth quarter, PayPal said it anticipates low single-digit revenue growth and a low to mid-single digit decrease in earnings. And for the full year, it now anticipates earnings growth in the high teens, up from its previous forecast of low to mid-teens growth.

"We are raising our full year non-GAAP guidance and are pleased with the strength we are seeing across the business," Chriss said. "We've built a solid foundation in this last year that will serve us in the years to come."

Is PayPal stock a buy, sell or hold?

Heading into Tuesday's session, PayPal was up 36% for the year to date, easily beating the S&P 500's 23.5% total return (price change plus dividends). And most of Wall Street thinks the financial stock has more room to run.

According to S&P Global Market Intelligence, the average analyst target price for PYPL stock is $85.58, representing implied upside of roughly 10% to current levels. Additionally, the consensus recommendation is Buy.

But not everyone is all-in on the large-cap stock. Financial services firm Morgan Stanley has an Equal Weight rating (equivalent to a Hold) on PYPL with a $71 price target.

"PayPal's massive online acceptance lead and industry-low attrition can support growth that's in line with overall e-commerce," wrote Morgan Stanley analyst James Faucette in an October 24 note. "Improvements in operational efficiency along with ongoing share repurchases can also support low-teens EPS growth."

However, Faucette expresses concerns over PayPal's strategic direction, citing slow progress in improving Branded Checkout, doubts about Venmo's monetization potential among Gen Z and Gen Y shoppers, and uncertainty about the company's investment priorities and ability to execute key strategies.

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PayPal Holdings (PYPL) stock jumped out of the gate Tuesday after the payments giant beat top- and bottom-line expectations for its second quarter, raised its full-year outlook and increased its share repurchase forecast.

In the three months ended June 30, PayPal's revenue increased 8.2% year-over-year to $7.9 billion, driven in part by a nearly 11% rise in total payment volume to $416.8 billion. The company also said earnings per share (EPS) were up 36.8% from the year-ago period to $1.19.

"PayPal delivered a strong second quarter and first half, and I'm confident we're on the right track," said PayPal CEO Alex Chriss in a statement. "We delivered our best transaction margin dollar growth since 2021, and we are making steady progress on our strategic transformation, while investing in innovation and operating more efficiently."

The results beat analysts' expectations. Wall Street was anticipating revenue of $7.8 billion and earnings of 99 cents per share, according to Yahoo Finance.

"Given the strength of our business, we are raising our 2024 guidance and increasing share repurchases," Chriss said.

PayPal now anticipates EPS growth in the low to mid-teens percentage, up from its previous forecast of mid- to high-single digit growth. It also now expects to buy back roughly $6 billion of its own shares, up from its prior forecast of at least $5 billion. Stock buybacks can boost value for shareholders.

PayPal also provided its third-quarter guidance, projecting mid-single-digit revenue growth and high single-digit earnings per share growth.

"We are operating from a position of strength, delivering for our customers, and focusing on long-term profitable growth," Chriss added.

Is PayPal stock a buy, sell or hold?

PayPal is lagging the broader market on the price charts this year, up 5% vs the S&P 500's more than 14% return. Yet Wall Street remains bullish on the financial stock. 

According to S&P Global Market Intelligence, the average analyst target price for PYPL stock is $76.92, representing an upside of roughly 20% to current levels. Additionally, the consensus recommendation is Buy. 

Financial services firm Susquehanna Financial Group recently upgraded PayPal to Positive (equivalent to a Buy) from Neutral (equivalent to a Hold).

"Our conversations with the company, which when coupled with customer and industry observations, seem more constructive," said Susquehanna analyst James Friedman in a July 2 note. "Profitable growth is now a top priority for PayPal, enshrined in a recent update to the company's 2024 Annual Incentive Plan."

Friedman has a $71 price target on PayPal, which is 11% above where the stock is currently trading.

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Online shopping sites like Etsy, and eBay, and payment network PayPal, among other companies want Congress to change the new $600 reporting threshold for IRS Form 1099-K. The rule, which won't apply for 2023 due to a recent delay from the IRS, affects millions of people who sell on sites like Etsy and Poshmark and get paid through third-party networks like PayPal, Square, and CashApp.

Previously, to receive a 1099-K, you had to have at least 200 third-party payment network transactions totaling more than $20,000 in gross payments. However, due to a tax law change, a single transaction on a payment network of just $600 could trigger a 1099-K. Some people call this the “600 rule.” The IRS delayed the rule Implementation last year, but that change and the most recent 1099-K delay for the 2023 tax year continue to cause confusion. 

The Coalition for 1099-K Fairness (a group of online marketplaces that oppose the new rule) has urged Congress to get involved. The goal is to have bipartisan legislation that raises the 1099-K threshold, giving relief to “casual sellers.” That includes millions of people who are paid smaller amounts through third-party networks and haven’t received 1099-K forms in the past.

More: IRS Form 1099-K: When You Might Get One From Venmo, PayPal, or Cash App

Is the IRS unfairly targeting casual sellers? 

PayPal, eBay, and Etsy are among several members of the 1099-K Fairness Coalition that want Congress to ensure that casual online sellers aren’t burdened with the IRS 1099-K form. The organization cites a national survey of sellers where: 

• 70% of respondents said they would be deterred from selling online because of the $600 IRS 1099-K reporting requirement. 
• 85% percent of those surveyed didn’t think that the IRS should be “targeting people who only occasionally sell online,” according to the survey.

Members of the Coalition for 1099-K Fairness include Aribnb, Bikelist, eBay, Eventbrite, Block, Inc. (for Square and CashApp), ETA, Etsy, Goldin, Kidizen, Mercari, Noihsaf Bazaar, OfferUp, PayPal, Poshmark, Inc., Reverb, Rover, Sports Fan Coalition, StubHub, TechNet, and Tradesy

According to the Coalition, many transactions casual sellers have “involve the sale of used goods that do not create any tax liability.” (Some of those goods are often sold for less than what the seller initially paid). The organization says on its website that a $600 1099-K threshold would disproportionately burden some taxpayers, who could be at risk of over-reporting their income or “forced to hire a tax professional” to ensure compliance with the reporting requirement.

The Coalition also points out that economic hardship is another factor for nearly 40% of online sellers. The majority (close to 75%) said they sell online to help pay for necessary personal expenses. 

1099-K: What could Congress do? 

The Coalition for 1099-K Fairness wants Congress to pass legislation that would increase the 1099-K reporting threshold. If Congress doesn’t act, the organization says millions of people with relatively small online businesses will receive 1099-Ks for the 2023 tax year. The coalition contends that could cause significant confusion and administrative challenges–not only for networks and sellers but also for the IRS.

In Congress, the Saving Gig Economy Taxpayers Act was reintroduced in the U.S. House of Representatives with bipartisan sponsorship. 

• The legislation would repeal the IRS 1099-K $600 rule and restore the previous $20,000/200 transaction threshold. 
• It’s unclear right now what will happen with the legislation, which is similar to proposals circulated in Congress in the past but failed to gain enough support to pass.

For now? The IRS in November, announced that the $600 1099-K reporting rule won't apply for the 2023 tax year. But remember that the IRS expects you to report all taxable income on your federal return, whether you receive a 1099-K or not. 

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IRS Form 1099-K gets a lot of attention each tax season.

That’s partly because the 1099-K form reports certain payments from payment cards and third-party network transactions. Millions of people use third-party networks (think Venmo, PayPal, Cash App, Stripe, etc.) for business and personal transactions.

However, the 1099-K received attention even before the current tax season because of a new $600 reporting threshold for the form delayed several times by the IRS.

So, it’s important to know what the 1099-K form is and what to do when you do (or don’t) receive one.

What a 1099-K form is used for 

An IRS 1099-K form is an IRS information reporting form.

Payment networks and other providers use the form to report certain transactions from payment cards and through various payment networks.

Third-party payment networks can include a range of providers you’re likely familiar with like Venmo, PayPal, Stripe, and CashApp. If you sell on Etsy, eBay, Depop, or other similar sites, you probably process payments through third-party networks.

1099-K threshold: What is 1099-K income? 

Payment networks are not required to report all transactions on 1099-K forms. There is a reporting threshold that triggers the issuance of a 1099-K.

For your 2025 tax return, the threshold is more than $20,000 in gross payments and more than 200 transactions. That's a change from last year, when more than $5,000 in payments for goods and services through a payment network meant you would likely receive a 1099-K form from that payment network.

• However, it's important to note that the 1099-K is supposed to report transactions for goods and services.
• Personal transactions (e.g., sending money to friends or family not in exchange for goods or services) should not be reported on the 1099-K form.

Is a 1099-K required for $600? 

This marks a return to a higher threshold for the 1099-K, which many will welcome over the previously known $600 rule. That lower threshold caused a lot of confusion, meaning that, for a couple of tax seasons, more people who had never received a 1099-K could receive one.

Under the old rule, if you sold a piece of furniture on eBay for $650 and were paid through a third-party payment network, and that was your only such transaction, you were supposed to receive a 1099-K. A few years ago, that $650 sale would have been far too small to trigger the IRS reporting form.

Now, due to changes in the 2025 GOP tax bill, most casual online sellers won't have to worry about receiving a 1099-K form.

What’s the difference between 1099-NEC and 1099-K?

The IRS 1099-NEC form is used instead of the 1099-MISC. (The form is used by businesses to report non-employee compensation.)

So generally, when you’re self-employed, businesses typically issue a 1099-NEC when you receive a certain amount of money from them.

The threshold for the 1099-NEC reporting form is at least $600. (That threshold is similar to the new, 2023 1099-K threshold. But, the 1099-K focuses on payments received through transactions on payment cards and through third-party payment networks.)

Money reported on a 1099-NEC could be received in various forms including, for example, rents, prizes, and awards.

But similar to the 1099-K, even if you don’t receive a 1099-NEC when you know you received taxable income from a business, you must report that income on your federal return. If you’re unsure how to report self-employment income, consult a professional before you file.

How does a 1099-K affect your taxes?

Whether you receive a 1099-K or not, the IRS expects you to report your taxable income.

Third-party payment networks you had transactions with that trigger the reporting threshold, will send a copy of the form to you and the IRS.

So, when you receive a 1099-K, you should keep it with your tax documents and make sure that the information on the form matches your records.

• Double-check that the income and other information on the form is accurate. If the 1099-K doesn’t belong to you, has an incorrect taxpayer identification number, or has incorrect payment transactions or amounts, contact the payment network that sent you the form.
• Their information should appear on the lower left of the 1099-K.
• They may be able to correct the form. If they send you a corrected version, keep that with any other correspondence from the network, in your files. 

Keeping good records and documentation is the best way to support any deductions claimed and income reported on your federal tax return.

Your claimed tax deductions and credits, and income, taken together, will ultimately determine how much tax you pay overall and whether you receive a tax refund.

Consumer scams are getting more and more creative with every year that goes by. The Federal Trade Commission (FTC) reported that consumers lost more than $5.8 billion to fraudsters in 2021, an increase of more than 70 percent over the previous year. And the data for 2022 is expected to be even higher when it's released, as criminals experiment with more intricate and inventive scams.

One of the latest technology-aided gambits involves scammers contacting you pretending to be your bank, in order to steal sensitive data and take over your accounts. So how do these scams work, and how can you protect yourself? 

Bank spoof scams: How they work

The Detroit Free Press reports on a recent surge in scammers targeting checking accounts and bank accounts, particularly during the recent holiday shopping rush. The latest trend is to impersonate or “spoof” bank fraud departments. 

Scammers and criminal gangs reach out to potential victims via fake text messages, phishing emails, or telephone calls — both live and pre-recorded. Once they’ve successfully impersonated the victim’s bank, scammers hope to confuse their mark into believing fictional stories about crooks hacking into their bank accounts. 

The scammer tries to convince the victim to reveal personal information or to click on fraudulent links to help “stop the crooks” when, of course, the scammer’s real goal is to take over their bank account themselves. 

Scammers use these fake, urgent warnings to panic you into acting before you have time to think, according to the FTC. This “fight or flight” feeling is what helps scammers achieve their goals — and it usually succeeds unless potential victims understand how to protect themselves. 

Related payment scams

The American Bankers Association reports that scammers also attempt intricate phishing attempts to trick consumers into using person-to-person payment apps to transfer money to the crooks, under the guise of a legitimate business or someone you trust. Criminal gangs usually already have some of their intended victim's personal details, often gained through a data breach, which they use to make the scam harder to detect. 

PayPal, Venmo, CashApp and Zelle are the preferred money-transfer apps for scammers. According to the Consumer Financial Protection Bureau (CFPB), consumers lost $130 million in 2021 by mistakenly sending money to scammers via these payment apps or similar services.

How to protect yourself

To guard against these types of scams, follow a few cardinal rules from the CFPB: 

• Never trust Caller ID, especially when they ask for private information. Banks will never call and ask you for that info over the phone, to avoid this exact scenario.
• Worried that a call or message is fake? Don't use the number provided. Instead, reach out to your bank or credit card company via their mobile app or via their official phone number, which is usually located on bank statements and on the back of your credit or debit card.
• Never share passwords or numbers for Social Security, credit cards, or bank accounts.
• Never send money to someone you don’t know. If you think you sent money to a scammer, contact your bank or the payment app operator you used to report a potential mistake and hopefully recover your funds.
• Put your number on the National Do Not Call Registry to avoid robocalls from scammers. Go to www.donotcall.gov or call (888) 382-1222.
• Submit complaints about scammers and fraudulent activities to www.consumerfinance.gov/complaint.

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Readers were interested in many important tax issues during the past year, but the most-read tax stories on Kiplinger.com involved questions surrounding state stimulus checks, federal income tax brackets, the Powerball lottery jackpot, and whether you’ll get a Form 1099-K from Venmo or PayPal.

So, in case you missed some of these, here’s a look back and recap of Kiplinger’s top tax stories of 2022. A few of these tax issues could still impact you this year, 2023.

Income tax brackets

During 2022, readers flocked to a story that answered a popular tax question—what are the income tax brackets? Knowing your income tax bracket is important because that tax bracket determines your tax rate (i.e., the amount of tax that you’ll generally be expected to pay on at least some of your income).

There seven federal income tax rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%. And that can be confusing sometimes, because those rates don’t change. But the federal income tax brackets (that get matched to those rates) do change, because they are adjusted yearly for inflation. That’s partly why you can end up in a different tax bracket from one year to the next and possibly end up paying a different tax rate on some of your income.

So, if you want to know what your income tax bracket will be for 2023, or want to double check your bracket for the 2022 tax year, see our updated story: What Are the Income Tax Brackets for 2022 vs. 2023?

More: Federal Tax Brackets and Income Tax Rates

Powerball after taxes

Hundreds of thousands of you wanted to know about Powerball lottery taxes in 2022. 

This story came about at the end of October when the Powerball Lottery jackpot climbed to an estimated $825 million. By November, the Powerball jackpot had ballooned to world record status—about $2.04 billion. And that had everyone wondering what the Powerball winning numbers were and how much someone would take home after taxes if they won the Powerball.

The federal government will withhold 24% of the winnings off the top. However, the amount of tax a Powerball lottery winner will pay depends on factors including the jackpot amount, the payout option the winner chooses, the winner’s federal tax bracket, and the applicable state tax rate. 

If you’re interested, Powerball drawing days are every Monday, Wednesday, and Saturday. Mega Millions drawings are every Tuesday and Friday at 11 pm ET.

New state 'stimulus checks'

2022 was a big year for stimulus checks. However, it’s important to note that the stimulus checks that went out last year were not the stimulus checks from the federal government that many people received during the COVID-19 pandemic. Instead, the stimulus checks and tax rebate checks came from various states. That’s because a lot of states were sitting on budget surpluses and as a result, issued “stimulus” checks and tax rebates to eligible residents.

For example, California stimulus check payments were sent throughout the year. And in Virginia, eligible residents who filed their 2021 Virginia tax return by November 1, received a Virginia tax “stimulus” rebate of up to $500.

If you haven’t received a stimulus check for 2022 and think you are eligible, check our latest updates on state stimulus checks and tax rebates. (Some states are sending those checks during 2023 as well.)

1099-K reporting threshold

There has been a lot of confusion over an IRS reporting threshold for the Form 1099-K.

A new $600 1099-K tax reporting threshold meant that millions of people paid for goods or services through third-party networks like PayPal, Venmo, Square, etc., would receive a 1099-K in January if they were paid more than $600. (The previous trigger for a 1099-K was $20,000 and 200 transactions.)

But, in the face of backlash from some lawmakers and advocacy groups, the IRS announced, at the end of 2022, a delay of the so-called $600 rule for 1099-Ks. That delay means that people with a smaller amount of payments for goods and services from third-party payment networks (which includes a wide range of businesses—not just PayPal and Venmo) won’t receive a 1099-K in January.

However, people who meet the previous threshold of $20,000 in payments for goods and services on third-party networks will still receive a 2022 Form 1099-K.

For more information on what the Form 1099-K is and what’s going on with the $600 rule delay, see You Might Not Get a Form 1099-K From Venmo, PayPal, or Cash App.

Freelancers living abroad count on receiving payments on time, and it’s your job as a business owner to ensure that happens. If you consistently run into difficulties sending funds overseas, you run the risk of damaging your relationship with a key cog in your business, or even losing them outright.

Fortunately, a slew of modern payment solutions makes keeping current on your international invoices much easier and less expensive than in the past.

Staying compliant with reporting and record-keeping requirements also poses far fewer challenges now than in the days of money orders.

What Is an International Contractor?

Before deciding on a payment solution, you’ll need to confirm whether your contractors qualify as “international” for purposes of reporting to the IRS. If you work primarily with U.S. citizens living abroad, for example, you’ll need to request Form W-9 from your contractors, as well as pay close attention to hours billed and manner of oversight to avoid getting slapped with a fine for misclassification.

If your contractors perform their work outside the U.S. and aren’t U.S. citizens, you won’t need a Form W-9, but you should take the time to brush up on the local legal landscape. Clarify in advance what local regulations apply to your relationship with an independent contractor.

Why Hire an International Contractor?

When you have too much work for one person, but not enough for two, a contractor might be the best staffing solution. You won’t take on the expense of hiring a full-time employee, but you’ll still avoid the risk of overworking your team.

You might also find that you have a specific need that requires specialized knowledge, such as website construction, social media management or content design, but find the economics of hiring someone in the U.S. challenging. Thanks to sites such as Upwork and Fiverr, you have an entire world of freelancers at your fingertips, many of whom offer highly competitive rates.

How Do I Pay an International Contractor?

Ideally, your onboarding discussions with a new contractor will include a discussion of your respective payment preferences. For example, self-employed people and independent contractors working in Europe may prefer to be paid via bank transfer for accounting purposes, while freelancers in developing countries may prefer the security and traceability of an ACH wire. Other countries with more robust banking infrastructure or less restrictive regulations allow transfers via PayPal or other solutions, provided everyone keeps detailed records.

On Sept. 13, two cost simulations were done using payment methods for the two most exchanged currency pairs (U.S. dollar to euro and U.S. dollar to British pound) for international payments. In both scenarios, international payment providers such as MoneyGram, Wise, OFX and XE had significantly lower costs compared to the banks, while PayPal had the highest costs.

Here is more detail on each of these payment types to help you decide which one is right for your business.

Wise for Business

Popular fintech company Wise allows Americans to open a business account capable of holding and receiving up to 50 different currencies. If your team of contractors spans the globe, Wise makes it easy for you to pay in local currency without additional fees. Wise also allows you to create and send multiple payments simultaneously using its batching tool, which can dramatically simplify your monthly accounting.

To open a Wise business account, you’ll need to submit documentation to verify that your business exists and confirm your identity. Once approved, you can begin sending payments immediately. Wise doesn’t charge a monthly fee to maintain your account, but you will pay a small commission on every transfer. Contractors need only provide their preferred bank account information to receive payments. 

Wise by the numbers:

• Exchange rate: Actual exchange rate
• Transaction fees: From 0.41%
• Account maintenance fees: None
• Currencies supported: 50-plus

PayPal for Business

The original digital payment platform has evolved from a simple online wallet to a full-fledged business solution with several attractive features. Receive invoices directly from contractors and pay with a single click. Cash flow issues? PayPal allows you to add funds to your account or make payments via credit card. Hold and receive up to 26 different currencies.

Be aware, however, that PayPal charges a transaction fee of 4.5% for international transactions and uses the retail exchange rate if you’re paying in another currency.

To open a PayPal business account, you’ll need to share your Employer Identification Number or Social Security number, as well as provide proof of identity. Once you’ve linked a bank account or credit card, you’re ready to send payments. Your contractors must have their own PayPal accounts to receive payments through the platform. 

PayPal by the numbers:

• Exchange rate: Markup of 4.0%
• Transaction fees: 2% of total transaction amount
• Account maintenance fees: None
• Currencies supported: 25

Wire Transfers

If your contractor lives in a country that frowns on digital payments for entrepreneurs, or your contractor prefers a more secure transfer method, traditional wire transfers might be an option. However, be sure to agree which party will shoulder any foreign exchange fees, which can be hefty. Unlike fintech solutions and digital wallets, banks will charge a significant markup to change currencies.

The good news? You’ll pay a single, standard fee for any transfer, no matter the size. That means no surprises or extra costs if you send large amounts. Then again, it can make sending smaller monthly payments more expensive.

To send a wire transfer, you’ll need your contractor’s bank account information, including the IBAN, SWIFT code and routing number. Contact your bank directly to confirm the fees associated with paying in multiple currencies.

Wire transfers by the numbers:

• Exchange rate: Varies, typically a markup of 4%
• Transaction fees: Vary, typically between $35 and $50
• Account maintenance fees: Vary
• Currencies supported: Any

Money Orders

Though more commonly used by individuals, businesses can also make use of money order services, such as Western Union or MoneyGram, to pay contractors living in countries where banks charge significant withdrawal fees. Low limits on the amount you can send – just $1,000 for a single order – might not make these the most practical option for larger projects. However, the lower transaction and exchange fees might make them worth the extra effort involved in purchasing and sending. On average, you’ll pay between $5 and $25 to send a money order, depending on the currency and the size of the order.

To pay an international contractor using money orders, you’ll need to locate a Western Union or MoneyGram agent. You can use your business credit or debit card to purchase an order in your desired amount, for which you’ll receive a receipt. To ensure your contractor receives prompt payment, be certain you fill out the order using their full legal name as printed on a valid form of government ID.

In the 10 years since I founded my online marketing business, I’ve worked with so many dedicated, talented contractors that I’ve lost count. While they might not show up in my official headcount, I take my obligations to them as seriously as my permanent employees.

Making sure they receive timely payments and never need to chase me for an invoice ensures that they know I value their contribution to my bottom line.

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.

Anxiety got the better of Wall Street on Tuesday, with the stock market tumbling ahead of tomorrow's policy announcement from the Federal Reserve.

Many of Wall Street's top minds are weighing in on how big the Fed rate hike will be. Among them is Brad McMillan, chief investment officer for Commonwealth Financial Network, who, like almost everyone, believes the central bank will hike rates by 75 basis points. A basis point is one-one hundredth of a percentage point.

"Where things get interesting is in the follow-up comments, where the market tries to parse what this means for the Fed's policy decisions through the rest of the year," McMillan says, referring to the press conference Fed Chair Jerome Powell will hold immediately after the announcement. "Expectations are very hawkish, and the Fed can come out just as expected and still be more dovish than expected. That likely limits the market downside from this meeting and just may provide some upside going forward."

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But today, investors envisioned higher rates ahead, which weighed on bond prices – and sent the 10-year Treasury yield up 7.2 basis points to 3.561%, its highest perch since 2011.

Broad selling was seen in the equities market too, with all 11 sectors finishing in the red. As for the major indexes, the Dow Jones Industrial Average plunged 1.0% to 30,706, the S&P 500 Index gave back 1.1% to 3,855, and the Nasdaq Composite shed 1.0% to 11,425.

Other news in the stock market today:

• The small-cap Russell 2000 surrendered 1.4% to 1,787.
• U.S. crude futures fell 1.5% to finish at $84.45 per barrel.
• Gold futures shed 0.4% to settle at $1,671.10 an ounce.
• Bitcoin gave back 2.9% to $19,006.96. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• PayPal Holding (PYPL) tumbled 3.6% after Susquehanna Financial Group analyst James Friedman downgraded the fintech stock to Neutral from Positive, the equivalents of Hold and Buy, respectively. "Braintree is quickly gaining share within PYPL's total payment volume, creating negative leverage from mix," Friedman writes in a note. PYPL acquired the e-commerce web payments processor in 2013. "As Braintree is likely to continue driving PYPL as a whole, its unit economics may drag on PYPL's consolidated results. Consensus may underestimate the yield and transaction expense pressure which PYPL may experience. And margin leverage from headcount management and the potential externalization of PYPL's consumer credit book may not be enough to offset," the analyst adds.
• Deutsche Bank analyst Sidney Ho downgraded Western Digital (WDC) to Hold from Buy, sending shares down 3.0%. "We believe WDC's fiscal first-quarter revenue and EPS are tracking below the low end of guidance, and fiscal second-quarter outlook are also likely to be meaningfully below current Street estimates," Ho says. The analyst points to deteriorating demand and falling average selling prices for flash that will likely continue through the next two quarters. "Consequently, we recommend investors move to the sidelines until we have better visibility into when supply demand balance returns," Ho adds.

What Corporate Warnings Could Mean for Investors

One notable decliner today was Ford Motor (F), which tumbled 12.3% after it became the latest company to warn that broad-market headwinds will weigh on its third-quarter results. The automaker late Monday said it expects Q3 earnings before interest and taxes to arrive between $1.4 billion and $1.7 billion, about half of analysts' consensus estimate. This is due to "continued supply-chain issues, with 40,000 to 45,000 'vehicles on wheels' remaining in inventory as they are waiting on parts," says Michael Reinking, senior market strategist at the New York Stock Exchange. "While those sales are pushed out to the fourth quarter, the company also increased its inflation-related supplier costs." (Ford now expects costs to run about $1 billion more than what was previously expected.)

The strategist notes that while Ford's announcement doesn't "paint a similar backdrop" to last week's FedEx (FDX) earnings warning, it does call into question how big of an impact macroeconomic trends like inflation and slowing growth will have on the upcoming earnings season. Here, we take a closer look at what these caution signs from corporate America could mean for investors.

Karee Venema was long F as of this writing.

China is done.

OK, OK. That might be a little over the top. Perhaps we could say that China's time as the world's greatest growth darling is done. So if you want access to emerging market stocks with blistering "China-like" economic growth, African stocks are the last great investing frontier.

That might sound ridiculous at first. But then, in 1978, when China first began its economic reforms, it might have seemed ridiculous to believe that China would grow to become the world's second largest economy a generation later. And yet, here we are!

Africa is developing a real middle class for the first time in its history. By some estimates, Africa's middle class is already well more than 300 million people. More conservative estimates put the number closer to 170 million people. But we don't need to split hairs: Even at the lower end of the estimate, we're talking about a lot of consumers.

Of course, "middle class" in Africa might mean something very different than middle class in suburban New Jersey. Africa is a frontier market in the truest sense of the word, and much of the continent is at a very low level of development. But that's exactly what makes Africa exciting. It's a lot easier to grow at China-like rates when you're effectively starting at zero.

Technology is also allowing developing countries to skip entire levels of development. Much of Africa will never have wired internet, let alone wired phones. It's vastly cheaper and quicker to throw up cell towers, so that's the direction they'll go. And they'll have none of the cost of maintaining legacy infrastructure.

Think about banking and finance. You likely take your bank account for granted. But only about a third of Africans have access to formal bank accounts. This creates massive opportunities for disruptive fintech operators to step in and eliminate the need for a bank account altogether. If your first experience with payments was something that looked like PayPal, Venmo or Apple Pay, and that became the norm … why would you ever bother with a bank?

These are the kinds of opportunities that are alive and well in Africa. Today, we're going to look at three of the best African stocks (and two funds!) that will take advantage of them.

Data is as of April 13.

• Market value: $23.2 billion

We might not normally think of Africa as a major technology and innovation hub. And frankly, it might be a long time before the country develops widespread precision manufacturing. That infrastructure simply isn't there yet.

But the beauty of modern tech startups is that many of them don't require major infrastructure investment. Scroll through the apps on your iPhone. How many were thrown together by a skeleton crew at a startup?

This brings us to what is, without a doubt, the greatest success story among African stocks: technology group Naspers (NPSNY, $21.64).

Naspers has a history dating back to 1915, when it was founded in South Africa as publishing company. The company certainly changed with the times, getting into paid TV in the 1980s and into internet-related businesses in the 1990s. And in the decades that have passed, it has evolved into one of the largest tech startup investors in the world.

Naspers earned billions for its shareholders by being an early investor in Chinese internet giant Tencent (TCEHY), and today, via its subsidiary Prosus, the company invests in a host of up-and-coming tech startups in the travel, fintech and food delivery industries, among others.

Naspers also owns Takealot, South Africa's largest e-commerce retailer. Call it the "Amazon of Africa," if you will.

If there is one criticism of Naspers it might be that, despite being an African stock, it's not a pure play on Africa given the global nature of its portfolio. But we can be pretty sure the company's investors don't mind.

• Market value: $21.6 billion

There is nothing more fundamental to modern living than a smartphone. Texting, finding directions, hailing a car, paying a bill, reading the news, ordering a pizza, trading stocks – having even an entry-level smartphone makes all of these things vastly easier and more efficient.

This brings us to MTN Group (MTNOY, $12.01), Africa's homegrown telecom giant. MTN is Africa's largest mobile network operator with more than 270 million customers in 19 markets across Africa and the Middle East.

As Africa's population grows wealthier, they will consume more data and mobile services. This is a given. And if that was all there was to the story, it would be enough to make MTNOY an interesting growth play. But MTN Group is one of the best African stocks to buy because there's more to the company than just utility cell phone service.

MTN is also active in fintech and mobile financial services. Via its MoMo Pay fintech flatform, MTN offers in-store payments, remittances, prepaid services, mobile wallets, micro-loans and micro-insurance, among other services.

Yes, the cashless economy has made it even to Africa, and MTN is one of the major players delivering it.

• Market value: $16.4 billion

Let's step away from technology-centric African stocks for a minute and get a little more gritty.

Based in South Africa, Sasol (SSL, $25.77) is a global chemicals and energy company with a presence in 23 countries and more than seven decades of history.

Sasol's energy business manages the marketing and sales of its oil, gas and electricity products in southern Africa and its international gas to liquids ventures in Qatar and Nigeria.

Meanwhile, its chemicals business has the lofty goal of "innovating for a better world" with a portfolio of specialty and commodity chemicals used across a wide range of applications and industries. The chemicals business boasts customers from 120 countries.

Sasol clearly isn't as sexy as MTN or Naspers. But a growing economy requires basic building blocks, and those blocks include energy and chemicals.

You might not want SSL in your backyard, but having it in your portfolio might be a great long-term move.

• Assets under management: $44.7 million
• Expenses: 0.91%, or $91 annually for every $10,000 invested

Any list of the best African stocks is going to be heavily weighted to South Africa – which is where MTN Group, Naspers and Sasol are all domiciled. It's the most developed country in the region, and it's a big enough player in the global space to have made it into the "BRICS": Brazil, Russia, India, China and South Africa.

But there's a lot more to Africa than its southernmost country. And it's the vast frontier-markets interior of the continent that offers the greatest potential for explosive growth.

One way to play that is via exchange-traded funds (ETFs) – in this case, the Global X MSCI Nigeria ETF (NGE, $9.38). Nigeria is Africa's largest country. At more than 200 million people, its population is nearly as large as the next two countries (Ethiopia and Egypt) combined.

The Nigeria ETF is fairly typical for a frontier-markets ETF in that it is dominated by banks and commodity stocks. But it's worth noting that the ETF includes Nestlé Nigeria and Nigerian breweries among its larger holdings.

You should always be careful investing in a frontier market, of course. But if you're looking for a high-octane growth play for the next couple of decades, the Nigeria ETF is a solid contender.

Learn more about NGE at the Global X provider site.

• Assets under management: $63.0 million
• Expenses: 0.79%

Finally, if you're looking for a single one-stop shop for exposure to Africa, the VanEck Africa Index ETF (AFK, $21.45) is a solid choice.

AFK invests in the shares of African companies, defined here as firms that are incorporated in Africa, as well as firms incorporated outside of Africa but that have at least 50% of their revenues or related assets in Africa.

The ETF is heavily weighted to financial stocks, which make up 32% of the portfolio. But it also has a healthy allocation to basic materials and telecom with weightings of 29% and 21%, respectively. It holds the three stocks mentioned above, but also the likes of Kenyan mobile network Safaricom, Morocco's Attijariwafa Bank and British multinational miner Anglo American (NGLOY).

Emerging markets have really struggled over the past decade, and African stocks were no exception. But when EMs move, they can really move. Should they come back into favor in the decade ahead, African stocks could produce some of their most explosive returns – and AFK is an easy way to do so in a single trade.

Learn more about AFK at the VanEck provider site.

There seem to be several camps of thought when it comes to investing in cryptocurrencies. The largest camp includes investment firms and investors who add certain “safer” cryptocurrencies to their portfolios after expending a minimal level of due diligence. For them, the choice to purchase and hold cryptocurrency is based on “FOMO,” fear of missing out, and a recognition (and willing acceptance) that the risk/reward determination behind the investment is similar to buying lottery tickets. Somebody will win, the logic goes; it might as well be me.

The other camps, the sizes of which are difficult to determine, have done sometimes extensive research and have concluded that cryptocurrencies are either:

1. A Ponzi scheme dependent on a steady influx of greater fools,
2. A foolproof way to get rich if you only stick with it, or
3. The future of financial exchanges when crypto eventually replaces fiat currency, such as the U.S. dollar, which is backed by a centralized federal banking system. They think cryptocurrency will provide completely decentralized financial transactions that free investors from the currency manipulations of sovereign nations and wealthy oligarchs. They also believe crypto’s blockchain technology will revolutionize privacy and security in numerous uses, from medical records to voting records.

Just describing the basics of cryptocurrency requires a vocabulary that easily obfuscates its reality. Purveyors of crypto investing have been accused of dismissing valid inquiries as petty ignorance by the intellectually inferior. This article will address some of the promises and issues related to crypto so you can decide the most important question: Is crypto investing worth your time and money?

Understanding the basics

There are three ways to acquire cryptocurrency:

1. After opening an online account, you can choose among a staggering number of cryptocurrencies to purchase through a brokered exchange. Your purchase and sale of the “coins” will look very similar to any other security, except that the market never closes and the price fluctuation is both highly volatile and completely untrustworthy.
2. You can establish a “wallet” to hold crypto that you buy from someone else using one of many peer-to-peer online access points. This type of ownership carries much greater risks from price manipulation, scammers and a total lack of privacy (more on that later), but provides the free capitalist environment promised by an unregulated and decentralized exchange.
3. Finally, you can create new coins for yourself by “mining” crypto.

Every unit of a cryptocurrency, the “coin,” is the product of a created “block” (and every coin consists of a million smaller digital units). The block is created when someone, a “miner,” applies a significant investment in a series of highly sophisticated and interconnected computers and servers (the hardware alone may cost more than $12,000) and in computing power (sources report as much as 86,000 kWh in electricity expended per coin, costing as much as $5,000 in some states) to solve a puzzle that is automatically presented following the successful solution of the puzzle before it. Any number of miners attack the puzzle at the same time, and the miner who solves it first adds a “block” to the “blockchain” that evidences the coins the winner received for the solution. Blockchain puzzles get solved about every 10 minutes, and the difficulty level and coins won for each new puzzle are dependent on the number of miners who attempted the previous one.

The blockchain is a digital ledger that cannot be altered, with each new block appended to the ledger in the order of its creation. The blockchain is available to anyone with the desire to download it and a server with enough memory to hold the entire chain. The blockchain is tested for accuracy through a “proof of work” protocol that verifies the blockchain by comparing the ledgers recorded across these numerous storage servers. If someone attempted to alter the blockchain to obtain cryptocurrency fraudulently, the redundant ledgers would uncover the attempt and discard the alteration. It is this decentralized system for tracking ownership of cryptocurrency that is supposed to provide confidence in its value.

No one can say just how many such blockchain ledgers are stored for each cryptocurrency, how often attempts are made to introduce a fraudulent ledger or how such ledgers are sorted out if several different versions are created at once. Considering the cost and fragility of the hardware, the unavoidable occurrence of human error and negligence, and the already well-documented fraud and theft related to crypto, any confidence in this decentralized governance of its accuracy and valuation may be foolhardy.

The limitations of crypto

But let’s talk about the market for crypto. In spite of stories about a few countries and retailers accepting cryptocurrency, which have been debunked or proven insignificant, crypto may now only be exchanged for actual fiat currency or other digital assets in the form of “non-fungible tokens” or NFTs. We are a long way from establishing the market confidence in the value and stability of cryptocurrency necessary for it to be used for the purchase of goods and services, bypassing fiat money. And that’s the rub: There is no reason to believe that even the most exchanged cryptocurrency will ever achieve the price stability necessary for sellers to accept it. Today, there is no market for direct exchange of cryptocurrency, with purchases instead relying first on liquidation of the crypto to a fiat currency.

The Internal Revenue Service (IRS) treats crypto as a financial asset or property and will treat properly documented gains and losses in crypto liquidation just like other assets. You may note that the 2022 Form 1040 includes a question whether you have ever purchased crypto, even if you haven’t sold any. Which leads us back to privacy. Transactions in crypto are completely transparent to anyone sophisticated enough to review the blockchain. This digital trail will certainly be used by governments to track exchanges. It is already undeniable that crypto is being used in money laundering, ransomware attacks and other criminal activities to avoid federal banking oversight. Even if the blockchains are secure, other crypto repositories, such as exchanges and wallets, have been hacked, with reported losses in the millions of dollars.

Today’s crypto price volatility is absolutely untethered from any expectation of its use as currency. The volatility crypto owners experience now is the product of rumor and speculation. This is why some feel that cryptocurrency is a Ponzi scheme fueled by stories of sellers taking advantage of the huge price swings that occur when celebrity investors and billionaires engage in promotions or whenever a new record is set for a crypto purchase of digital art. In fact, the only way to make money on crypto is to sell out when others are heavily buying in, since the coins have no intrinsic value and aren’t tied to any production or services.

The rise of NFTs

Finally, about digital art. Today, we see many examples of blockchain technology being used to create non-fungible tokens, or NFTs. An NFT really is a token, a stand-in for any digital creation one may house there. It could be a photo in the form of a JPEG file, a video file, a text file (such as a contract, a deed to property, a single vote for a political candidate or a poem) or any number of other supposedly unalterable digital creations. The value of the NFT is not in any apparent uniqueness, since it can be readily copied, but in its actual uniqueness, because it is forever tied to its place in the blockchain.

However, an NFT only has the value one might exchange for it, either in other NFTs or in cryptocurrency coins. For example, if I buy a NFT digital artwork for one Bitcoin today (Bitcoin is trading as I type this at $38,686 per coin), then the seller could sell that coin immediately for dollars or could hold onto that coin in hopes it will trade higher later. For example, Bitcoin traded at about $67,000 per coin on Nov. 7, 2021, but also traded for about $29,000 per coin on July 19, 2021. What will it trade for next month?

The Wild West

All this is not to say that cryptocurrency as an investment and a method of exchange will or should be eliminated. Blockchain technology is an incredible advancement in the security and utility of information exchanges. Certain appropriate uses are already emerging. And investing in more speculative alternative assets is certainly an appropriate part of a diversified portfolio. But we’re in the Wild West of cryptocurrency today and, like the Western territories in American history in which intrepid homesteaders traced the paths of the explorers, one must consider the inherent risks faced by early adopters.

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.

Governments and private businesses alike continued to put more distance between themselves and Russia, sending commodities higher but triggering a slump in equities that sent the tech-heavy Nasdaq Composite into a bear market.

Oil soared on Monday as both Congress and the White House reportedly were in favor of moving ahead with banning Russian oil, even if Europe fails to implement similar measures. U.S. crude oil futures jumped 3.2% to a 13-year-high settlement of $119.40 per barrel.

Gold futures, meanwhile, enjoyed their highest finish since August 2020, climbing 1.5% to settle at $1,995.90 per ounce after trading above $2,000 intraday.

Also, over the weekend, Adobe (ADBE), Netflix (NFLX), PayPal (PYPL) and others joined a growing list of companies at least partially shutting down operations in Russia. U.S. equities continued to feel the weight of these moves, however. The financial (-3.6%) and consumer discretionary (-4.9%) sectors suffered the deepest losses in a bright-red day for the broader markets.

The Nasdaq was worst off among the major indexes with a 3.6% decline to 12,830 that put it into bear-market territory, off more than 20% from its Nov. 19 high. The S&P 500 (-3.0% to 4,201) and the Dow Jones Industrial Average (-2.4% to 32,817) also finished well in the red.

"The S&P 500 posted the worst day since October 2020," says Cliff Hodge, chief investment officer for financial planner Cornerstone Wealth. "Fear is palpable. There seems to be no evidence of improvements in Ukraine, and the rhetoric out of D.C. continues to get more hawkish.

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"While it’s impossible to know where the ultimate bottom may be, from a risk-reward standpoint, the market looks very reasonable. We’re using weakness to add exposure as we continue to see very little chance of recession over our forecast horizon."

Other news in the stock market today:

• The small-cap Russell 2000 declined by 2.5% to 1,951.
• Bitcoin tumbled by 5.1% to $37,560.26. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Bed Bath & Beyond (BBBY) was a rare splash of green in today's trading, jumping 34.2% on news that Ryan Cohen – founder of online pet company Chewy (CHWY) and chairman of video game retailer GameStop (GME) – took a 9.8% stake in the home goods retailer via his investment firm RC Ventures. Cohen believes BBBY needs to explore strategic options, which include separating its baby division, buybuy Baby, according to a letter he wrote to RC Ventures' board members. Wedbush analyst Seth Basham maintained a Neutral (Hold) rating on BBBY. "While BBBY shares could move higher on new activist involvement and high short interest, we remain sidelined without more visibility to market share sustainability for the core Bed Bath business," the analyst says.
• Surging oil prices once again weighed on airline stocks. United Airlines (UAL, -15.0%), Delta Air Lines (DAL, -12.8%) and American Airlines (AAL, -12.0%) were some of the day's biggest decliners.
• Uber Technologies (UBER, -4.2%) lifted its first-quarter adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to a range of $130 million to $150 million from its previous guidance of $100 million to $130 million. The upwardly revised guidance comes amid increased demand for rides and food delivery, according to the company. "We find Mobility trends in February very encouraging, with trips at 90% and gross bookings at 95% recovered vs. pre-pandemic levels (February 2019), while Delivery annualized run rate gross bookings reached new highs," says CFRA Research analyst Angelo Zino (Strong Buy).

Protect Yourself Against Stagflation

We're increasingly hearing the "S" word being thrown around Wall Street. Stagflation, that is.

Yes, the unemployment rate has recovered to near pre-pandemic lows, but the other two hallmarks – red-hot inflation and slowing economic growth – are certainly at the front door. Several economists have been lowering their U.S. GDP estimates of late, including LPL Financial Chief Economist Jeffrey Roach.

"We currently expect the U.S. economy to grow 3.7% in 2022," he says, down from 4% to 4.5% in LPL's 2022 outlook. (Kiplinger currently forecasts 4.0%.)

"The risks are to the downside since the Fed may err on tightening too fast, the recent commodity spike may trickle down to the U.S. consumer, and supply-and-demand imbalances may last longer than expected."

Commodities are considered to be among the best defenses against potential stagflation, and you can access them in a number of ways. Exchange-traded funds, such as these 14 ETFs, allow you to invest in baskets of commodity stocks, futures and sometimes the physical goods themselves.

But those wanting a more concentrated bet might consider individual stock picks. From energy producers to miners, these five "stagflation stocks" represent a short list of commodity-tethered plays that should provide protection should the economy continue to cool while inflation keeps heating up.

The earnings calendar is jam-packed for a second straight week, with more than 20% of S&P 500 companies set to report. Among them is Google parent Alphabet (GOOGL, $2,630.45), which will unveil its fourth-quarter earnings report after Tuesday's close.

Similar to other mega-cap stocks, GOOGL has had a rough start to 2022, down around 10% for the year-to-date. Still, Alphabet remains a long-term outperformer on the charts, with shares up about 43% over the past 12 months.

Analysts see even bigger long-term gains for GOOGL stock too. The average price target among those following Alphabet that are tracked by S&P Global Market Intelligence is $3,365.86, representing implied upside of almost 28% over the next 12 months or so.

Plus, of the 47 analysts following GOOGL, 31 say it's a Strong Buy and 15 call it a Buy. This compares to just one who has a Hold rating on the stock, with not a single Sell or Strong Sell to be found.

Truist Securities analyst Youssef Squali is one of those with a Buy rating on Alphabet. "GOOGL remains one of our favorite names going into the fourth-quarter earnings season as we believe it will show sustained signs of recovery especially in Search and YouTube, on the back of slightly easier year-over-year comps," he says.

The analyst is targeting top-line growth of 25% over Q4 2020, and expects to see broad-based improvement across all digital marketing channels following another strong holiday season.

UBS analyst Lloyd Walmsley is also expecting strong Q4 results from GOOGL. Walmsley points to the research firm's fourth-quarter ad checks, which suggest Google was a prime beneficiary of the reallocation of social media budgets.

"Google Search and YouTube sounded the best out of all the ad platforms in our checks, with a number of advertisers indicating that they are seeing demand for the platforms and improvements being made across both," he writes.

The analyst has a Buy rating on GOOGL ahead of earnings. He believes it's the "safest name to own [among online ad companies] into earnings season," but warns that it's also a crowded play.

As for Alphabet's upcoming report, analysts, on average, are looking for a 26.8% year-over-year (YoY) spike in revenues to fuel a 22.5% jump in earnings per share (EPS) to $27.32.

PayPal Stock Struggles Ahead of Earnings

PayPal (PYPL, $160.84) will report its fourth-quarter earnings after Feb. 1 close. Shares are trading at their lowest level since June following the recent stock market crash.

Oppenheimer analyst Dominick Gabriele thinks any additional weakness in the payments processor could create a buying opportunity. "[I]n a big market selloff or further correction below the current ~$160 stock price level, we would slowly build a position throughout the first half of 2022," he says. The analyst has an Outperform rating on PYPL, which is the equivalent of a Buy.

And there are certainly near-term risks to PayPal. "We see a combination of slowdown in e-commerce/penetration of e-commerce to total retail sales, worries of lower-multiple super app business revenue contribution, and a headwind of eBay for reasons of recent underperformance," Gabriele writes.

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Many of these same concerns were voiced by PYPL when it offered up lower-than-expected Q4 guidance back in November. Specifically, John Rainer, chief financial officer of PayPal, pointed to headwinds from eBay's payments migrations, as well as "retail supply chain and labor market concerns" as reasons why the company took a cautious stance for the three-month period.

PayPal forecast fourth-quarter earnings of $1.12 per share on a revenue range of $6.85 billion to $6.95 billion. This is roughly in line with analysts' consensus estimates for earnings of $1.12 per share (+3.7% YoY) on revenue of $6.86 billion (+12.2% YoY).

Analyst: Ford Motor Well-Positioned to Navigate "Chip and Ship" Issues

Ford Motor (F, $19.28) will report its fourth-quarter earnings after Thursday's close. Analysts, on average, expect earnings to surge 32.4% YoY to 45 cents per share. Revenues are projected to rise to $35.5 billion, a more modest 6.9% improvement over the year-ago figure.

Analysts will also be looking for updates to any "chip and ship" issues for the automaker. "We do see the chip issue continuing to run through 2022," said John Lawler, Ford's chief financial officer, in the company's third-quarter earnings call.

As for the "ship" part of the equation, "[P]erhaps our biggest job, in my opinion, is to break the constraints we have in manufacturing and our supply chain so we can get these products out to these customers," CEO Jim Farley said in that same call.

Still, CFRA Research analyst Garrett Nelson (Buy) believes Ford is the most well-positioned among traditional automakers to handle these challenges. "While the company's language has been cautious, we believe that primarily reflects management's desire to underpromise and overdeliver," Nelson adds.

Karee Venema was long F as of this writing.

2021 was a trying time for shareholders of major payments stocks. During a period in which the S&P 500 racked up roughly 27% gains, Mastercard (MA, +0.7%), Visa (V, -0.9%), PayPal (PYPL, -19.5%) and Square (SQ, -25.8%) fell prey to gravity.

Research outfit Jefferies, however, believes respite is nigh – for most of this group, anyway.

Jefferies analyst Trevor Williams says in a Wednesday note that despite underperformance in 2021, which might otherwise precede an industry-wide bounce-back, he’s being more selective in 2022. The rationale: The competitive disruption narrative that took hold last year might take a breather, but is unlikely to reverse.

Jefferies' Take on Payments Stocks V, MA, SQ and PYPL

For instance, he says he sees the "cleanest setup for V and MA in more than two years, with '22 poised for upward revisions." He adds that he favors Visa stock tactically in the near-term but prefers Mastercard stock across all of 2022. He sees both possibly enjoying upside from cross-border payments.

Williams also calls Square a “top pick” among payments stocks, with less competitive risk than other payments sub-industries, as well as a valuation that’s attractive relative to growth. He does warn, however, that "the impact to high-growth multiples from a rising 10-year Treasury has exacerbated concerns tied to Cash App visibility."

But at the same time that he reiterated Buy ratings on V, MA and SQ, he downgraded PayPal to Hold.

“With our expectation for growth to remain sub-20% year-over-year through at least [the second quarter of 2022], we do not see a positive catalyst in the near term. … And with valuation still roughly five times above pre-COVID averages, we see little room for expansion.”

We tend to overlook the amount of information and assets we have on the web, including social media and networking websites (Facebook, Instagram, LinkedIn), frequent-flier miles, online credit card and bank accounts, subscriptions, photos, etc. What happens to all these accounts, and their value, when we pass away?

Most family members may not have a clue what we have floating out in cyberspace, and accessing or deleting accounts can be tricky for family members if they don’t have your login credentials. Each website has its own requirements and legal processes for dealing with death, which can be quite cumbersome. But there are a few actions you can take in advance to make this easier for your loved ones to navigate. And if you are in the one wading through the process after a loved one dies, read on for some tips to help get things done.

1. Make a list of everything you access online and the login credentials

In addition to having your estate planning documents in order, it makes sense to compile a list of all your online accounts, their user names and passwords. This includes bank accounts, credit cards, bitcoin, PayPal, email accounts, Facebook, Twitter, TikTok, Amazon, iTunes, Netflix, Hulu, Apple Music, Spotify, Shutterfly, Match.com, frequent-flier accounts, etc. It’s a lot, but it can be done bit by bit. Each time you log on to an account, just add it to the list. You can make a list of your online accounts using a password manager or a password-protected Excel spreadsheet and update it one a quarter or once a year.

Taking this first step to compile a complete list is important, because these accounts can potentially hold value. Accounts such as Amazon, iTunes and PayPal may have monetary value stored on the apps, which could be passed to heirs. There are exceptions, such as with an iTunes music collection, which is non-transferrable and gets deleted when you pass away. If you have a “family” sharing account through Amazon, you may be able to circumvent this for certain content. Credit card points and frequent-flier miles all have different rules depending on the company.

Beyond monetary value, your digital life could have sentimental value as well. Facebook and online photo storage accounts can hold a trove of family memories and posts you might like to see preserved after you are gone.

2. Determine what you would want done with each account

Once you have your list of online accounts, you need to decide what you want to happen to each one when you’re gone: Some you may want to save, while others you may want to ensure are closed once you die. The decisions you make will form the basis for creating your “digital will.”

Any online account that holds funds that can be withdrawn or can be used to make purchases should probably be closed or frozen (bank accounts, credit cards), but others could safely be left open if monitored. Many email accounts, for example, have a provision where if they go unused for a certain period of time, they will eventually close automatically. You would probably want to close accounts that could fraudulently be used since the owner is no longer monitoring the account. Most online providers will want a copy of the death certificate to close the account.

Meanwhile, the current Facebook policy once someone dies is to memorialize the account — certain private information is removed from public view, and the page becomes accessible only to friends. Facebook allows you to name a “legacy contact,” which is a person you select to care for your account after you pass away, and the account is memorialized.

If you would rather see your Facebook account be deleted, you can arrange for that yourself. Just follow Facebook’s directions to change your settings. If you don’t do that yourself, it can be difficult for a family member or friend later on to completely remove an account after your gone — unless they have access to your password.

Other social media accounts may provide similar options, so you may want to check into what each site offers. For instance, Twitter has strict privacy policies, and will rarely allow anyone to access the account belonging to someone who is deceased without a death certificate, power of attorney, a court order or an executor’s testament. Twitter has an online form that can be used to deactivate the account of a deceased user or someone who is incapacitated, but it may not be easy.

3. Assign someone you trust as online executor of your digital will

Now that you’ve decided what you want done with each account, it’s time to put your wishes in writing. You would want to work with your attorney on adding the correct language to your estate documents based on what you want to happen. This can be an attachment to your documents or a clause. Many clauses are fairly general and only reference what digital assets cover and may provide access to only your executor, trustee or power of attorney. If you want to get more specific as to who can access certain accounts, you may need to add additional detail.

For example, you may not want to allow certain family members access to your social media accounts, although you may trust them with the financial aspects.

In your digital will, you need to name a trusted family member or friend as your “online executor.” The easiest (although not the safest) way for the online executor to take action would be to provide them with the list you compiled in Step 1 of all websites and accounts you own and give them access to your login credentials to use once you are gone. Remember to update your list of credentials periodically if you make changes or update passwords, and make sure to explain where the information is located.

If you don’t want anyone to have access to your information while you are alive, a safer way to share your credentials is to give your online executor a copy of the document, but give the password to your attorney (or vice versa). The attorney will then give your executor the password only once provided with a death certificate so the information can be accessed.

What can you do if there is no documentation?

If no list of online assets has been left by the deceased individual, checking their email may be a good place to start as this could lead to clues on other accounts they may have. If you have access to their email account, it may make sense to keep email accounts open for a while as you will be able to monitor received emails. You can also look through saved or archived emails and potentially find username and password confirmations or be able to send the lost passwords for other accounts to that email address.

That being said, you need to be mindful of the laws involved. As Fidelity warns: “Laws on both state and federal levels prohibit unauthorized access to computer systems and private personal data. These laws serve to protect consumers against fraud and identity theft, but they also may create virtually insurmountable obstacles for family members trying to gain access to the digital assets and information of a deceased loved one. The law is evolving to keep up with the rapidly changing online world, but much in this area is still unclear. For that reason, it’s essential to ensure that your estate plan gives your fiduciaries the authorization they need to access any necessary digital data.”

Be advised that if the person hasn’t given you access to their email accounts, trying to gain it after they are gone could be next to impossible. Email providers are strict about such requests, often demanding a court order to consider them.

Aside from email, looking through credit card statements can also be helpful in determining any active online accounts that may be paid for by automatic debits, such as iTunes or Netflix subscriptions.

Since planning for online accounts is a relatively new development, speak to your attorney about the best way to handle your current situation as each state and each website has its own legislation on who can legally access your online information.

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.

Whether splitting a restaurant bill with friends, paying the pet sitter or tipping your barber, there’s a good chance you’ve found yourself using a peer-to-peer payment app—or at least considering it. In mid 2021, PayPal reported a 41% increase in payment volume over the past year for its peer-to-peer transfer businesses. One of them is Venmo, which saw a 58% increase on its own platform.

PayPal, Venmo, Zelle, Cash App and others make it easy to send and receive money. You link your bank account, debit card or credit card to the app, so you don’t have to swap sensitive financial-account information with the other person in a transaction. Instead, you share details such as a user name, an e-mail address or a phone number. Usually, transfers arrive quickly in the recipient’s app balance, though moving the funds from the app to a bank account fee-free may take a few days.

But peer-to-peer (or “P2P”) apps can also leave you more vulnerable to fraud. They’re an increasingly popular target for scammers who, for instance, trick users into sending money for goods or services that never materialize. Or a crook may pose as someone you know and request funds from you. Unfortunately, you may never get back money lost in such scams because you made the payment yourself. The app companies “take the position that you are not protected,” says Lauren Saunders, associate director of the National Consumer Law Center. But, she says, it’s worth asking the company to reverse the transfer if you’ve been scammed.

However, if a criminal hacks your P2P account (say, by stealing your username and password and logging in from his or her device) and makes unauthorized transactions, you have legal protections. If the transfer came from your bank account, debit card or a cash balance stored within an app, you generally have zero liability as long as you notify the app or financial institution within 60 days of your statement being sent. The rules are a bit different if your phone or other device is lost or stolen and a crook uses it to make transfers. Your liability is no more than $50 if you notify the app or financial institution within two business days of learning about the theft. Your liability could be as much as $500 if you wait up to 60 days or unlimited after 60 days. With any P2P platform, you have the right to dispute erroneous charges (say, a single authorized transfer that is mistakenly posted to your account twice).

Credit cards have more-robust protections, capping your liability at $50 for unauthorized charges through a lost or stolen device or at zero if your account is hacked. But P2P apps typically require a fee of about 3% for a transfer using a credit card. And your card issuer may treat money sent through such apps as a cash advance, which typically comes with an additional fee of 3% to 5% and accrues interest immediately at a high rate. Along with credit card fees, watch for other potential charges, such as a fee for instant transfers from the balance held in the app to your bank account.

To help you sort through the options, we’ve listed details for several major P2P services, including fees and dollar limits for peer transfers and how long it takes to move funds from the app to a bank account. We’ve also highlighted the types of transfers or users for which each app is best suited and additional features the apps offer, such as cryptocurrency trading or rewards credit cards.

Fees: 2.9% plus 30 cents for transfers made in U.S. dollars with a credit or debit card; no fee for transfers from your bank account or PayPal balance

Dollar limit: Up to $60,000 per transfer (limits are sometimes lower for security reasons); no overall limit for users who have verified their identities

Speed: One to three business days for funds to transfer from your PayPal balance to your bank account (or pay 1.5% for an instant transfer)

Best for: Large transactions

One of PayPal’s main advantages is its high transaction limit, making it a strong choice if you need to send big sums—say, for a car. And because PayPal is well established, the recipient may already have an account.

PayPal’s capabilities go well beyond P2P transfers. Some retailers, including Target and Walmart, accept PayPal for online purchases—and through promotional offers, you may be able to get cash back by paying with PayPal. Or at certain merchants, including CVS, pay in-store by pulling up a QR code on the PayPal app and having the cashier scan it at checkout. With the PayPal Cash debit card, you can use your PayPal balance to get cash at ATMs or make purchases at stores that accept Mastercard. The PayPal Cashback Mastercard credit card provides 2% cash back on every purchase (redeem rewards to your PayPal balance).

You can buy cryptocurrency through PayPal with as little as $1 and then hold it in your PayPal account, sell it, or make retail purchases with it through PayPal. The company may add a stock-trading platform to its offerings, and PayPal is introducing an online savings account yielding 0.4% in the coming months.

Fees: 3% for transfers with a credit card; no fee for transfers from your Venmo balance, debit card or bank account

Dollar limit: $5,000 per trans­action and per seven days for account holders who have verified their identities

Speed: One to three business days for funds to transfer from your Venmo balance to your bank account (or pay 1.5% for an instant transfer)

Best for: Easy payments with fun features

Venmo boasts a clean, attractive interface and adds a social-media spin to payments. You can include emojis to express the reason for a payment—for example, a beer mug to repay a friend for drinks at the bar—and add comments to transactions in much the same way you would to posts on Facebook or Instagram. For those who make their transactions public, you can see a feed that shows with whom they’re exchanging payments and their comments. We recommend hiding your contact list and setting your own payment activity to be invisible to anyone outside the transaction. Fraudsters could monitor your transaction patterns and use the information to set up a fake profile and request money from your friends.

Venmo users can trade cryptocurrencies through the app. Venmo also offers a debit card linked to your account balance. Venmo’s credit card provides 3% cash back automatically on whichever of eight categories you spend the most each month (such as groceries, gas, dining and travel), 2% back on the category with the second-highest amount and 1% back on other spending. Rewards are transferred to your Venmo balance.

Fees: Typically there is no fee to transfer money from your checking account; you can’t use a credit card

Dollar limit: Varies by institution and sometimes by account and banking history, but $1,000 to $3,000 per day is typical; if your bank doesn’t participate, the limit is $500 per week

Speed: Instant

Best for: Free, instant transfers between checking accounts

Several large banks introduced Zelle in 2017 as a way for customers to send money to one another, even if their checking accounts were at different institutions. Today, Zelle is available within more than 1,000 bank and credit union apps (or you may be able to send and receive transfers through your financial institution’s website). The big appeal is that you can transfer money directly from one checking account to another within minutes. And you avoid giving a third-party app access to your bank account—a plus for security and privacy.

At least one party in a Zelle transaction must have access to the service through a bank or credit union. If you can’t use Zelle through your financial institution, you must download the Zelle app and connect a Visa or Mastercard debit card.

Fees: 3% for credit card transfers; no fee for transfers from your Cash App balance, debit card or bank account

Dollar limit: Send up to $7,500 per month if you have verified your identity

Speed: One to three business days to transfer funds from your Cash App balance to your bank account (or pay 1.5% for an instant transfer to your debit card)

Best for: Simple payments; users may also be interested in Cash App’s investing platform

Cash App is owned by Square, which created credit-card readers that business owners can connect to their mobile devices. Cash App is an uncomplicated platform for transferring money: Enter the amount to send, hit “Pay,” and enter the user name, phone number or e-mail address of the recipient.

Cash App users can buy fractional shares of stock or bitcoin with as little as $1. You can set target prices at which the app will automatically buy or sell stocks or bitcoin, arrange regular cash investments to gradually increase your holdings, and get notifications when specified stock or bitcoin prices spike or dip. Cash App also offers a debit card linked to your Cash App balance, and through its “Boosts,” you can get discounts when you make purchases at some merchants.

Fees: No fees for transfers from your Apple Cash account or debit card; you can’t use a credit card to send peer transfers

Dollar limit: $10,000 per transfer and per seven days

Speed: One to three business days to transfer money from your Apple Cash balance to your bank account (or pay 1.5% for an instant transfer to your debit card)

Best for: Fans of Apple devices

If you have an iPhone, iPad or Apple Watch and want to send money to other users of Apple devices, Apple Cash provides a smooth avenue. Through the Messages app, you can send and receive payments with your contacts. Transfer money from your Apple Cash balance (the default method) or from a linked debit card. The recipient must have an Apple Cash account and a compatible Apple device.

Fees: No fee to transfer from your Google Pay balance, debit card or bank account; you can’t use a credit card to send peer transfers

Dollar limit: Send up to $5,000 per seven days if you verify your identity

Speed: Three to five business days to send money to your Google Pay balance or to another user from your bank account (transfers to another user from your Google Pay balance or debit card are typically quick); one to three business days to transfer funds from Google Pay to your bank account; transfers from Google Pay to debit cards are typically instant but incur a 1.5% fee

Best for: Frequent users of Google’s services and products—especially Android devices

If you typically maintain a cash balance in your Google Pay account or link the app to your debit card, it’s a reasonable choice for sending P2P payments. If you send money directly from your bank account, however, it can be a slow process. And the app is not quite as attractive or user-friendly as most of its competitors. On the positive side, Google Pay is useful for making retail purchases with a linked credit or debit card. You can get cash back on purchases with certain merchants—35% back at Dunkin’ is one offer we recently saw. (Contactless in-store payments are available only on Android devices; P2P payments are available for both Apple and Android devices.)

Secure your apps. Lock your apps with a PIN or biometric authentication, such as your fingerprint, and set up multi-factor verification when possible. For example, if someone tries to log in to your account from an unfamiliar device, you may receive a verification code by text message or e-mail.

Monitor transactions. Sign up for alerts for each transaction (through the app or by text message or e-mail), and watch out for suspicious charges on statements from linked financial accounts.

Send money to the right person. If you mistype your recipient’s contact information, your money could wind up in the wrong hands. Carefully check that you’ve entered the correct details before you hit send. Alternatively, many apps give each user a unique QR code. Scan your recipient’s code through the app on your device to ensure the payment goes to the correct place. Another option: Have the recipient send you a request for payment through the app.

Don’t fall for scams. Send money only to people you know and trust. Avoid using P2P apps to buy goods from strangers online, and be wary of unexpected requests for payment, even from seemingly familiar contacts—a fraudster may be using an account name similar to that of your friend.

A recent rally to all-time highs has sparked yet another wave of interest in Bitcoin (BTC). Logically, much of the renewed emphasis is on Bitcoin as an investment. But BTC is also at its core a digital currency, and with every day that goes by, a growing number of businesses are allowing people to buy and sell goods and services with it.

So for a moment, let's put on our consumer goggles and talk about how to spend your Bitcoin.

Firstly, it's important to note that Bitcoin is often recognized as a "store of value" today, and thus it's more similar to gold than it is to the dollar, pound or yen, for example. The wild fluctuations in value and sentiment toward future price rallies are such that many investors are unwilling to use their BTC to make purchases.

However, an important facet of cryptocurrency adoption is practicality. For Bitcoin to become more widely accepted around the world, more adopters will need to feel emboldened to actually use the cryptocurrency. At the same time, merchants will have to see proof that customers will actually use BTC, and that the costs of offering it as a payment option will be worth it.

Progress is being made. A growing number of companies have added Bitcoin and other cryptocurrencies as a form of payment. For example, Tesla (TSLA) began accepting BTC for its vehicles in early 2021 (then backed out in May, then resumed accepting Bitcoin in July). And PayPal (PYPL) recently developed a crypto checkout service that can be used at all of its 29 million merchants worldwide.

Read on as we explain how to store and spend your Bitcoin, and then we'll discuss many of the places that will let you pay in BTC.

How to Store and Spend Bitcoin

Online exchanges including Coinbase (COIN) and Binance are popular places to buy and sell Bitcoin. But when it comes to spending it, you'll need a little more than an online portfolio.

Fortunately, just like with fiat (traditional) money, you have some options available to you.

With your dollars, pounds and yen, you can store your money in a bank. From there, you can spend it digitally, say through a bank transfer or even PayPal. You can use a debit card, too. And, of course, you can always withdraw your money and physically stuff it in a wallet and spend it that way.

Storing cryptocurrency involves a "wallet" as well – but because it's digital money, your wallet must be digital as well. You can use software-based wallets such as Metamask or Coinbase Wallet on your desktop, or to access your crypto from anywhere using your smartphone. Physical wallets exist, too: USB devices that store your cryptocurrency electronically.

And actually, it's even possible to use paper wallet services for your crypto, which is the closest you'll get to spending your BTC as if it were actual cash. With this method, you'll have a piece of paper with two QR codes: one can be used to receive cryptocurrency, and the other can be used to spend it.

Buying goods from online businesses that accept Bitcoin is easy if you have a cryptocurrency wallet with an integrated browser or browser extension. If you don't, most wallets offer easy to copy-and-paste SegWit (segregated witness) addresses that come accompanied by a QR code to make it simple to send and receive specific cryptocurrencies both online and offline.

The transaction typically involves going to wallet's "send" option, entering the wallet address of the recipient, selecting which currency and how much you'd like to send, then approving the transaction.

Of course, if you'd prefer something simple and familiar, you can spend your Bitcoin and other cryptocurrencies by using crypto-linked debit cards. Even major processors such as Visa (V) and Mastercard (MA) offer these products, and you can use them for everyday expenses just like you would a traditional debit or credit card.

Where to Spend Bitcoin Online

Bitcoin is becoming easier than ever for holders to spend as they wish online, which has helped to pave the way for greater practicality and adoption across the wider world of crypto.

A quick smattering of leading online retailers that allow users to add money to their accounts using Bitcoin and/or other cryptocurrency:

• Microsoft (MSFT)/Xbox
• Namecheap
• Newegg (NEGG)
• Overstock (OSTK)
• Shopify (SHOP)

In a few instances, online shops such as Etsy (ETSY) don't directly accept Bitcoin, but customers and vendors have found ways around the payment systems to send and receive BTC anyway.

A number of service providers accept Bitcoin payments, too, either directly or through third-party service providers, including:

• AT&T (T)
• Dish Network (DISH)
• Namecheap
• ProtonMail
• Twitch
• Wikipedia

You can even pay for your schooling with Bitcoin; the University of Pennsylvania's Wharton School recently started accepting cryptocurrencies for its online executive education program.

Where to Spend Bitcoin Offline

You can spend your Bitcoin in the physical world, too. While the number of options isn't nearly as robust as online, several retailing and restaurant giants have opened their companies up to accepting BTC, including:

• Baskin-Robbins
• Crate + Barrel
• GameStop (GME)
• Home Depot (HD)
• Starbucks (SBUX)
• Whole Foods (AMZN)

(Note: Some businesses might not accept Bitcoin or crypto at all locations.)

More companies are joining the fray of late. Earlier this year, Landry's – the parent company of Del Frisco's, Morton's, Chart House and Bubba Gump Shrimp, among other restaurants – said it would be accepting Bitcoin across most of its locations. McDonald's (MCD) and Burger King (QSR) are experimenting with accepting cryptocurrency in some international locations.

If you're interested in knowing which stores around you accept cryptocurrency payments, it's worth consulting Coinmap, which shows both merchants and ATMs. Bitcoin.com has a map detailing where Bitcoin is accepted.

Taxes Are the Tricky Part

The IRS taxes Bitcoin just like any other investment like stock and bonds, meaning that the length of time you own the asset will impact the capital gains tax rates you pay for trading profits. If you hold it for less than a year, then sell it for a profit, you will pay short-term capital gains rates of between 10% to 37%, depending on your income. If you hold Bitcoin for more than a year, then sell it for a profit, you're looking at long-term capital gains of either 0%, 15% or 20%.

The thing is, these same rules apply when you spend Bitcoin.

If you spend $200 worth of Bitcoin that you purchased for $100, you will have to pay capital gains taxes on that $100 of "profit." If you spend $200 worth of Bitcoin that you purchased for $400, you can claim $200 in capital losses. (Individual filers can deduct up to $3,000 in capital losses each year.)

Sure, taxation laws surrounding the cryptocurrency can change quickly. Maxim Manturov of Freedom Finance Europe tells FX Empire that "The crypto market lacks stability and can start being regulated any time, which actually already happened in China. The Chinese government banned banks and payment systems from using Bitcoin."

Back here in the U.S., the possible beginnings of cryptocurrency regulation recently popped up in a bipartisan infrastructure bill.

For now, however, the current tax code likely won't completely stop the industry's most eager consumers. But they might keep a few spenders from making purchases with their Bitcoin. Either way, anyone in the cryptocurrency ecosystem should know the tax consequences of spending their hard-earned digital coins.

If you read my article earlier this year about so-called “game-day-trading” apps, you’ll already know that I’m no fan of brokerage firms that encourage people to treat investing like gambling.

However, I do believe that it’s beneficial for young people to get hands-on investment experience during their formative years. This knowledge will give them a head start on understanding the importance of managing their money responsibly.

Until recently, kids under 18 were only able to invest online using a custodial brokerage account opened by a parent or guardian. Theoretically, a child with access to the account could invest in anything an adult could, including foreign stocks, currencies, leveraged ETFs and junk bonds. If the custodial parent wasn’t paying attention, their child could get them both into trouble fast.

Giving teenagers unrestricted and unmonitored access to online trading is a recipe for disaster. That’s why I was intrigued by Fidelity Investments’ decision to launch a special discount brokerage platform for teenagers. Called the Fidelity Youth Account, this no-fee account allows children ages 13 to 17 to invest and bank online.

Now, I’m not legally allowed to endorse any particular trading platform. Even if I were, I would never give my thumbs-up to any app I didn’t try out on my own. It’s been many decades since I was teenager, so I won’t be able to kick Fidelity’s tires anytime soon. Therefore, after reading Fidelity’s description of the Youth Account, the most I can say is that I hope it lives up to its potential to teach teens how to invest, save and spend responsibly.

Some Impulse Controls Have Been Built In

On paper I will say that I am encouraged by the level of controls and parental oversight Fidelity claims will prevent teenagers from acting like amateur hedge fund traders or indulging in Wolf of Wall Street-style speculation.

First of all, teens can’t open an account on their own. Parents will have to open it for them, and they can only do it if they have their own Fidelity brokerage account. The Youth Account can be funded from a parent’s brokerage account or from transfers from the teen’s bank account (or a joint bank account). There are no minimum balance requirements or account maintenance or trading fees.

The account comes with a debit card, which Fidelity says will have daily spending limits. And kids can transfer money in and out using PayPal, Venmo and other apps. The app won’t give parents tools to control what their teenagers spend their money on or what they invest in, but they will receive notifications of these activities. I certainly hope they will scrutinize them very closely, because if Junior uses the account to conduct illegal or fraudulent activities, Mom and Dad will be liable. Fortunately, Mom and Dad can also shut down the account entirely if Junior betrays their trust.

To prevent kids from jumping on Reddit-style bandwagons, Fidelity says it won’t let kids buy and sell options, penny stocks, foreign stocks or individual bonds or cryptocurrencies. They can’t open margin accounts, short sell or invest in annuities, structured products or other complex securities.

But I Still Have Some Serious Reservations

This all sounds well and good. But there are some things about this app I have concerns about. I realize that Fidelity isn’t offering this platform out of the goodness of its heart. The company wants to start building loyalty to its discount brokerage platform as early as possible. That’s why, according to Fidelity, when the teen turns 18, the Youth Account automatically converts to a regular Fidelity brokerage account, and all parental controls come off. Does turning 18 suddenly make you a smarter, more responsible investor? My adult children might say yes, but I’d say that’s up for debate.

I don’t like that Fidelity only lets teens invest in its own mutual funds. This limits their ability to evaluate and invest in funds from other fund families that may have better track records or lower costs.

Another concern? Since these are taxable accounts, teenagers might not be aware of the ordinary income and capital gains taxes their transactions may generate. Given that teens generally don’t make a lot of money, their tax bill isn’t likely to rise all that much, but these profits may require them to file their own tax returns — something they might not have to do otherwise. In some cases, parents may be able to report their teen’s earnings on their own tax returns.

I’m also a bit worried that Fidelity doesn’t limit the amount that can be deposited into Youth Accounts, although they recommend capping it at $30,000 per year. I wish the limits were much lower, because there are no controls to keep kids from losing all of their savings trying to score the next GameStop-style payoff. Some commentators have said that the best way for teens to learn the consequences of making bad investment decisions is to get burned by them. But I don’t think this “school-of-hard-knocks” lesson plan is the best approach.

But I think what bothers me the most about these accounts is that teens can start trading without necessarily receiving the education they need to avoid making impulsive or ill-informed decisions. Fidelity offers a lot of educational content, but at first glance they seem to put the onus on parents to make sure their kids go through it first.

How about a Learner’s Permit to Make Youth Accounts Safer?

I don’t like this pass-the-buck approach. After all, we don’t let teens get behind the wheel of a car until they’ve passed a learner’s permit exam. And we don’t let them take the family SUV out on their own until they’ve passed their driver’s license test. Yet, Fidelity seems to be OK with the idea that a financially undereducated 13-year-old could lose all of their savings making bad trading decisions.

That’s why I’d like to see Fidelity, and other companies that plan to roll out similar youth brokerage accounts, implement a “financial learner’s permit.”

Ideally, any teen who wanted to open such an account would first have to take a series of industry-sanctioned online courses covering the basics of investing and personal finance. They would then be tested at the end of each module. Once they passed all of the tests, they would be able to fund their account and start trading. Of course, they might still lose their shirts, but at least they couldn’t use financial ignorance as an excuse.

I’m not holding my breath that this kind of qualification process will happen anytime soon, so the best that I can say about Fidelity’s app is that it may be a safer alternative to the game-day-trading apps I dislike.

In any case, if your teen expresses an interest in investing online, consider imposing your own investment qualification requirements before opening any kind of brokerage account on their behalf. Give them access to the educational content available through your online brokerage or 401(k) plan account, and test them to make sure they understand it. Or, consider having your child speak with your financial adviser, who can recommend additional sources of educational information and explain the investment rules of the road.

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.

Bitcoin recently suffered one of its biggest monthly drops on record in May. The price of the digital asset crashed all the way from a mid-April high over $64,000, to $30,000 by late May – dragging many cryptocurrencies and cryptocurrency stocks down with it. That was followed by a quick rebound to $40,000, and since then, prices have been stuck in the $30,000-$40,000 range.

The volatility in Bitcoin – and by proxy, cryptocurrency stocks – this year has rekindled excitement in retail investors in a way it hasn't since the digital coin last peaked in 2017.

Professional investors, billionaires and even publicly traded companies have maintained a keen interest in cryptos, too. This involvement in both Bitcoin, other cryptocurrencies and blockchain – the secure authentication technology behind digital currencies – are already showing up as a new source of revenue for many companies in mid-2021.

How?

It's partly thanks to the pandemic. COVID-19 helped accelerate a number of digital reforms in companies large and small. "We've seen two years' worth of digital transformation in two months," Microsoft (MSFT) CEO Satya Nadella stated last April when the pandemic was running rampant.

Cryptocurrencies and blockchain have been part of that transformation. The companies utilizing these technologies run the gamut, from traditional financial powerhouses looking to develop their own cryptos, to fintech firms looking to add Bitcoin functionality to their products, to other companies using blockchain to improve their operations.

The past few months have seen an explosion of companies offering Bitcoin as payments, or even the rise of companies holding the cryptocurrency on their balance sheet rather than cash. Since Bitcoin isn't recognized by the government as a cash equivalent, the position has to be repeatedly marked-to-market, causing companies to show big profits or losses depending on the digital currency's price swings.

Bitcoin might not be right for many investors. In addition to not being able to buy it directly through many brokerage accounts yet, it might simply be too volatile for some. "Cryptocurrency investing today is a bit like living in the early days of the 1850s gold rush, which involved more speculating than investing," says John LaForge, Head of Real Asset Strategy at Wells Fargo Investment Institute. The answer? Stocks that leverage digital currencies, but also boast vibrant businesses that would make them worth buying anyway.

Here are seven cryptocurrency stocks (and one fund) that can help traditional investors get at least exposure to this asset class. They might not offer pure exposure to these technologies, but by embracing this growing space, these crypto stocks look poised to deliver additional growth in 2021 and beyond.

Data is as of June 23. Earnings growth rate, profit margin and return on equity provided by Yahoo! Finance.

• Market value: $333.5 billion
• Quarterly earnings growth rate (year-over-year): 1,206%
• Profit margin: 22.8%
• Return on equity – trailing 12 months (TTM): 29.4%

PayPal Holdings (PYPL, $288.12) announced in October a service that would allow users to hold Bitcoin, as well as the Ethereum, Bitcoin Cash and Litecoin cryptocurrencies.

Before the end of the year, Mizuho Securities survey of 380 users showed that, within roughly one month, 17% had already used PayPal to buy or sell the cryptocurrency. Investment firm and hedge fund Pantera Capital wrote in a letter to shareholders that "PayPal and (Square's Cash App) are already buying more than 100% of all newly-issued bitcoins."

"Crypto functionality is now part of Top 5 finance apps," say Piper Sandler analysts Christopher Donat and Crispin Love, who rate PYPL at Buy.

If that 17% figure actually translates across all 392 million PayPal users worldwide, that indicates nearly 67 million people have started holding some amount of wealth in cryptocurrency.

That's a massive figure that only makes Bitcoin more useful as a digital store of wealth thanks to the "network effect" – a concept PayPal understands well from when it was part of former parent company eBay (EBAY).

Allowing users to buy and sell Bitcoin on its platform naturally opens up a new source of revenue for the company. Their business model of collecting a small "toll" for every financial transaction processed should help PYPL expand its bottom line when it begins to apply its fees to crypto transactions in 2021.

In the first quarter of this year, PayPal saw revenue rise 29% year-over-year, and total payment volume jumped 50%. There were 14.5 million new accounts formed, and payment volume was $20 billion higher than expected. The push for incorporating cryptocurrencies was a big reason why.

"We've got a tremendous amount of really great results going on tactically with our crypto efforts," stated CEO Dan Schulman.

As far as cryptocurrency stocks go, Wall Street analysts are upbeat on this one. They collectively believe PayPal will average 24.1% earnings growth annually over the next three to five years. That's reflected in a consensus Buy rating, according to S&P Global Market Intelligence.

• Market value: $108.7 billion
• Quarterly earnings growth rate: N/A
• Profit margin: 2.7%
• Return on equity: 17.4%

Square (SQ, $238.70), another payments company that's known for its card-reading hardware used by small businesses, also made an announcement regarding Bitcoin in October. Namely, that it bought 4,709 bitcoins for $50 million – an investment that represented 1% of total assets as of the end of Q2 2020.

"We believe that Bitcoin has the potential to be a more ubiquitous currency in the future," Chief Financial Officer Amrita Ahuja said in a release. "As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey."

However, Square was already a leader among cryptocurrency stocks, allowing people to use its Cash App to buy, store, withdraw and deposit bitcoins. In fact, the company recently added another crypto feature: Auto Invest, which "allows for dollar-cost averaging from recurring daily or weekly purchases of bitcoin or stocks."

Piper Sandler's Donat and Love note that "we believe this (cryptocurrency) functionality might create a lead for SQ and PYPL that is difficult for other financial services firms to catch."

During the most recent quarter, SQ's Cash App generated $3.5 billion in bitcoin-related revenue, resulting in $75 million in gross profit.

That's a nearly 11-fold rise in revenue year-over-year, and some of the fastest growth numbers the company has reported.

But they're not in a rush. As Square management says, "... our role is to facilitate customers' access to Bitcoin. When customers buy Bitcoin through Cash App, we only apply a small margin to the market cost of bitcoin, which tends to be volatile and outside our control."

The company also allocated another $170 million of its assets to Bitcoin in the first quarter.

The direct investment in bitcoins suggests that cryptocurrencies might play an even larger role for Square and its balance sheet in the future.

• Market value: $457.5 billion
• Quarterly earnings growth rate: 399.1%
• Profit margin: 34.2%
• Return on equity: 15.0%

During Bitcoin's massive run in 2017, JPMorgan Chase (JPM, $151.12) CEO Jamie Dimon called the asset class a "fraud," claiming it is "worse than tulip bulbs," referring to the Dutch tulip bubble burst in the 1600s.

He also said any JPM trader who traded the cryptocurrency would be fired.

Time has marched on, and Dimon still said late last year that Bitcoin is "not my cup of tea." But he is supportive of blockchain technology, and in fact, the bank has created its own cryptocurrency: JPM Coin.

The bank is first looking at a blockchain-run system that can reduce the number of parties and time needed to verify global payments. Currently, some payments can take weeks; better verification technology could reduce that to hours.

Of course, this is one play that might take some time to pan out.

"Trying to find a blockchain investment that will outperform Bitcoin is not easy," says Bryan Courchesne, founder of Digital Asset Investment Management. "Blockchain ventures are highly risky where less than one of a hundred will result in a positive return."

In the meantime, as prices were peaking in April, JPM joined the growing number of old-school banks in climbing on the cryptocurrency craze. The house of Morgan is allowing their clients exposure to cryptocurrencies with an actively-managed Bitcoin Fund, possibly launching as soon as this summer.

Investors willing to wait on one of the most unlikely of cryptocurrency stocks can collect a 2.4% dividend yield on JPM shares, which the analyst community currently says are a Buy.

• Market value: $474.9 billion
• Quarterly earnings growth rate: 108.5%
• Profit margin: 27.7%
• Return on equity: 33.4%

Cryptocurrencies are generated from solving complex algorithms, rewarding those with the hardware to speedily get the job done. Much like gold miners panning for physical gold, with the right equipment, you can grab a bigger share with better tools.

That's part of why Nvidia (NVDA, $762.29) enjoyed a surge along rocketing Bitcoin prices in 2017. As mining bitcoins became more lucrative, it created a rising demand for the company's high-powered processors.

In 2021, while Bitcoin has surpassed 2017 prices and then some, the mania is rising but isn't quite the same ... yet.

"While we have not encountered any signs that increased interest mining is creating additional demand for GPUs, the recent surge in crypto could yield another potential near-term demand driver for makers of graphics chips and is a situation we are monitoring," says Wedbush analyst Brad Gastwirth.

Nonetheless, Nvidia is enjoying some pickup, and the company released new processors in February specifically for use in cryptocurrency mining.

NVDA's GeForce RTX 3060 processor can generate an estimated profit of $3 per day – one of the highest levels in the industry – for miners of Ethereum, another popular cryptocurrency. That might not sound like much. But cryptocurrency mining is a major operation often involving thousands of such processors linked together.

In its fiscal first quarter, Nvidia generated $155 million in revenue from crypto mining cards, and expects that to rise to $400 million in the second quarter. That's as the company's core business in gaming processors continues to grow rapidly as well, up 106% from last year.

Nvidia is hardly the purest of cryptocurrency stocks. But in any gold rush, it pays to be the guy selling picks and shovels. Sweeter fortunes for Bitcoin and other cryptocurrencies should help boost NVDA's bottom line.

• Market value: $101.8 billion
• Quarterly earnings growth rate: 242.6%
• Profit margin: 25.2%
• Return on equity: 60.6%

Another "picks and shovels" play in the digital gold rush, Advanced Micro Devices (AMD, $83.82) has stalled a bit in 2021 following its red-hot run last year. After peaking near $100 in mid-January, shares have since pulled back to trade in the mid-$80s range.

Even with that pullback, analysts' project a long-term earnings growth rate of 27.4%. This is more than robust enough to drive additional gains in the cryptocurrency stock.

AMD, like Nvidia, develops high-performance processors used in a wide array of products, but primarily computers and servers. And like NVDA, Advanced Micro Devices also can benefit from any gains in cryptocurrency mining demand.

In the first quarter of 2021, the company reported a 93% year-over-year jump in revenue. With strong demand for computer hardware for all types of reasons, the company was unable to specifically point to how much of the increase came from that source alone.

But that just underscores how Advanced Micro Devices has plenty of other things going for it. For instance, in late October AMD announced that it would acquire rival Xilinx (XLNX). While shares initially fell on the news, a push since then to all-time highs reflects optimism that AMD will benefit from the M&A move. Shareholders approved the merger in April.

Most analysts tracked by S&P Global Market Intelligence are optimistic toward AMD stock, with 16 calling it a Strong Buy and seven saying Buy. Rounding things out, 13 maintain a Hold rating on the shares, one says Sell and two believe it's a Strong Sell.

• Market value: $5.4 billion
• Quarterly earnings growth rate: N/A
• Profit margin: -24.0%
• Return on equity: -28.6%

MicroStrategy (MSTR, $553.00) founder Michael Saylor is one of the longest-tenured founders in tech, having started the company at the age of 24. The data analytics firm has been a somewhat small player in a tech world dominated by trillion-dollar names.

But shares have surged more than 370% in the past year thanks to the company's aggressive strategy of replacing the cash on its balance sheet with Bitcoin.

MSTR has spent nearly $3 billion buying the cryptocurrency, even taking out convertible debt to do so. And last August, it made a splash as one of the first companies to make such a big, public move into cryptocurrencies

With an average cost around $26,000, MicroStrategy's position is still in the money amid a big pullback for cryptocurrencies.

Saylor is quick to jump on Twitter (TWTR) to announce when the company buys the cryptocurrency's periodic dips, including a simple "I'm not selling," as the price pulled back 50% in May.

While its Bitcoin holdings have made the company far more valuable in recent months, it's also transferred the digital currency's volatility to shares. The company's convertible debt makes this an interesting and somewhat leveraged way to play Bitcoin, with a smallish, thriving tech company behind it as well.

But MicroStrategy is moving full steam ahead. The company's board of directors are moving to be paid in the digital asset. And the Bitcoin section on the company's website feeds directly to the Saylor-run website hope.com, which contains interviews, podcasts and other resources regarding the cryptocurrency.

MSTR is certainly among the cryptocurrency stocks to watch going forward.

• Market value: $59.2 billion
• Quarterly earnings growth rate: 2,313%
• Profit margin: 36.8%
• Return on equity: 54.2%

Coinbase Global (COIN, $226.01) has had a rough ride since going public via a direct listing in the second quarter. COIN was given a reference price of $250 per share, before opening at $381 on April 14. The shares rallied to nearly $430, but closed the session below $329. These struggles on the charts have continued, with COIN down about 31% from its close that day.

Off the charts, the company's business model is a simple one. It's a brokerage firm that connects buyers and sellers of major cryptocurrencies, and collects fees for each trade made.

The recent drop in Bitcoin has brought out the "buy the dip" crowd, which likely means more trading volume, and therefore more revenue and profits for COIN. With Coinbase already profitable on the day it began trading, it's far ahead of many other companies that have gone public – whether through a direct listing or an initial public offering (IPO) – in the past year.

It's no surprise that analysts are picking up on this fact, as well. Goldman Sachs (GS) and J.P. Morgan Securities are bullish on the shares. In late May, the company also announced Coinbase Prime, designed for institutional investors.

"It opens the door for institutions clustering more and more of their services through us," says Brett Tejpaul, Head of Institutional Sales, Trading, Custody and Prime Services at COIN.

The unit will tie together trading, data analytics and custody services. Unlike traditional brokerages, where institutions lead, digital assets are still driven by retail investors. This is a potentially huge market by volume.

And as far as cryptocurrency stocks are concerned, this one's story is likely just beginning.

• Assets under management: $21.9 billion
• Expenses: 2.0%, or $200 for every $10,000 invested

"Bitcoin should be the core position of everyone's digital asset/blockchain allocation," says Digital Asset Investment Management's Courchesne. "It's the only truly decentralized fixed supply asset that is global and will only get more scarce."

But the methods for investors who want to do so via a traditional brokerage account are extremely limited. In fact, there's really only one way to get direct Bitcoin exposure. And it has its flaws.

The Grayscale Bitcoin Trust (GBTC, $27.79) might sound like an exchange-traded fund (ETF), but technically, it isn't.

It works similarly to one. It's modeled on trusts such as the SPDR Gold Trust (GLD), which represent real, physical holdings of the underlying commodity. You can go into your brokerage account and buy shares of GBTC just like you would GLD.

And Grayscale Bitcoin Trust allows you to track the price of the bitcoins it holds, but you can't cash in your shares for actual bitcoins, similar to how most commodity ETFs operate.

GBTC doesn't trade on a major exchange. It trades "over the counter," where it's not required to register with the Securities and Exchange Commission (SEC), though it does.

The biggest concern is found on the fund's provider site itself: "There can be no assurance that the value of the shares will approximate the value of the Bitcoin held by the Trust and the shares may trade at a substantial premium over or discount to the value of the Trust's Bitcoin."

We'll explain.

ETFs typically trade very closely to their net asset value (NAV), meaning what you buy is what you get. However, GBTC can trade at a significant discount or premium, meaning that, depending on the time, you might be buying into Bitcoin for far less, or far more, than it's actually worth.

When Bitcoin prices went parabolic in 2017, for instance, traders piled into GBTC, sending the NAV to a premium of more than 100%. Typically, the Grayscale Bitcoin Trust has traded at a premium.

However, following the steep selloff in Bitcoin prices in April and May, shares ended last month at a 12.8% discount to the value of the Bitcoin that GBTC holds.

When and if a Bitcoin ETF (which could theoretically track the cryptocurrency more accurately) is ever approved, it's possible demand for GBTC could plunge as the costs of an ETF would likely be lower. If that happens, any premium would dry up – in other words, its price would fall even if Bitcoin prices remained elevated. Grayscale Bitcoin Trust's management has discussed converting to an ETF structure when legally able to do so.

However, and especially with the current discount to NAV, Grayscale Bitcoin Trust (and it's pricey 2% expense ratio) remains the best option for investors who want to buy Bitcoin solely within their brokerage account.

To learn more about GBTC, visit the Grayscale provider site.

Once upon a time (I am told), it was common practice to walk into a store and put an item on layaway. You’d put down a deposit, make payments over time and collect your item once you paid it off. But now, a new service has turned layaway on its head. With Buy Now, Pay Later (BNPL), you don’t have to wait to bring home something you pay for in installments. Instead, a third party offers you a loan at checkout to cover your purchase, in some cases with no interest or additional fees. More than one-third of U.S. consumers have used such a service at least once, according to research by The Ascent, a subsidiary of The Motley Fool. And BNPL is the fastest-growing e-commerce payment method globally, says Worldpay, a unit of payments processor FIS.

When shopping online, I’ve noticed BNPL offerings for clothes and shoes, but the most popular spending category for BNPL services is consumer electronics, according to a survey by CouponFollow, a consumer savings engine that markets popular coupons. But these point-of-sale loans are on the increase for everything from furniture to travel. For example, VRBO, the online marketplace for vacation rentals, and travel provider Expedia have partnered with Affirm, one of the largest BNPL services.

The industry is young, and the pandemic has certainly been a catalyst for its growth. Affirm went public in January, and its stock price has more than doubled. BNPL’s market share in North America is expected to triple in the next three years, says Greg Fisher, chief marketing officer at Affirm. Klarna, whose Super Bowl commercial featured actor Maya Rudolph on a mission to buy a fabulous pair of boots, services more than 15 million customers in the U.S., says David Sykes, head of Klarna US. PayPal recently rolled out several new “pay later” products in the U.S., the U.K. and France.

Weigh all the costs. BNPL services offer a way to cover the cost of something you need right away, says Linda Sherry, director of national priorities for Consumer Action. But it’s important to thoroughly vet the service you choose. Keep an eye out for late fees, interest and whether you’ll pay more for the product or service than you would by paying up front.

The services’ interest policies vary. PayPal’s U.S. BNPL service charges no interest on purchases as long as you spend at least $99. Klarna and AfterPay don’t charge interest, either—although, like PayPal’s BNPL service, their payment plans generally have a shorter time line (typically eight weeks). Affirm, however, which bills in three-, six- or 12-month installments, charges anywhere from 0% to 30% interest on purchases, depending on your credit. Many of these services check your credit history in order to qualify you for the loan.

Even if the price is the same, breaking up payments can make a big purchase seem cheaper, which can tempt you to overspend. Also bear in mind that if you need to return an item, you might end up waiting longer for a refund than if you had paid in full up front. With some services, any interest you pay is non­refundable. And though making BNPL payments on time won’t help you build credit, missing payments could hurt your credit score.

I love finding good deals, but BNPL feels like a perfect invitation to live above my means. So even though I would love to book a VRBO in Aspen for my 24th birthday and pay it off later, this Gen Zer/cusp millennial is going to save for 25 instead.

The price of bitcoin was already soaring when Tesla announced in February that it had bought $1.5 billion worth of the digital currency, sending its value climbing higher. The electric-vehicle maker said it would soon accept bitcoin as payment for its products, too. But in truth, Tesla was a tad late to the party.

Several well-known firms had already embraced bitcoin in one way or another. Massachusetts Mutual Life Insurance, a 170-year-old insurer, bought $100 million worth of bitcoin in late 2020 for its general investment accounts. MicroStrategy, a business services company, has been buying millions in bitcoin, which represents the majority of its cash reserves. And Mastercard and PayPal have each said customers will soon be able to use bitcoin to pay for purchases through their respective networks. All told, demand has driven up the price of the cryptocurrency by nearly 450% over the past 12 months. Its market value is just under $1 trillion. (Returns and data are through March 5.)

Does that mean it’s time for regular folks to buy bitcoin? Not necessarily. There are pros and cons to buying it, and its recent popularity doesn’t erase its drawbacks, whether you view it as an investment or as a currency that you can use to buy things.

What is bitcoin? The 11-year-old cryptocurrency was the first of its kind. It gets its name from the technology behind it—every transaction is encrypted by computer code, known as blockchain technology, which eliminates the need for a middleman or a central bank. Ethereum, bitcoin cash (a spin-off of the original bitcoin) and litecoin are other well-known e-coins.

What’s driving the price? There is a finite supply of bitcoin. Only 21 million tokens will ever be made, and nearly 19 million bitcoins are already in circulation, so there are fewer than 3 million left to be created. And the rules around how the tokens are created—they’re awarded to bitcoin “miners” who solve complicated math problems—along with other restrictions mean a dwindling number of tokens will be issued in the coming years. The final bitcoin will be minted more than 100 years from now, in 2140.

Such scarcity is driving demand, says Tom Jessop, head of digital assets at Fidelity Investments. The brokerage and investment firm launched a passively managed bitcoin fund with a minimum $100,000 investment requirement, targeted at institutions. Since then, Fidelity has seen a lot of interest from a diverse group of clients, including hedge funds, registered investment advisers, pension and endowment funds, and corporate clients.

Will other digital assets displace bitcoin? Scarcity and increased demand could help bitcoin stay dominant. Yassine Elmandjra, a cryptocurrency analyst at Ark Investments, believes bitcoin will capture the lion’s share of the market for digital assets over time. “There may be room for two to five additional currencies that capture 25% to 35% of the total market share,” he says.

Is bitcoin a good investment? It has been over the past 12 months. But some in­vestment professionals still view the virtual currency skeptically, including Matt Andrulot, executive director of research at Verdence Capital Advisors, an advisory firm for ultra-high-net-worth investors, in Hunt Valley, Maryland. “It’s volatile and speculative,” he says.

He’s right about the volatility. In just two weeks in January, bitcoin lost 25% of its value. During the pandemic sell-off in 2020, the price of bitcoin fell 49% from its peak to its trough (the S&P 500 index, by contrast, dropped 34%). And few holders are likely to forget its 83% fall between December 2017 and December 2018. Because bitcoin doesn’t generate any cash flow or earnings—and never will—its price is driven purely by demand, so it’s speculative. “Be prepared to lose the entirety of your principal,” says Thomas Stapp, a certified financial planner in Olympia, Wash.

That said, bitcoin could still have a small place in an investor’s portfolio. But given the sky-high volatility, it should take up no more than 1% to 3% of your assets, say many advisers. Limit your investment to an amount you can afford to lose, says Leo Marte, a certified financial planner in Huntersville, N.C. “That kind of mind-set will bring you to the right allocation for you.”

If you do invest, consider it exposure to an “alternative” asset class. Traditional alternative investments, such as gold or a basket of commodities, offer your portfolio diversification from stocks or bonds. Many investors hold gold, for instance, as ballast against market downturns or to hedge against inflation. Bitcoin’s unique characteristics make it more commodity-like than stock- or bond-like. In fact, the U.S. Commodity Futures Trading Commission considers virtual currencies to be commodities, and therefore subject to oversight under its authority.

On paper, bitcoin has superior properties as a store of value compared with gold. It’s scarce because of the finite supply; by contrast, gold miners regularly find new deposits. Bitcoin is portable and easily stored; in that regard, 100 gold bars might prove onerous. Plus, bitcoin is divisible to eight decimal places and can be easily transferred to others. However, it’s also three or four times more volatile than gold. But the more acceptance grows, says Fidelity’s Jessop, “the more bitcoin gets to become a superior store of value.”

Will bitcoin take off as a form of payment? There’s a lot of promise but little in practice so far. “You can’t go to Starbucks and buy a cup of coffee,” says Stan Kiang, director of exchange-traded funds at Aberdeen Standard Investments. “When that happens, I’ll be a believer.” Bitcoin is gaining some momentum on that front, though, as people buy crypto assets and either use them directly or convert them to traditional currencies to spend. The trend is “unmistakable,” says Raj Dhamodharan, head of Mastercard’s digital assets, blockchain products and partnerships, in a recent company blog post.

Spending bitcoin can involve some rigamarole. For a payment to go through the Mastercard network for a Starbucks latte, say, the dollar price would be translated into digital assets, then those digital assets would be exchanged for dollars at one of Mastercard’s crypto-payment platform partners (BitPay, Wirex or LVL) before the purchase is transmitted on the Mastercard network.

There may be tax implications, too. Because the Internal Revenue Service views digital currencies as property, they are subject to capital gains taxes. If you buy a cup of coffee using bitcoin, it’s akin to selling an asset to do so—you may have to report your cost basis and any potential long- or short-term gain or loss on the digital currency. That would make paying with bitcoin “challenging,” says Fidelity’s Jessop.

How can I buy bitcoin or invest in it? To buy the actual tokens, you’ll have to open an account at an exchange; Coinbase is the biggest. Digital assets in Coinbase accounts aren’t covered by any kind of insurance, but U.S. dollars in the accounts are FDIC-insured, up to $250,000. There’s an easier path, but it’s pricey. Grayscale Bitcoin Trust (symbol GBTC, $44, expense ratio 2.0%), an investment fund of sorts, holds actual bitcoin tokens. “Each share is backed by bitcoin,” says Rayhaneh Sharif-Askary, director of investor relations and business development at Grayscale.

The trust is a bit of a cross between a closed-end fund and an exchange-traded fund. It’s easy to buy and sell in a brokerage account. But you should be mindful of the premium you’ll pay: Over the past five years, the fund has traded at an average 38% premium to its net asset value, according to data provider Y Charts. But in volatile times past (namely 2017), the premium has reached 133%.

Over the past 12 months, GBTC gained 419%. That beat the S&P 500, of course, which rose 29%, but the bitcoin trust experienced three times the volatility, too.

There are three ways to receive your $1,400 third stimulus check (if you're eligible to receive one). You could have it deposited directly into your bank account, you could receive a prepaid debit card, or you could receive a paper check in the mail. Over 100 million Americans have already received electronic third stimulus payments from the IRS via direct deposit. About 5 million debit cards have been sent, and the IRS has already mailed paper checks over 15 million more people.

If you end up getting a paper stimulus check, you can either cash it or deposit it into your existing bank account. But what if you don't have a bank account—what are your options? Assuming you don't want to open a bank account with your stimulus check, here are a few other ideas to consider. (Use our Third Stimulus Check Calculator to see how much you should get.)

Since government checks are considered "safe," some banks will cash stimulus checks for non-customers—but you might have to pay a fee. While many banks are waiving fees for stimulus checks, it's best to call ahead to make sure. If there is a fee, it could run anywhere from $5 to over $20. Also make sure you bring at least two photo IDs with you (e.g., driver's license, passport, military ID, etc.).

The Federal Deposit Insurance Corporation (FDIC), which helps regulate banks and insures bank deposits, has encouraged financial institutions to work with people impacted by the coronavirus crisis, including by waiving fees and easing restrictions on cashing non-customer checks. So, hopefully, there's a bank (or credit union) near you that will cash your stimulus check without a fee.

Some large retailers will cash your stimulus check for you. Expect to pay a fee, though. Walmart, for example, will cash a government check of up to $5,000. Their fee is $4 for a check up to $1,000; $8 for a check above that amount. You can also have the amount of your stimulus check added to a Walmart "MoneyCard," which is a prepaid debit card.

Your neighborhood grocery store might cash your check, too. For example, if you shop at Kroger, Dillons, King Soopers, Smith's, Fry's Food, or another affiliated grocery store with a Money Services counter, you can cash your stimulus check for a small fee (restrictions may apply). Other grocers across the country cash government checks—so touch base with your local store to see if they offer this service.

PayPal has a service that lets you cash checks and have the amount credited to a PayPal "Cash Plus" account. You can do it all on your phone or other mobile device using the PayPal app. Just take a picture of the check and send it for approval. You pay a fee if you want the money credited to your account immediately, but there's no fee if you can wait 10 days. And now for the good news—PayPal is waiving the fees for paper stimulus checks, so you can get the money into your PayPal account right away for free.

Convenience story giant 7-Eleven also has a debit card program that you can use. Anyone with a Trans@ct Card can cash a check and apply the funds to your debit card account using a smart phone. Undisclosed fees may apply, though (see the cardholder agreement for details).

Netspend, Ingo Money, Venmo, and others provide similar services that let you cash a stimulus check using your phone. Again, make sure you understand the fees before you sign up.

Every city and even many small towns have cash-checking businesses that will handle a stimulus check for you. However, there's a good chance you'll pay higher fees at these stores than if you use one of the other options discussed above. For some people, though, the extra cost is worth it because of the store's hours, location, or additional services—and you don't have to have a pre-existing relationship with them.

Some states limit the fees charged by check-cashing businesses. Pennsylvania, for example, limits the charge for cashing a government check to 1.5% of the check's face value (or $21 for a $1,400 stimulus check). In California, the maximum fee for cashing a government check is $3. In other states, like Michigan or Texas, check-cashing businesses are not regulated. As a result, there is no limit on the fees businesses in these states can charge for their services.

When you’re looking for a rewards credit card, it makes sense to review your spending patterns and choose one that offers a high rate of cash back or points in the categories in which you spend the most. But if your top spending categories tend to vary, a new card from peer-to-peer payment service Venmo is a compelling option: It automatically rewards you in the categories with the highest spending each month.

The Venmo Visa Credit Card pays you 3% cash back in the category in which you spend the most during a statement cycle (the categories include groceries; gas; dining and nightlife; travel; bills and utilities; health and beauty; entertainment; and transportation). You get 2% back in the category in which you spend the second-highest amount and 1% back on other spending.

No spending limit applies the first year you have the card. Each year after that, combined spending in the 2% and 3% categories is capped at $10,000, with purchases earning 1% after you hit the limit. The card was recently offered to select users of the Venmo app and will become available to all U.S. users in the first quarter of 2021.

Cash back is automatically added to your Venmo account, and you can transfer it to your linked bank account or debit card. You can also use it to pay your credit card bill, other Venmo users or merchants that accept Venmo at checkout.

More rewards from Chase. Chase has closed applications for its Chase Freedom card and introduced the Chase Freedom Flex Mastercard. Like the previous card, Flex offers 5% cash back on up to $1,500 spent in a category that changes each quarter (2021 categories were unavailable at press time; the 2020 fourth-quarter category included Walmart and PayPal purchases). But all year, Flex also provides 5% back on travel bookings made through Chase, 3% back at restaurants and 3% back at drugstores. Other spending gets 1% back. The card recently offered 5% back on up to $12,000 in grocery store purchases the first year, too. Rewards are earned as points, which you can exchange at a rate of a penny apiece for cash, gift cards or travel.

The old saying goes: When America sneezes, the world catches a cold. As the world’s largest importer – and holder of its largest trade deficit by a country mile – the United States is the planet’s indispensable economy. And emerging-markets stocks, with their dependence on foreign capital and high concentration in cyclical and commodity sectors, are particularly vulnerable to weakness in the U.S.

There’s nothing quite like a good trade war to give investors the jitters. But it’s not just the ongoing spat between Presidents Donald Trump and Xi Jinping that has investors unnerved. U.S. economic growth appears to be topping out for this cycle, and issues in the American market have a way of spilling across borders.

When western investors go into de-risking mode, they tend to throw out the baby with the bathwater, dumping high-quality emerging-markets stocks in a flight to cash. But in doing so, they often create fantastic buying opportunities.

Jeremy Grantham and his colleagues at Boston-based asset manager GMO are not known for being wide-eyed Pollyannas. They’re sober value investors best known for calling the last two major bear markets in 2000 and 2008. Perhaps not surprisingly, Grantham & Co. see U.S. stocks performing poorly over the next seven years, losing 3.7% per year. But interestingly, GMO expects emerging-markets stocks to return 5.2% per year over the next seven years. Even more interestingly, they see EM value stocks returning 9.8% per year.

Today, we’re going to look at 10 strong emerging-markets stocks that might give you a bit of heartburn, but ultimately should weather the trade war and reward new money. Most depend heavily on domestic EM consumers rather than on exports or trade flows, and all should be considered potential buys on any weakness in the coming months.

Data is as of Sept. 3.

• Country: China
• Market value: $398.4 billion

We’ll start with Tencent Holdings (TCEHY, $42.33), one of China’s leading technology conglomerates and, at nearly $400 billion, one of the largest emerging-markets stocks you can buy.

Tencent is a little hard to define and has no exact Western equivalent. It’s part-Facebook (FB), part-PayPal (PYPL), and part-Netflix (NFLX) with elements of Alphabet (GOOGL) and Activision Blizzard (ATVI) sprinkled in. You can consider Tencent a one-stop shop for all things related to Chinese mobile services.

Its most important product is the mobile chatting app WeChat, which is similar to Facebook’s WhatsApp (though light-years ahead of it in terms of features). In addition to the chat, audio phone calls and video conferencing you might expect from such an app, WeChat also is a leader in mobile payments via WeChat Pay and serves as an e-commerce platform.

Importantly, Tencent has sparse exposure to trade-war risk. A deep recession in China could mean lower transaction-based revenues for WeChat Pay. But most of Tencent’s revenues come from “disposable luxuries” such as smartphone games. Interestingly, while people might cut back on things such as big vacations and expensive dinners if the economy hits the skids, they tend to hang on more tightly to small, disposable luxuries. The somewhat addictive nature of video games even resembles another pair of consumer goods that do well in recessions: tobacco and alcohol.

Tencent is down about 30% from its old 2017 highs. There’s no guarantee it resumes an uptrend tomorrow, but it’s certainly a stock to buy on dips.

• Country: China
• Market value: $429.5 billion
• Alibaba Group (BABA, $172.41), the creation of billionaire Jack Ma, is another Chinese tech company that is a little hard to define. It’s popularly thought of as China’s equivalent of Amazon.com (AMZN), especially given its sheer size and status as an innovator. But it functions more like eBay (EBAY), serving as a middleman between buyers and sellers online.

Interestingly, its business model also has shades of Alphabet’s Google, as sellers pay to be ranked in the company’s search engine.

A recession would potentially hurt all retail companies, even innovators such as Alibaba. Lower spending is lower spending. But it’s during difficult times that great innovators really get to show what they’re made of.

And importantly, Alibaba is a domestic play on the Chinese consumer that should be somewhat insulated from the trade war. “If U.S. goods become too expensive due to tariffs, Chinese consumers can shift to domestic producers or imports from other parts of the world,” Joseph Tsai, Alibaba executive vice chairman, said earlier this year. “In terms of our international expansion, the world is a big place.”

At current prices, Alibaba shares are 17% below their old 2018 highs.

• Country: China
• Market value: $43.0 billion

We’ll add another Chinese retailer to the list: JD.com (JD, $29.45).

JD.com’s model most closely resembles that of Amazon.com in that it is primarily an online business-to-consumer retailer. Interestingly, JD.com collaborates with Amazon’s archrival Walmart (WMT) in a number of overlapping partnerships. Walmart sold its Chinese e-commerce business to JD.com in 2016 in exchange for equity in the company. And last year, Walmart and JD.com invested $500 million together in online grocery delivery company Dada-JD Daojia.

JD.com’s corporate ties don’t end there. JD also actively partners with fellow Chinese internet giant Tencent, which holds a 20% stake in the e-tailer.

JD shares have taken a pounding of late and now trade at more than 40% below their old 2018 highs, at prices first seen in 2014. And a hard landing in China would likely mean more short-term downside to JD.com (not to mention other emerging-markets stocks).

But if you believe in JD.com’s staying power as a leading Chinese e-retailer, then buying any dips makes sense.

• Country: China
• Market value: $35.7 billion

While not all emerging-markets tech stocks have obvious Western equivalents, Chinese search leader Baidu (BIDU, $102.56) certainly does. The Baidu search engine is essentially China’s Google.

But beyond this core business, Baidu also has a successful smart speaker business and a video streaming service, and it’s a leader in driverless car technology.

So far, Baidu has proven to be a lot more vulnerable to an economic slowdown than its peers. Baidu gets the vast majority of its earnings from online advertising, and corporate advertisers have been scaling back. Baidu’s revenues are expected to be flat or slightly down this year.

Baidu’s shares have been in a tailspin so far throughout the trade war, dropping nearly 60% since last July. Thus, buying right this second is attempting to catch that proverbial falling knife.

All the same, BIDU stock trades for a meager eight times trailing earnings. So it might be worth taking a small position once the stock stabilizes, then averaging in over the coming months.

• Country: China
• Market value: $16.4 billion

Let’s take a look at one last Chinese stock: Yum China Holdings (YUMC, $43.64).

Yum China is, as it sounds, the Chinese spinoff of America’s Yum Brands (YUM), and it owns, operates and franchises KFC, Pizza Hut and Taco Bell restaurants in China. The company also controls the Little Sheep hot pot restaurant chain, the East Dawning Chinese fast-food chain, and the COFFii & JOY coffee chain.

Fast-food restaurants have a different clientele in China; they are more of a middle-class destination than a working-class one. And a deep recession in China could prompt more Chinese diners to eat at home. But fast food has proven to be recession-resistant in the developed world, and it’s not unreasonable to expect Yum China to emerge from the trade war fully intact.

Yum China’s stock price has traded sideways for most of the past two years. The shares, while not necessarily dirt-cheap, certainly are not expensive for a fast-food conglomerate with a collection of some of the most recognized brands in the world.

• Country: Mexico
• Market value: $4.9 billion

Let’s step away from China for a moment and into other emerging-markets stocks.

While China is the focus of the trade war at the moment, it’s worth noting that it was Mexico in the tariff crosshairs not that long ago.

Mexican assets have been painful to own in recent years, as the peso has plummeted in value. Since 2008, the price of the peso in dollars has been cut in half. Add to this a difficult economy, the election of a controversial populist president in Andrés Manuel López Obrador, and the ongoing spat with the United States over the migrant crisis, and it’s easy to see why Mexican stocks have had a hard time catching a bid.

One Mexican stock worth considering is Grupo Televisa (TV, $8.53), the leading Spanish-language media and content company. While you might probably associate Televisa with overly dramatic telenovelas (Spanish-language soap operas), Televisa’s programming includes everything from news to live sports.

While ad revenues may decline in a prolonged global slowdown, Televisa is almost entirely free of trade-war risk.

Shares have been in almost continuous free fall for years and are now nearly 80% below their 2015 highs in dollar terms. So again, you want to wait to see signs of stabilization before pouring in. But with analysts calling for a significant rebound in profits next year, the time to buy TV is nearing.

• Country: Mexico
• Market value: $47.3 billion

Another Mexican stock worth considering is mobile giant America Movil (AMX, $14.33), the leading mobile service provider in Latin America. Operating primarily under the brand name Claro, America Movil is the largest mobile network operator in the world in terms of subscribers outside of China or India. It has roughly 276 million mobile subscribers across 25 countries in the Americas and Europe.

There’s nothing more essential to modern living than a smartphone. You can live without a TV and even a home computer. But it’s nearly impossible to function in the modern world without a smartphone, and America Movil has a dominant position in one of the few areas of the world where growth still is possible.

Across Latin America and other emerging markets, most adults already have a basic smartphone. But many still use pay-as-you-go or prepaid plans rather than contract plans. As Latin consumers continue to command higher incomes, they will consume more data and mobile services. And America Movil will be there to deliver them.

AMX shares have been trending lower for the past decade, have been cut in half since 2010 and are down by about a quarter since early 2018. But the stock has been relatively stable in 2019 and now trades for about 12 times expected 2019 earnings.

• Country: India
• Market value: $47.8 billion

Nearly all of the trade war tit for tat has focused on manufactured products and agricultural goods. Relatively little has focused on services, which is good news for Indian technology outsourcer Infosys (INFY, $11.28).

Indian stocks haven’t performed particularly well this year, as the Indian economy has shown signs of weakness. It got bad enough for the Reserve Bank of India cut interest rates for the fourth time this year in August. The benchmark rate is now at its lowest level in nine years.

If the weakening economy weren’t cause enough for concern, there also is a big regulatory question mark. The government increased its tax surcharge on foreign investors back in July, only to reverse course and lower it a month later.

None of this inspires much confidence in the market, of course. And unfortunately, this kind of governmental uncertainty is a hallmark of many emerging-markets stocks.

Still, Infosys has managed to buck the trend and push higher. The shares are up nearly 20% year-to-date and more than 50% over the past two years.

With the labor force in the United States the tightest it has been in decades, demand for outsourced technology and consulting won’t be slacking anytime soon. Infosys is a good way to play that trend.

• Country: South Africa
• Market value: $100.9 billion

We’ve covered China, India and Latin America, but South Africa has one of the best-developed stock markets among emerging economies. The South African economy tends to be dominated by mining and commodity-related businesses, but the single-largest stock in the South African exchange by market value is a technology holding company: Naspers (NPSNY, $46.65).

The biggest reason for Naspers’ large market value relative to the size of the South African market is its large position in China’s Tencent. Incredibly, Naspers’ 31.2% stake in Tencent, at $124 billion, is worth more than Naspers’ entire market value. At today’s prices, when you buy a share of Naspers, you’re essentially getting Tencent at a discount and getting the rest of Naspers’ sprawling portfolio of technology companies – which include online food ordering and delivery marketplace Delivery Hero, Latin American mobile commerce and content platform Movile, and global learning marketplace Udemy – for free.

Not bad!

Naspers isn’t oblivious to the fact that its shares are worth more dead than alive, and the company has been looking for ways to unlock that value. Naspers plans to spin off part of its stake in Tencent, along with some other assets, into a separate company to be named Prosus and traded in Amsterdam.

If you like Tencent, it would seem ridiculous not to like Naspers.

• Country: Turkey
• Market value: $5.1 billion

Turkish telecom Turkcell (TKC, $5.83), our final pick, is admittedly more aggressive than the other emerging-markets stocks on the list. And while it seems insulated from any trade-war issues, it does have other dangers to be aware of before investing.

With all respect to Turkcell’s management team (which by all accounts has a good reputation in the industry), you have to have nerves of steel to buy this stock. Turkey’s political situation has become complicated in recent years, which hasn’t helped investor confidence. Turkish President Recep Tayyip Erdoğan came to public office as an economic reformer but is looking more and more like an authoritarian populist these days. His pressure on the Central Bank of the Republic of Turkey partly explains why the lira has been sliding so aggressively of late, and his decision to buy Russian military hardware over the objections of the United States and NATO raises the threat of sanctions.

Add to this Turkcell’s own quirky history – the company suffered a shareholder dispute that led to the dividend being suspended for five years between 2010 and 2015 – and you can see why shares have floundered. Turkcell’s stock price has declined by nearly two thirds over the past five years.

But beneath the scary headlines, Turkey is one of the most promising long-term investment destinations you’re ever likely to find. It’s strategically important as a bridge between Europe and Asia, it sits next door to the largest trading bloc in the world in the European Union, and it has a large, diverse and entrepreneurial economy. Unlike China, Turkey isn’t large enough to be considered a threat to Western economic dominance, but it is large enough to be taken seriously as an important trading power. And in Turkcell, you can get access to the growing spending power of the Turkish consumer at crisis-caliber prices.

Yes, it’s a scary stock. But as Warren Buffett has repeatedly said, the secret to investing success is being greedy when others are fearful. And for the intrepid investor, Turkcell offers the opportunity to buy a leading mobile service provider in a promising developing market while it’s on sale.

One of the greatest obstacles to share price appreciation is mediocre management, supported by a complacent board. But activist investors offer a solution, targeting poorly managed companies and lobbying them for changes they think will sweeten the share price.

Activist investors look for issues such as weak corporate governance or executive compensation schemes when hunting new stocks to buy. They often then take a significant stake in the company and push for things such as asset sales or the return of excess cash to shareholders. Companies slow to implement change may be threatened with “proxy fights” that result in corporate officers and directors being forced from their seats.

These activist investors sometimes create big windfalls for shareholders. For instance, Carl Icahn pushed eBay (EBAY) to spin off its PayPal (PYPL) business in 2015; since then, PayPal has tripled in value. Activist David Einhorn pressured Apple (AAPL) in 2013, urging the iPhone maker to return excess cash to shareholders. Since fiscal 2012, Apple has returned more than $350 billion in the form of buybacks and dividends, with the vast majority of that coming since 2013.

Here are 17 stocks to buy if you believe in the ideas of their activist investors. Some have just recently come under siege, others are in the middle of proxy fights, and still others have already made truces and have implemented changes to unlock value. But all of these stocks carry significant risk – after all, activist investors typically target struggling companies, and no turnaround is a slam dunk. So invest in small amounts, with funds from the portion of your portfolio dedicated to aggressive holdings.

Data is as of May 1.

• Market value: $1.4 billion

Cosmetics maker Avon Products (AVP, $3.15) dodged a 2018 proxy fight – a fight to convince shareholders to vote for changes, sometimes including the installation of new leaders – with Barington Capital by agreeing to put the investment firm’s top executive on its board. Barington, which still has almost 9% of its portfolio invested in AVP shares, already had successfully pressured Avon to replace its CEO and has been lobbying for the sale of the company.

Avon appears to be inching toward that goal.

Shares rallied in March after a Wall Street Journal report claimed Avon was considering a buyout offer from Brazilian rival Natura Cosmeticos SA. Like Avon. Natura sells its cosmetics through a direct sales force. Natura is reportedly interested in acquiring Avon’s privately held North American business and the publicly traded business that operates internationally. Natura Cosmeticos confirmed in a late April statement that it was indeed in talks, and Reuters reported that one person familiar with the talks said they were in advanced stages.

If so, that will be a nice bump for shareholders. If not, the company’s operations are a mixed bag.

On one hand, Avon suffered its worst trading day in almost two years in February after its fourth-quarter results disappointed. Analysts cited challenges in modernizing Avon’s direct-sales model and the loss of many direct-sales reps. The company also has been criticized for failing to develop a successful online strategy.

But Avon has launched a new content tool to support e-commerce growth, and it’s also working on streamlining its business. In September 2018, it announced it would cut about 100 positions and sell one of its New York facilities as part of a broader streamlining effort. AVP also has divested a manufacturing facility in China.

• Market value: $2.2 billion

Three activist funds are threatening a proxy attack on home goods retailer Bed Bath & Beyond (BBBY, $16.30) to force the ouster of the company’s entire 12-member board. They claim that Bed Bath & Beyond has been too slow to adapt to changing consumer tastes, resulting in eight straight quarters of declining same-store sales, and has allowed cost increases to steadily erode margins.

Bed Bath recently said that five of its directors will step down. Ancora Advisors, Legion Partners and Macellum Capital Management recently wrote more than 150 pages explaining why shareholders should vote in their set of nominees for the newly opened seats. The outsiders want Bed Bath & Beyond to focus on its core business and consider shedding non-core brands like Buy Buy Baby and Cost Plus World Market. All of their initiatives should produce more than $5 in earnings per share within three to five years, the activist investors say.

The company’s shares hit 20-year lows during the fourth-quarter market selloff last year, though that was also prompted by a miserable report in September that included flat revenues, declining same-store sales and a profit miss. Standard & Poor’s downgraded the retailer’s credit rating to junk status. Analysts piled on with bearish opinions.

Bed Bath & Beyond has rebounded by 40% in 2019, however, with much of that coming on activist investor interest. But a January announcement that the company was ahead of schedule in implementing a profit improvement plan also put a jolt into shares.

Raymond James analyst Bobby Griffin in March upgraded his rating on the stock to “Strong Buy” and commented that, while his analysis is based on a takeout scenario, many of the factors that make Bed Bath & Beyond an attractive takeover candidate also hold true for the activist case. Morgan Stanley analyst Simeon Gutman reiterated an “Underperform” rating on the stock but believes the recent activist efforts have set a floor for the share price.

• Market value: $1.8 billion

Barington Capital also is involved with restaurant chain operator Bloomin’ Brands (BLMN, $19.68), whose brands include Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse and Wine Bar. The company owns or operates approximately 1,500 restaurants across 48 states.

Barington wrote more than a year ago that it wants changes at Bloomin’, among them selling or spinning off some of its chains, as well as improvements to “enhance the guest experience.”

Barington followed up in October, pushing the company to hire an independent chair. In March, Bloomin’ said it was promoting its CFO to CEO and moving its former chief into the board’s executive chair slot – but said it was a planned move unrelated to Barington’s saber-rattling.

BLMN shares did surge in February after the company topped revenue and profit estimates while improving their same-store sales, but the stock still is underperforming the market, up almost 11% to the market’s 16%.

And during its March Analyst Day, the company shared financial performance targets that include 1.5%-2.0% comparable stores sales growth, 10%-15% annual shareholder returns and adding 20 to 40 new restaurants per year.

How effective Barington will be largely hinges on Bloomin’s ability to make its own improvements and turn shares around first – in a way, that’s a win-win, as it makes it more likely for shareholders to get positive change one way or another. But if Bloomin’s initial efforts are unsuccessful, the stock could get much cheaper before it turns around.

• Market value: $11.5 billion

Iconic soup and snack maker Campbell Soup (CPB, $38.32) ended a proxy fight with hedge fund Third Point at the end of 2018.

Third Point, led by famed activist investor Daniel Loeb, accused the iconic soup purveyor of misleading investors about the qualifications of board members – three heirs of Campbell Soup founder John Dorrance serve on the board and together control 37% of the company’s stock – and being vague about its CEO search. Third Point also complained that management’s strategic plan lacked transparency and pushed for the sale of some units.

Under pressure, Campbell added two new independent directors and gave the activist firm input on a third director who will be added at the May annual meeting. Third Point also persuaded Campbell to hire a new CEO who previously ran Pinnacle Foods and has deep food industry experience.

Campbell initially was targeted because of declining organic sales, ill-advised acquisitions that loaded the company with debt and the abrupt departure of its CEO in 2018.

Although Campbell’s sales are growing at double-digit rates due to contributions from acquisitions, organic sales are falling as a result of pricing competition. Earnings also have been hurt by rising interest expense and promotional spending.

Third Point recently persuaded the company to sell its Garden Fresh Gourmet business, and CPB is in the process of divesting its Campbell Fresh and Campbell International businesses. The sale proceeds will be used to reduce debt. So far, shareholders like what they have seen, driving shares up 14% in 2019 in steady order.

• Market value: $1.4 billion

Activist hedge fund Starboard Value didn’t sugarcoat its message to online auto shopping site Cars.com (CARS, $20.38). In December 2018, after roughly a year of prodding Cars.com, Starboard criticized the company for a continuous trend of customer losses and revenue declines, mounting expenses and a pattern of missed expectations and downward guidance.

Starboard pushed the company to set realistic financial targets and devise a plan for meeting them. Starboard thought Cars.com should be able to generate roughly $4 per share of adjusted free cash flow by 2020 and warned of more aggressive action if signs of progress weren’t seen, including management changes or a forced sale of the business.

While Cars.com’s initial response said very little, the company in January said it was considering strategic alternatives that could include the sale of the business. Analyst outfit Benchmark Capital thinks Cars.com could fetch prices in the high $20s or low $30s from a buyout deal, while analysts from Barrington Research thinks it could sell for $40 to $45. Research believes the sale price could go as high as $40-45 per share.

Barring a buyout, Cars.com missed slightly on revenues in the fourth quarter of 2018, but posted adjusted earnings that were almost twice analyst estimates. Barrington Research analyst Gary Prestopino saw signs of progress in rising average monthly unique visitors to the firm’s website and increased monthly revenues per dealer, which he felt justified his “Outperform” (equivalent of “Buy”) rating on the stock.

• Market value: $26.2 billion

Starboard Value also reached out to Dollar Tree (DLTR, $109.65), in early January, to argue for changes. The activist wants the discount retailer to test a multi-price point strategy under the Dollar Tree banner and turn around its underperforming Family Dollar chain, which has consistently been a drag on the company’s valuation since it was acquired in 2015.

Starboard thinks Dollar Tree could be worth $150 per share if its recommended changes are implemented.

Dollar Tree announced plans in March to close 390 Family Dollar stores and renovate another 1,000 locations. The renovated stores will sell alcohol and have a wider merchandise selection, with some also offering more fresh and frozen foods. It’s not only scaling back, however. The company plans to open 350 new Dollar Tree stores and 200 new Family Dollar stores in 2019.

Dollar Tree also has agreed to the price-point tests, and Starboard said in early April that it’s withdrawing its board nominations and ending its proxy fight.

Telsey Advisory Group analyst Joe Feldman recently upgraded his rating to “Outperform” and raised his DLTR price target to $117 after a meeting with management persuaded him that Dollar Tree would return to earnings growth in the second half of fiscal 2019. Also in March, UBS analyst Michael Lasser increased his price target to $120 while maintaining his “Buy” rating.

• Market value: $795.1 million

Nashville-based Genesco (GCO, $43.33) sells footwear and accessories through more than 1,500 retail stores across North America, the U.K., Ireland and Germany. The company’s best-known brands in the U.S. market are Journeys, Schuh and Johnston & Murphy.

Genesco was targeted by activist investors Legion Partners and 4010 Capital because of weakening results from its Lids hat business, which activists said were dragging down overall performance.

The company reached a “cooperation agreement” with Legion and 4010 about a year ago. Genesco agreed to elevate two new independent directors to the board, sell the Lids business and return all or most of the sale proceeds to investors through share repurchases or a special dividend. Lids indeed was sold in December for $100 million. Genesco said in December that it would use the cash proceeds for share repurchases, boosting the existing buyback authorization to $125 million.

So far, things look better from an operational standpoint. Genesco increased net sales from continuing operations by 3% in the year ended February 2019 and grew comparable-store sales by 5% – the biggest increase in three years. Adjusted earnings per share jumped 23% year-over-year. The stock hasn’t caught up yet, though, up just 6% over the past year versus about 10% for the S&P 500.

• Market value: $4.2 billion
• Mattel (MAT, $12.04) owns iconic brands like Barbie, Fisher-Price, Hot Wheels, Thomas & Friends and American Girl.

Southeastern Asset Management took a 10.25% stake in the toymaker in late 2017 after shares plummeted – the result of a lousy earnings report and a downgrade in Mattel’s debt to junk status.

Since then, Southeastern and other activists have convinced Mattel to add a former Lego executive to its board, bringing badly needed toy industry experience, and to hire a new CEO, Ynon Kreiz, who has television and film industry experience. Kreiz plans to strengthen Mattel’s brands by releasing a live-action Barbie film in 2020, developing 22 animated and live-action TV shows based on Mattel’s characters and partnering with MGM to produce films based on the American Girl and View-Master toy lines.

Kreiz also is targeting a $650 million reduction in manufacturing costs to boost margins.

Mattel has been a roller-coaster stock in 2019, down 14% over the past year but up 20% so far through the first four months of 2019. That included a massive surge in February on strong fourth-quarter earnings – then a huge boomerang move lower a week later after saying sales would be flat this year. However, insiders have started buying stock for the first time since last year, when Kreiz was named CEO. That includes a $1 million purchase in February by the chief himself – essentially betting on a turnaround of his new company.

• Market value: $467.5 million
• Mitek Systems (MITK, $12.07) is a dominant player in the mobile check deposit market. Its technology is used by approximately 6,100 American banks to verify customer identities and process mobile deposits. It also has been through some turmoil: Trading in the stock was halted last August after shares plummeted following the announcement that its CEO and CFO both planned to leave.

However, Mitek’s activist investor interest didn’t begin until October 2018, when it rejected a buyout offer from Florida-based ASG Technologies that was backed by activist Elliott Management. Elliott then approached Mitek’s board to ask for board changes, relief from a poison pill (so it could boost its stake to 14.9%) and reconsideration of ASG’s takeout offer.

In December, ASG increased its cash offer for Mitek from $10 to $11.50 per share. Mitek responded that the new offer was still too low but offered ASG another opportunity to sweeten its bid if Elliott and ASG agreed to a confidentiality contract during the due diligence period.

Mitek reportedly attracted multiple offers from potential buyers, with Benchmark analyst Mark Schappel suggesting Jack Henry (JHKY), Fidelity National Information (FIS) and Paylocity (PCTY), among others, could be interested.

No deal has emerged, but in March, Schappel increased his price target on Mitek from $12 to $15 and reiterated his “Buy” rating, citing the expansion in industry valuation multiples since his earlier report, continued positive progress by Mitek and the company’s recent hiring of a new CEO.

Unlike the typical under-performing activist target, Mitek has an impressive track record of 30%-plus annual sales growth over seven years and 20 consecutive quarters of adjusted profits, as of the quarter reported in January. The company participates in a $10 billion worldwide mobile payments market estimated to be growing 16% annually.

• Market value: $285.9 billion

Loeb’s Third Point has encouraged Nestle SA (NSRGY, $96.12), the world’s largest packaged food company, to speed up its pace of divestitures and set more aggressive profit margin targets.

In a 34-page letter to Nestle last year, Third Point urged the spin off non-core businesses, the reorganization of Nestle into beverage, nutrition and grocery businesses and the recruitment of outside directors who have food industry expertise.

Nestle has responded by divesting its Gerber Life Insurance and U.S. confectionery businesses and announcing plans to sell its Nestle Skin Health and Herta charcuterie operations. Several private-equity firms are bidding on the skin-care business, which sources say could fetch as much as $7 billion.

Nestle also is pursuing deals in high-growth markets such as pet care, infant nutrition and premium waters. The company is looking to acquire Canada-based Champion Petfoods and signed a deal with Starbucks (SBUX) last year to sell its packaged coffees and teas worldwide.

Lastly, the foods giant has committed to operating margin goals of 17.5% to 18.5% by 2020 and accelerating its $20.8 billion share repurchase program.

• Market value: $6.1 billion

About a year ago, consumer goods giant Newell Brands (NWL, $14.35) agreed to add four new board members proposed by activist Carl Icahn, including Icahn’s son Brett. Icahn has a nearly 9% stake in the company.

Newell owns well-known consumer brands including Paper Mate and Sharpie pens, Elmer’s glue, Coleman stoves, Rubbermaid containers and Graco car seats.

Despite recent asset sales that include the $500 million sale of the Process Solutions business and the Rexair business for an undisclosed sum, sales trends remained disappointing. The new Newell board put pressure on CEO Michael Polk, who announced in March that he would retire after this year’s second quarter.

Newell has sold or plans to sell eight businesses that together represent about 35% of the company’s sales. These include its Team Sports, Beauty, U.S. Playing Cards, Jostens and Pure Fishing operations. The remaining businesses are expected to generate annualized revenues of approximately $9.5 billion by 2020 and operating margins roughly 300 basis points above current levels.

The company said the proposed asset sales would generate enough proceeds to deleverage its balance sheet while creating a leaner, more profitable Newell. But Newell did disappoint analysts by later saying it expected to raise just $8.8 billion from asset sales, down from a $9 billion estimate. Still, that will help enormously in hacking away at most of the company’s debt and simplifying the business.

• Market value: $130.3 billion

Daniel Loeb’s Third Point established a stake in PayPal (PYPL, $110.94) last July because it likes the online payments business. According to Third Point, PYPL could be the next Netflix (NFLX) or Amazon.com (AMZN), offering as much as 50% upside over its July share price of $86.

PayPal serves more than 267 million customer accounts, including 21 million merchant accounts. Since its spinoff from eBay, the company has aggressively expanded its payment platform via acquisition, emerging as the dominant player in online transactions.

PayPal’s revenues grew 21% in 2018, filtering down to a 28% jump in adjusted profits. The company added 39 million new active accounts last year, including 2.9 million via acquisitions. Third Point especially likes the company’s Venmo social payments app, which surpassed eBay volumes for the first time in 2018, and the company’s ability to generate free cash flow, which was an adjusted $3.2 billion last year.

PayPal is guiding for 16%-17% revenue growth and 17%-20% gains in non-GAAP EPS in 2019. The company also anticipates generating more than $3 billion in free cash flow.

Nomura analyst Bill Carcache has a “Buy” rating and recently raised his PayPal price target, noting strong core operating trends despite currency headwinds. BTIG analyst Mark Palmer also boosted his price target and reiterated his “Buy” rating. He said PayPal deserves a premium multiple because it can grow twice as fast as its peers.

• Market value: $1.7 billion

An unsolicited buyout bid sent shares of oil and gas producer QEP Resources (QEP, $7.23) up 40% in January. Elliott Management, which began accumulating its 5% stake last September, made its buyout offer contingent on QEP closing the $735 million sale of its oil and natural gas operations in Louisiana.

In a letter to the company, Elliott commented that QEP has made significant progress repositioning itself as a pure play on the Permian Basin, but thought an outright sale of the business would create greater value for shareholders. Elliott offered $8.75 a share for QEP, which was a 44% premium over the pre-buyout offer.

QEP said it was considering Elliott’s offer and terminated an agreement to sell its Williston Basin assets to Vantage Energy (VEAC).

While QEP waits for a resolution, it also has announced plans to cut 45% from general and administrative expenses over the next two years to make its cost structure competitive with industry peers. This announcement followed the release of fourth-quarter 2018 sales and earnings that fell short of analyst estimates.

• Market value: $295.5 million

Two years post-bankruptcy, SandRidge Energy (SD, $8.28) is making headway thanks to unsolicited help from legendary investor Carl Icahn.

SandRidge was a successful early player in the shale drilling boom but earned Icahn’s wrath after a failed bid to acquire Bonanza Creek Energy. Icahn called the deal too expensive.

Icahn won control of the board in June of last year after a proxy fight. He argued that SandRidge was overpaying executives, had offered too much for Bonanza, had failed to pursue a buyout offer from MidStates Petroleum (MPO) and was blocking progress with a “poison pill” that entrenched management.

Icahn installed new management, put in place a formal process for reviewing buyout offers that requires a shareholder vote and pushed through a top-to-bottom review of SandRidge’s executive compensation plan.

The stock has bombed by more than 50% since Icahn won his proxy vote, but the company is starting to show operational improvements. SandRidge produced 12.3 million barrels of energy last year and has proved reserves valued at $1.04 billion, which is roughly three times its market value. The company generated $167 million of adjusted EBITDA in 2018 and has no net debt. Also, its borrowing capacity exceeds $356 million, which gives SandRidge ample flexibility for small acquisitions or stepping up its drilling activities.

• Market value: $122.1 billion
• United Technologies (UTX, $141.58) is the maker of Pratt & Whitney jet engines, Otis elevators and Carrier air conditioners. And Third Point and Pershing Square Investors were instrumental in pushing UTX to separate into three businesses, suggesting the breakup – which will split Otis and Carrier off into their own companies – could unlock $20 billion of incremental shareholder value.

In a year-end 2018 letter to investors, Pershing Square said the company’s aerospace and elevator businesses are well-insulated from cyclicality because of strong order bookings, multiyear backlogs and long-term service contracts. United Technologies has committed to breaking up its businesses and recently hired two veteran CEOs to guide the company through the spinoff process.

Morgan Stanley analyst Rajeev Lalwani sees a favorable risk/reward for United Technologies, calling shares “far from broken.” He has an “Overweight” rating on United Technologies and a $150 share price target, which he based on his sum-of-the-parts analysis.

Gift card transactions in the U.S. totaled an estimated $160 billion in 2018, according to projections from technology company CEB. Of that amount, there’s approximately $1 billion worth of sold-but-unredeemed gift cards still floating around. If you have unwanted gift cards tucked away in your wallet or stuffed in your dresser drawer, it’s time to dig them out and turn them into cash (or at least trade them in for gift cards you’ll actually use).

Sell Your Gift Cards Online

There are several legitimate websites that allow you to sell your unwanted gift cards for cash. You won't get the full face value of your gift card, but if you have no intention of using it then cashing it in at an online exchange site such as Gift Card Granny is a good alternative. If you prefer, you may also be able to trade your gift card for a different gift card you’re more likely to use.

“You will lose less if it is a very popular gift card, like Amazon or Walmart, and you will lose more if it is a less common or less sought-after gift card,” says Trae Bodge, smart shopping expert at True Trae.

Popular gift cards available at Gift Card Granny include those from Amazon, Apple, Best Buy, Home Depot, iTunes, Starbucks, Target and Walmart. Typically, you can either sell the gift card directly to the website (for less money) or list the card for sale yourself (potentially for more money).

There are other online gift card brokers, including CardCash, which in addition to buying and selling gift cards, will allow users to trade gift cards. CardCash says it will pay up to 92% of a gift card’s value. We went to the “sell” page of CardCash and plugged in a $100 Target gift card. We instantly got an offer of $80. For a $100 Walmart gift card, we were offered $89.

Another online gift card broker, Cardpool, says it, too, will offer up to 92% of the value of the gift card you sell to the site. Cardpool’s angle: Sellers will get 6% more for the unwanted gift card if they take payment via an Amazon.com gift card instead of cash. That leaves you with another gift card, but one you probably desire if you’re an Amazon Prime member.

We plugged in a $100 Target gift card. Cardpool offered to buy it outright for $70, but said if we listed it for sale on Cardpool’s site, we could get $84.

Some of these brokers, including Cardpool and Raise, have apps that you can utilize to do the buying and selling. List your unwanted gift card on Raise for free, set your price, and when it’s sold you get paid via direct deposit, PayPal or by check.

One final note about places to sell gift cards online: There’s a gift card exchange on Reddit, though you’ll need to be familiar with the quirks of the website and beware scams. Payment is typically offered via PayPal or Venmo.

Get Cash on the Spot for Gift Cards at Kiosks and Retailers

Some online brokers including Cardpool and Gift Card Granny list physical locations (cashier-assisted or kiosks) where sellers can bring their unwanted gift cards. This is a good option if you’re wary of online transactions and prefer to receive your cash in person.

In Cardpool’s “find location” page, I plugged in the zip code of the Northern Virginia town where I live. I immediately got seven locations within five miles of my home that would buy my unwanted gift cards including Target stores and Safeway supermarkets. The exchange locations accept unwanted gift cards (the cards can’t have an expiration date) from approximately 150 retailers.

Are you looking for an easy, low-cost solution to send money overseas or to friends and family members domestically using a mobile device? That’s something I’ve been looking into a lot recently after my daughter was accepted into an intensive language and cultural immersion program for American students abroad. She’ll be studying in Indonesia, a great opportunity that, of course, comes with a few logistical and practical challenges that need tackling.

After doing some research, here is a list of some of the best apps and providers I found that you can use for sending money overseas and domestically.

What You Need to Know

Geographic Restrictions

Apps that you can use to make transactions may be restricted to certain geographic locations, which means that you won’t be able to send your money to people living in certain regions around the world. The geographic restrictions are different from one provider to another.

Transaction Speed

With some mobile apps your money will arrive within a matter of minutes. With others, delivery may take up to several business days. This is something you should confirm before you initiate a payment to make sure that your cash arrives in time.

Transaction Fees

Some providers will charge a fee for every transaction you make, others won't. If a company doesn't disclose all fees clearly up front, don’t take chances. Also, transaction fees are not the end of the story. The best apps for sending money are also determined by currency exchange rates. Midmarket rates that are also used by established banks are usually the best option.

Security

If you live in the U.S. and plan to send money to, for example, Croatia, you want to have the guarantee that all your money is safe while being transferred and will actually be credited to the bank account or e-wallet of the intended recipient.

This is why it's important to rely on a reputable bank or provider that tracks funds through the whole process. For international transfers, this often involves credit unions.

Sending Money to Strangers

Generally speaking, peer-to-peer apps are not ideal for sending money to strangers. This is because you may not be able to retrieve your money in the event something goes awry. PayPal, for example, offers a purchase protection; Venmo does not.

Best Apps for Sending Money Overseas

What if one of your kids is studying abroad or you have relatives overseas who you want to support financially? In this case, you need a mobile app that not only allows you to safely send money to specific countries, but also exchange it into the desired currency and at an acceptable rate.

These are some of the best apps I found for sending money overseas:

OFX

OFX’s mobile app allows you to send money to more than 190 countries and in 55 different currencies within one to two days. You can transfer as much as you want and also use the app to track all your activities, monitor exchange rates and set rate alerts. You can even lock in rates for future transfers.

In addition, there are no transaction fees. Instead, OFX takes a competitive margin on currency exchange rates, which is usually less than 2%. The only drawback is the minimum transfer amount of $1,000.

Bottom line: OFX may be your best option if you want to send at least several thousand dollars overseas.

TransferWise

With TransferWise, you can send money to family members and friends as well as businesses based in more than 40 countries around the world.

TransferWise is a bit slower than OFX. Transactions will take one to three days to complete. The provider charges a variable — but very competitive — transaction fee, which you can quantify using TransferWise’s own calculator. As of the writing of this article, if you want to send U.S. $1,000 and exchange it into euros, TransferWise would charge a mere $6.96, a 0.7% fee.

A clear advantage that TransferWise has over OFX is that there is no minimum transfer amount, and TransferWise offers a very simple sign-up process.

Bottom line: Low transaction fees make TransferWise a great tool if all you want to do is send a couple of hundred or a thousand dollars to the countries to which you usually wire money.

PayPal

We all know PayPal, and most of us already use it. So, chances are that you won’t have to set up a new user account and link your credit or debit card and your regular bank account.

Inside the U.S., PayPal allows you to store and send money for free, unless you pay for goods or services or settle an invoice. In this case, the payment provider will charge the business on the other end of the transfer and you can benefit from PayPal's buyer protection. Above that, PayPal charges for debit- and credit-card-funded transactions (2.9% plus 30 cents inside the U.S.) and to convert currencies.

For international transactions, fees for transfers from your bank or PayPal balance to Canada and Europe are $2.99, and fees for other countries are $4.99. When using a credit or debit card, on top of those fees add 2.9% of the transaction amount plus a fixed fee, which varies based on country. The good news is that you can send money to people living in more than 190 countries, and all you need is their email address or mobile phone number. More than 20 different currencies are available.

Bottom line: PayPal is an established player for mobile payments, and you can send money to almost every remote location in the world.

WorldFirst

WorldFirst does not charge a fee when you make a personal transfer for over $10,000. For transfers under $10,000, there’s a $10 flat fee. If you are based in the United States, you can send money to more than 120 countries. Transfers usually take two to three business days. The app also lets you track payments and exchange rates. To make a transaction, only the sender needs to have a WorldFirst account to send money. They can enter the recipient's bank account information.

One drawback is that with WorldFirst, the minimum amount of money one can send is $1,000.

Bottom line: WorldFirst is not suitable for sending small sums. If you go above and beyond $10,000 though, currency exchange rates are quite competitive.

WorldRemit

WorldRemit, a UK-based company, was founded in 2010 and lets you send money to family and friends in more than 140 countries. What makes WorldRemit unique is that it offers one of the fastest international cash transfers. According to the provider, transfers arrive instantly in most cases.

There is no minimum transfer limit, and fees are marginal. They depend on where you want to send money to and how much you want to send. You can pay from a bank account or credit or debit card, and the recipient can receive funds at his or her bank account or mobile wallet deposit, or as cash pickup.

The WorldRemit app is very straightforward; it doesn’t have many additional features, and the focus is on sending money quickly and easily.

Bottom line: If you are looking for a reliable provider for making money transfers, WorldRemit makes a great choice.

Best Apps for Sending Money to Family Members and Friends Domestically

When sending money overseas, fees and security are top concerns. When sending money within the United States to family members, the focus may be more on ease of use and fast transactions. Here are three of the best apps I found for sending money to family members and friends:

Zelle

Zelle is a “fast, safe and easy way to send money in minutes to your friends and family,” but you have to have a bank account at a participating bank in the United States to qualify to use the app. Those include the Bank of America, Wells Fargo, Citi and Morgan Stanley.

Transactions won’t take more than a couple of minutes if you send money to another Zelle user. If the recipient has not signed up for the service, expect a processing time of between one to three business days.

Most important, the app is free and does not charge for sending and receiving money.

Bottom line: Zelle's banking app is the perfect solution for sending money to your family and friends.

Venmo

Venmo is owned by PayPal and was designed to send money to people in your personal environment for free (3% for credit card payments), and also to receive money. This is why the app comes with several social features, such as:

• One that allows you to connect with other users (Venmo integrates with Facebook and your phone book).
• You can define an audience who can see your transactions (public, private or friends only).
• You can “like” transactions that other people in your network make and even comment on them.

With Venmo, you can also share payments with your friends and family and make purchases in mobile apps. You can link your bank account and debit or credit card when you set up your account.

Bottom line: Venmo is an all-around app that combines personal finance management with your social life.

Square Cash

Square Cash is another app for making quick peer-to-peer payments. It's quite similar to Venmo, but it doesn’t come with all the additional social features. You can request money from and send money to a person who doesn't have a Square Cash account.

Making transactions is free unless you are a business, and, as usual, you can link your bank account and debit or credit card. An additional feature is the “$Cashtag," which works like a personalized web page where friends and family members can make payments to you.

Bottom line: What makes this app stand out is that it’s really simple to use and enables you to stay ahead of things and keep track of your transactions with ease.

Choices Abound for Sending Money

There are a great number of apps available that allow you to send money overseas and to friends and family members at little to no cost. While some providers are faster than others, in general, transactions will happen in an acceptable time frame. When you plan to send larger amounts of money, remember to compare the fees and currency exchange rates of the different providers.

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.

Finding a good hairstylist is hard, but finding a traveling hairstylist is even harder. As a splurge, I looked for someone who would come to my apartment to spend four or more hours braiding my hair. Thanks to social media, I succeeded.

My text exchanges with the stylist went smoothly. I described what I wanted, and she told me to send a nonrefundable $150 deposit–half of the cost–via PayPal's peer-to peer (P2P) payment function. The alarm bells didn't go off until I couldn't reach her on the day of the appointment. Was this stranger going to show up as promised, or did I just lose $150?

Fortunately, she did show up that day. I hadn't been able to reach her because her cell phone battery had died. In hindsight, I realized she could have catfished me–created an elaborate fake profile and passed off someone else's work as her own–and then not shown up. I would have been scammed, with no recourse from PayPal.

Growth of P2P. Members of my generation are big users of P2P apps, such as Cash, PayPal, Venmo and Zelle. The apps are fast, and often all it takes to transfer money to another's bank account is an e-mail address or phone number. In fact, 62% of millennials used these apps to send or receive money in 2017, reports Bank of America.

But as the use of P2P apps grows, so do complaints about scams. The Federal Trade Commission added online payment systems to its complaint database last year, and I've noticed more scam complaints posted on social media sites. The schemes are similar: Someone pretends to be selling, say, concert tickets, dupes victims into sending money and then disappears.

As consumers, we have come to expect some form of protection when we link our bank accounts or debit cards to these apps. But when you're using electronic forms of payment to make a purchase from another individual–instead of a traditional merchant–the rules are different and there's less protection against fraud, says Sarah Grotta, of Mercator Advisory Group. If anyone ever took the time to read the fine print, they'd know this. For instance, according to PayPal's purchase protection guidelines, when you send money through its friends-and-family P2P system, you're not covered for any losses because you authorized the transaction. If someone hacks into your PayPal account to make an unauthorized transaction, however, you're protected.

Venmo, owned by PayPal, states in its user agreement that personal accounts are meant to be used only between family and friends. Its definition of what's considered an unauthorized transaction is similar to PayPal's. The same goes for Cash.

Zelle, another P2P app, looks like a safer bet because it's backed by big banks, such as Chase, Citi and Wells Fargo. But banks that have integrated Zelle into their systems stress that the app is for sending money to someone you know. If you do business with strangers and get scammed, you're likely out of luck.

Grotta's advice is never to send money to people you don't know. If you've been hacked and money has been transferred from your account without your consent, contact your bank and the P2P service by e-mail or phone as soon as possible. The P2P service will investigate your claim and determine if a full refund is due.

Ultimately, treat your P2P payments as you would cash. If you wouldn't feel comfortable giving a stranger cash before receiving a product or service, don't send that person money by Venmo, either. Once the money is gone, it's gone. I'll be sure not to take the flight risk with my money again.

Want big returns? Take on big risks. So goes the inescapable calculus of investing. With so many investors focused on safety and income these days, we decided to take a contrarian approach by looking for risky companies that have the potential to deliver big payoffs.

We’ve identified eight risky stocks that we believe are worth the risk. Several of these companies, we feel, have the potential to be game-changers in their industries—the proverbial “next Google.” But in exchange for the possibility of a big payoff down the road, investors must be content forgoing profits for the time being (only one of our picks pays a dividend). Others on the list are already profitable and show great potential, but come with other unusual or notable risks. Consider stashing a small portion of your play money into each of these names, then ignoring them for a few years. Chances are not all will succeed. But the one or two (or more) winners on the list could win big.

All prices and returns are through September 9. Price-earnings ratios are based on estimated earnings over the next four quarters. Sales are for the past four quarters.

• Symbol: BABAShare price: $99.62Market capitalization: $246.3 billion52-week range: $57.20 - $104.30Annual sales: $17 billionEstimated earnings for the fiscal year ending March 2017: $3.28 per shareEstimated earnings for the fiscal year ending March 2018: $4.21 per sharePrice-earnings ratio: 29Year-to-date return: 23%
• What does the company do? Often called “the eBay of China,” Alibaba is the dominant online retailer in China. Alibaba’s business model is slightly different than those of the U.S. companies it’s often compared to, combining elements of eBay (EBAY), Amazon.com (AMZN) and PayPal (PYPL). Its websites are essentially large online marketplaces, linking buyers with sellers and earning fees from advertising and payment processing. But unlike eBay, it doesn’t operate auctions, and unlike Amazon, it doesn’t sell products itself.
• Why is the stock risky? “It’s risky because we don’t know where China is going,” says Benjamin Segal, manager of the Neuberger Berman International Equity Fund, which owns the stock. Economic growth in China has been slowing, the Shanghai Composite index has fallen more than 40% since June 2015, and economists have been warning of risks in the country’s “shadow banking” sector, in which lightly regulated financial companies have been selling trillions of dollars in risky products.
• Why is it worth the risk? A slowing Chinese economy is still a growing Chinese economy. The country is gradually shifting to a consumer-driven economy from one in which investment spending—including government investments in infrastructure and spending by state-sponsored and private enterprises—has been the main driver of growth. That should spell more business for retailers. Moreover, China doesn’t have the vast array of brick-and-mortar stores that the U.S. does, making newly minted members of the middle class more likely to turn to online shopping first. Alibaba’s profits have grown almost tenfold in the past three years, and analysts expect them to increase by a still-brisk 28% annual pace over the next three to five years. “In an economy that will, in time, be comparable to if not bigger than the U.S., here is eBay, PayPal and Amazon all wrapped into one,” says Segal. Compared with, say, Amazon.com’s P/E ratio of 101, Alibaba, trading at 29 times estimated year-ahead profits, looks cheap.
• SEE ALSO: The Best Stocks From Around the World

• Symbol: ATHNShare price: $120.12Market capitalization: $4.7 billion52-week range: $114.59 - $170.42Annual sales: $1 billionEstimated 2016 earnings: $1.77 per shareEstimated 2017 earnings: $2.23 per sharePrice-earnings ratio: 62Year-to-date return: –25%
• What does the company do? Athenahealth offers web-based health care software for physicians and hospitals. The software helps health care providers track and collect reimbursements from insurers, store patients’ electronic health records, and coordinate overall office-management tasks. Athenahealth earns its money by charging a percentage of collections, which aligns its incentives with clients and often works out to be cheaper for users than alternative systems.
• Why is the stock risky? The company is barely profitable, and the health care sector is slow-moving and fraught with bureaucracy, meaning providers may be slow to adopt a new way of doing things. Its chief executive officer, Jonathan Bush (nephew to the 41st U.S. President and cousin to the 43rd), is considered controversial because of his tendency to divulge too much information about the inner workings and struggles of his company. And the stock is hardly cheap.
• Why is it worth the risk? Sure, health care companies are slow to adopt change, but the slow-moving, costly existing process of health care billing is ripe for a makeover, and Athenahealth’s products are the most compelling on the market. Cathie Wood, CEO of ARK Investment Management, says the company’s strategy is reminiscent of that of Amazon.com—forgoing near-term profits in an effort to stake out a dominant market position. “This could be a winner-take-most situation,” says Wood. Investors will need to be patient with the stock, but Athenahealth could be worth the wait.

• Symbol: BLUEShare price: $53.43Market capitalization: $2.1 billion52-week range: $35.37 – $143.08Annual sales: Not meaningfulEstimated 2016 earnings: –$6.15 per shareEstimated 2017 earnings: –$6.52 per shareYear-to-date return: –17%
• What does the company do? Bluebird develops gene therapies, an up-and-coming medical treatment that entails introducing “corrected” genes into a patient’s body, in order to treat or even cure a genetic condition. Bluebird is developing gene therapies to target certain types of genetically caused anemia: severe sickle cell disease and beta thalassemia. The company also has a gene therapy in the works to treat a rare nervous-system disorder and is in the early stages of developing immunotherapies for certain types of cancer.
• Why is the stock risky? All of Bluebird’s products are still in clinical trials, so the company does not yet earn money from selling its products, let alone generate any profits. There’s always the risk that the company burns through its cash before it brings any products to market.
• Why is it worth the risk? Bluebird’s therapies have seen some inspiring results. Although the company’s drug trials have thus far included relatively small numbers of people, in a few cases patients appear to have been cured of all symptoms of a life-threatening genetic condition with just one course of treatment. “Bluebird’s treatments have the potential to be life-changing,” says Dennis Wassung, a portfolio manager with Cabot Wealth Management who owns the stock in separately managed accounts. Results haven’t been uniformly perfect for any of Bluebird’s therapies, but all three of its gene therapies hold promise.

It’s hard to come up with an appropriate price tag for such an early-stage company. But with the stock down 73% from its May 2015 peak of $197.35—because of some unexpected setbacks in trial results and also because of overall weakness among biotech stocks—investors might one day look back at the current share price and see a screaming buying opportunity.

• Symbol: DXCMShare price: $92.96Market capitalization: $7.7 billion52-week range: $47.92 – $103.29Annual sales: $490 millionEstimated 2016 earnings: –$0.57 per shareEstimated 2017 earnings: $0.26 per shareYear-to-date return: 14%
• What does the company do? Dexcom makes continuous glucose monitoring systems for patients with diabetes. An alternative to conventional finger-prick tests, Dexcom’s products essentially provide moment-by-moment tracking of glucose levels, using a sensor that is inserted under the skin. The device automatically transmits data to a small, iPod-like instrument, which allows patients to watch trends on their blood sugar and receive alerts if their glucose levels enter dangerous territory.
• Why is the stock risky? Dexcom has yet to turn profitable, and it’s not the only company offering this type of technology. Plus, the stock has already enjoyed a large run-up—soaring by more than 13 times since November 2011. On a price-to-sales basis, Dexcom trades at a “meaningful premium” to its peers, says Wassung.
• Why is it worth the risk? Dexcom leads competitors in terms of market share and accuracy of its products, so it deserves a premium valuation. Only 15% of patients with type-1 diabetes are using continuous glucose monitoring systems, Wassung says, so an enormous untapped opportunity set remains. “Dexcom’s technology has really just started to hit the mainstream market in the last few years, and is receiving a lot of support from the medical community,” he adds. Analysts expect the company to turn profitable in the fourth quarter of 2016, earn $0.26 per share next year and $0.98 per share in 2018.

• Symbol: ESLTShare price: $96.70Market capitalization: $4.0 billion52-week range: $72.05 – $103.28Annual sales: $3.2 billionActual 2015 earnings: $4.74 per shareEstimated 2016 earnings: Not availableEstimated 2017 earnings: Not availableYear to date return: 10.8%
• What does the company do? Elbit Systems makes drones, technology systems for aircrafts, and intelligence-gathering and military communications systems. The company, which is based in Haifa, Israel, sells its products all over the world, with no one country or geographic area dominating its revenues.
• Why is the stock risky? Elbit is based in a tough and volatile neighborhood. Trade with Israel is vulnerable to shifting political winds. And although the shares trade on Nasdaq, Elbit’s shares are not as liquid as a typical U.S. stock.
• Why is it worth the risk? Elbit’s growth prospects are excellent thanks to its broad geographic diversification. For example, in the first half of 2016, sales to Europe increased by 31% compared with the same period in 2015, as European members of NATO boosted spending on their militaries because of concerns about Russia’s expansionist aims. The company’s high-tech focus should continue to give it an edge; it recently signed contracts for delivery of thermal-imaging observation systems and tactical communication systems. The company has a backlog of orders worth $6.8 billion, equivalent to more than two years of annual revenue. First-half profits of $106 million ($2.49 per share) were up 18% from the first six months of 2015. The stock has been on a tear, more than tripling since August 2012, but we think it still has room to run. Elbit is the only company on our list that pays a dividend. The stock yields 1.7%.

• Symbol: SKXShare price: $23.48Market capitalization: $3.7 billion52-week range: $22.50 – $49.58Annual sales: $3.4 billionEstimated 2016 earnings: $1.83 per shareEstimated 2017 earnings: $2.14 per sharePrice-earnings ratio: 12Year-to-date return: –22%
• What does the company do? Known mainly for its sneakers, Skechers also makes other casual footwear, such as boots and sandals
• Why is the stock risky? Skechers’ shoes haven’t been, well, cool, in a long time. The brand’s heyday was in the late ’90s and early aughts, arguably peaking in 2001, when Brittany Spears appeared on the cover of Forbes in a pair of Skechers (alongside a story proclaiming that the company might be the “next Nike”). Since then, sales have grown at a respectable 8.9% per year, but Skechers has made missteps in its quest to regain its former trendiness. In 2012, for example, the company settled charges with the Federal Trade Commission that its Shape Up shoes (endorsed by Kim Kardashian) would help wearers lose weight and tone their backsides. The stock has sunk 27% since July 21, when the company reported second-quarter results that came in below analysts’ estimates.
• Why is it worth the risk? Skechers may never again be the hottest must-have shoe. Instead, the company has shifted its strategy to offering a lot of inexpensive versions of popular styles, aiming to capture a portion of market share in a variety of categories rather than focusing on a single trendy shoe. In 2015, Skechers surpassed Adidas to become the second-biggest seller of athletic footwear in the U.S., behind only Nike (NKE).

Sales and earnings have grown robustly in recent years. Sales rose an annualized 26% from 2012 through 2015, and profits skyrocketed from $10 million to $232 million. The streak came to a halt in the second quarter, with sales expanding by only 10% from the same period in 2015 and earnings actually slipping by 7%. However, much of the slowdown was due to onetime issues. Wassung says investors have been too hard on the stock in the past month and a half, and he sees a buying opportunity.

• Symbol: TSLAShare price: $194.47Market capitalization: $28.9 billion52-week range: $141.05 – $271.57Annual sales: $4.6 billionEstimated 2016 earnings: –$0.95 per shareEstimated 2017 earnings: $1.71 per sharePrice-earnings ratio: Not meaningfulYear-to-date return: –19%
• What does the company do? Tesla is best known for its sleek electric vehicles, and almost all of its revenues come from selling cars and related products and services. But the ambitions of Elon Musk, the company’s enigmatic CEO, don’t stop at high-end cars. Tesla is in the process of acquiring SolarCity (SCTY), a maker of solar panels, and Musk has said he wants Tesla to become a one-stop shop to help consumers power their households. He plans to accomplish this by selling panels along with efficient batteries for storing generated energy (because solar panels generate a lot of energy at certain times of day, and none at others).
• Why is the stock risky? Tesla has yet to turn a profit, although analysts expect it to earn money in the current quarter. And lofty expectations are already baked into the stock, which trades at 185 times estimated year-ahead earnings (profits are so low, the P/E isn’t especially meaningful). Moreover, Tesla’s proposed acquisition of SolarCity has been criticized as a bailout of the solar company, which came close to running out of cash this year and has been unable to persuade other potential suitors to invest. Tesla has itself reported in regulatory filings that it will need to issue additional stock or debt before the end of the year, in part to bankroll the merger.
• Why is it worth the risk? Few companies can truly lay claim to having the potential to change the world, but Tesla is one of them. Musk has said he expects the company to be producing 1 million electric vehicles per year by 2020, as Tesla works on making its factories more efficient. That would put its output at roughly one-seventh of the annual output of Ford Motor (F). The company is also investing heavily in its battery technology, which has the potential to serve applications far beyond vehicles and solar-powered homes. “Lots of investors don’t like the fact that they can’t hang their hat on certain quarterly numbers,” says Wood, of ARK Investment Management, a firm that runs actively managed exchange-traded funds and owns the stock. “We don’t mind because we see the big picture.”
• QUIZ: How Well Do You Know Dividends?

• Symbol: TUBEShare price: $8.99Market capitalization: $326 million52-week range: $8.75 – $14.46Annual sales: $202 millionEstimated 2016 earnings: –$0.58 per shareEstimated 2017 earnings: –$0.31 per shareYear-to-date return: –34%
• What does the company do? TubeMogul develops self-service advertising software that allows advertisers and advertising agencies to directly purchase TV, online and mobile ad spots. Its business model represents a dramatic shift for the advertising industry. Print, online and broadcast ads have traditionally been bought and sold through a laborious and costly process of soliciting requests for proposals, with layers of middlemen taking cuts of deals.
• Why is the stock risky? The company is not yet profitable. Analysts, on average, don’t expect it to make money until 2018, but it could remain in the red for longer than investors expect.
• Why is it worth the risk? “Disruption” is a buzzword that gets wildly overused in the world of start-ups, but TubeMogul’s business model does seem to have the potential to be a game-changer for digital advertising. It’s a cheaper model for advertisers and it allows them to, with a few clicks, target the exact demographic groups they want to reach on the exact mediums they want to use. And it provides up-to-the-moment analytics on whether an ad campaign is reaching the right people. Plus, the stock looks reasonable on the basis of its price-to-sales ratio. The shares sell at 1.7 times the past 12 months’ sales, matching the price-to-sales ratio for industrial companies in Standard & Poor’s 500-stock index.
• SEE ALSO: 5 Good Dividend Stocks to Buy While They Are Cheap

Few things have haunted me as much as the fear of having my identity stolen. What a nightmare it would be, my credit in shambles and the prospect of spending countless hours to restore my good name. To quell the anxiety, I’ve paid for various credit-monitoring services over the years.

And then this spring it happened: I received an alert about a suspicious credit inquiry. My Social Security number had been used to open a new PayPal credit account in my name. Cue the panic attack...

However, as with most things in life, the anxiety turned out to be worse than the reality. Because I caught the fraud so quickly – within hours of the PayPal account being opened – I was able to minimize the damage. No charges were made to the fake account, and no other accounts were opened with my information.

Here’s what I did to successfully shut down the identity thieves -- including a few new tactics I learned along the way:

It all started with Equifax credit monitoring (cost: about $12 per month through my bank), which alerted me to the bogus credit inquiry from PayPal. As I hadn’t applied for any lines of credit, I knew I needed to take action.

I called PayPal right away and explained to a representative that I did not open the new account. She froze it and launched an internal investigation.

I then contacted Equifax to place a 90-day initial fraud alert on my record. This alert is free on request, and once you’ve placed it with one credit bureau, the alert is automatically placed with the other two credit agencies. For at least 90 days, my credit was safe.

[Insert a sigh of relief here.]

As I awaited PayPal’s internal investigation, I also took the time to create an account with the FTC so that I would have a record of the incident. Documentation is necessary if you want to take advantage of a free credit freeze for fraud victims (more on this in a moment). I give big props to the FTC for a helpful website and charming phone service agents. I also submitted a police report online for further documentation.

What the Experts Say

I reached out to a couple of experts to see if I had responded appropriately: Michael Bruemmer, vice-president for consumer protection at Experian, and credit expert John Ulzheimer, formerly of FICO and Equifax. Both agreed that I get an A, because most consumers would have disputed the issue with PayPal and stopped there. Bruemmer also gave me points for monitoring my accounts so proactively, which is one of his key steps to identity protection, along with shredding prescreened offers and personal documents you no longer need.

After a few weeks, I received written confirmation from PayPal that the fraudulent account would be closed.

To prevent future credit breaches, I next had to choose between establishing an extended fraud alert or freezing my credit completely. With an extended fraud alert, which lasts seven years, creditors can still access your report as long as they first take steps to verify your identity. A credit freeze means your credit report can’t be accessed unless you specifically grant permission.

“The credit freeze is the Fort Knox of credit protection,” says Ulzheimer. Although you need to unfreeze your account each time you apply to open a new account—say, with a home utility or cell-phone provider--or anytime you apply for credit, “the ability to decide when someone can access your credit report is a really empowering thing for a consumer.” And you don’t have to have your identity stolen to do it. Just be aware of your state’s laws regarding credit-freeze costs and requirements.

I opted for the credit freeze. Because I was the victim of fraud and had a police report, I was entitled to place the freeze free if I sent my documentation via certified mail. Unlike the initial fraud alert, which carried over automatically to all three credit bureaus, I had to request a separate freeze at each bureau. (Note: In my state, anybody can freeze their credit online for a $10 fee. And because the cost to send my documentation by certified mail would have exceeded $10, I, too, chose to pay the fee to freeze my credit online.)

Sure, the credit freeze will ultimately require more judiciousness on my part whenever I apply for credit in the future. (Note to self: Do not forget your PIN numbers.) But it’s completely worth it for the peace of mind. There are plenty of things to be anxious about. I don’t want identity theft to be one of them.

1. A cashless society? Not so fast.

From PayPal to Bitcoin to Samsung Pay (the newest contender among mobile wallets), advances in payment technology make pocket change look as if it’s headed for the history books. But according to a 2012 study from the Federal Reserve Bank of San Francisco, 40% of an average consumer’s transactions were in cash—more than for debit cards (25%), credit cards (17%), electronic payments (7%) and checks (7%). The number of notes in circulation has grown by about 5% per year since then, says Doug Conover, an author of the study.

2. Currency comes in handy.

Most vending machines don’t take plastic, and cash works best for all small purchases. In the Federal Reserve study, consumers used cash for two-thirds of transactions smaller than $10 and for half of all payments of less than $50. Merchants are legally permitted to refuse plastic for transactions of less than $10, and they may provide a discount to customers who pay with cash. For most people, $50 or so is an adequate amount of cash to keep on hand, says Matt Schulz, senior industry analyst for CreditCards.com.

3. Hamiltons can’t get hacked.

With data breaches of major retailers becoming common, some consumers have turned to cash payments to prevent hackers from obtaining their credit card information. But plastic carries one big benefit that cash doesn’t: If a thief racks up charges on your credit card, you’re protected by the card networks’ zero-liability policies. And banks will most often reimburse you for fraudulent debit card charges.

4. A cash fix can cost you.

Use an ATM outside your bank’s network and you’ll pay more than $4, on average, in combined fees to the bank and the ATM’s owner, according to a MoneyRates.com survey. Check your bank’s app or Web site to locate in-network ATMs. Or use a checking account that reimburses ATM surcharges (Ally Bank pays back up to $10 a month). A few banks have introduced ATMs from which customers can get cash by arranging a withdrawal on a smartphone app, then using the app to scan a QR code that the ATM displays—no card required.

5. It’s a great budgeting tool.

If you have trouble controlling your spending when you pay with credit cards, then favoring cash or a debit card is best for your finances. With cash, you can spend only what you have, so you may treat your money more carefully if you see real dollars leaving your hands. Divide the cash into envelopes labeled for each category of your monthly budget—or at least for discretionary purchases such as eating out and shopping. Unfortunately, doing that means you won’t be able to use online tools that automatically track each dollar you spend. But with mobile apps such as GoodBudget and Mvelopes (both are available for Apple and Android devices), you can create virtual envelopes and connect to your bank account to see where the money goes.

6. But it won’t help build your credit history.

Consider using a credit card now and then—perhaps for routine purchases, such as gas, that won’t tempt you to overspend. A history of responsible card usage on your credit record can help you get the best terms on a mortgage or other loan. It may even improve your prospects for getting a job or an apartment rental.