Stocks opened cautiously higher Tuesday as market participants took in the latest inflation data and the unofficial start of second-quarter earnings season. But enthusiasm waned as the session wore on, with two of the three main benchmarks closing in negative territory.

Ahead of the open, data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) rose 0.3% month over month in June and 2.7% year over year. This was quicker than what was seen in May but in line with economists' forecasts.

Core CPI, which excludes volatile food and energy costs, was also higher than the month prior, but matched consensus estimates.

Some "goods" areas, such as furniture, appliances and electronics, saw rising prices and were likely a result of tariff pass-throughs, says John Luke Tyner, portfolio manager and fixed income analyst at Aptus Capital Advisors.

As for the positives in the June CPI report, Tyner points to "continued softening in shelter, car insurance and airfares," which helps "alleviate service pressures that have been problematic over the last several years."

Tyner adds that while tariffs haven't lifted inflation as much as feared just yet, it's still above the Federal Reserve's 2% target and is unlikely to change the central bank's stance on keeping interest rates unchanged.

Indeed, futures traders are currently pricing in a 97% chance the Fed holds rates steady at its next policy meeting in late July.

MP Materials jumps on big Apple deal

In single-stock news, MP Materials (MP) shares soared 20.0% after the mining company announced a $500 million deal with Apple (AAPL).

Under the terms of the agreement, MP will provide the tech giant with rare earth magnets that are manufactured in the U.S. from 100% recycled materials.

MP Materials is the only rare earth producer in the U.S., and the magnets are critical in consumer electronics, including smartphones and computers.

"This collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America's industrial capacity at a pivotal moment," said MP Materials CEO James Litinsky.

Nvidia rally sends Nasdaq to new high

Apple, for its part, rose 0.2% – but it was hardly the best blue chip stock today. That honor went to Nvidia (NVDA), which rallied 4.0% on news the semiconductor manufacturer will be allowed to sell its H20 artificial intelligence (AI) chips in China.

NVDA shares went into a tailspin earlier this year after the Trump administration ramped up restrictions on China. But the chip stock has rebounded in recent months and last week, became the first company to top a $4 trillion market cap.

Nvidia's gain helped keep the Nasdaq Composite above water today, with the tech-heavy index climbing 0.2% to 20,677 – a new all-time closing high.

However, the Dow Jones Industrial Average shed 1% to 44,023 and the S&P 500 fell 0.4% to 6,243 due in part to weakness in financial stocks.

Bank stocks hold back the S&P 500

Among the day's most notable decliners was Wells Fargo (WFC), which plunged 5.5% after earnings.

While the big bank beat top- and bottom-line Q2 estimates, it lowered its full-year net interest income guidance.

"The good news was bad loans were down indicating more stable credit quality allowing for better than expected profits," says Brian Mulberry, senior client portfolio manager at Zacks Investment Management.

And while Mulberry says that weakness in the NII segment "is a concern in the short term," this pressure could lift if interest rates move lower later this year.

Wells Fargo wasn't alone in its post-earnings weakness. JPMorgan Chase (JPM, -0.8%) and BlackRock (BLK, -5.8%) also fell in the wake of their Q2 results.

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Wells Fargo (WFC) stock is down more than 6% at the start of trading Friday after the banking giant beat analysts’ expectations on the top and bottom lines for its second quarter, but its net interest income, a key metric for banks, failed to meet expectations.

In the quarter ended June 30, Wells Fargo’s revenue increased 0.8% year-over-year to $20.7 billion despite a 9.4% year-over-year decline in net interest income to $11.9 billion. Its earnings per share (EPS) increased 6.4% to $1.33 from the year-ago period.

“Our efforts to transform Wells Fargo were reflected in our second quarter financial performance as diluted earnings per common share grew from both the first quarter and a year ago,” Wells Fargo CEO Charlie Scharf said in a statement. 

Wells Fargo Q2 earnings report

The headline results beat analysts’ expectations. Wall Street was anticipating revenue of $20.3 billion and earnings of $1.29 per share, according to CNBC. However, the reported $11.9 billion in net interest income came in well below the $12.1 billion analysts were expecting. 

“We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income,” Scharf said. “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”

Wells Fargo also said it repurchased over $12 billion of common stock during the first half of the year and reiterated its expectation of a 14% dividend increase in the third quarter, which it first announced in late June following the release of the Federal Reserve’s stress test results. Stock buybacks can boost value for shareholders.

JP Morgan Chase (JPM) and Citigroup (C) reported earnings this morning as well, as the start of a busy earnings calendar for this season. 

JP Morgan reported revenue of $51 billion and earnings of $4.40 per share, topping expectations of revenue of $49.9 billion and earnings of $4.19 per share. Citigroup also reported a beat with revenue of $20.1 billion and EPS of $1.52 versus expectations of revenue of $20.07 billion and earnings of $1.39 per share.

Is Wells Fargo stock a buy, sell or hold?

Wall Street is bullish on the bank stock. According to S&P Global Market Intelligence, the average analyst target price for WFC stock is $64.16, representing implied upside of more than 14% to current levels. Additionally, the consensus recommendation is a Buy.

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Stocks opened lower Thursday before reversing course mid-morning and rallying into the close. 

Sparking the turnaround were reports that several of the country's largest banks – including blue chip stocks JPMorgan Chase (JPM) and Bank of America (BAC) – will provide beaten-down regional lender First Republic Bank (FRC) with a massive injection of deposits. Also lifting sentiment was news that Swiss National Bank offered a lifeline to Credit Suisse (CS). 

It's been a chaotic week in the financial sector sparked by weekend headlines surrounding the failures of Silicon Valley Bank and Signature Bank. While this has created substantial volatility among bank stocks, the broader market has been fairly resilient. Still, today's positive headlines allowed investors to breathe a sigh of relief that the disruption could be contained. 

As a result, the Nasdaq Composite jumped 2.5% to 11,717, the S&P 500 soared 1.8% to 3,960, and the Dow Jones Industrial Average gained 1.2% to 32,246.

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All but one sector – real estate (unchanged) – finished higher, with technology (+2.8%) and communications services (+2.2%) leading the way. Financials (+1.9%) were another solid gainer, thanks to strong price action seen across the sector. 

FRC stock, for one, was down more than 36% at its session low before ending the day up 10.3%. Boosting the volatile bank stock was news that JPM, BAC, Wells Fargo (WFC) and Citigroup (C) will deposit $5 billion apiece into First Republic. Several other banks will reportedly commit smaller amounts to the rescue effort.

Elsewhere, CS stock was up 18% at its session high after the bank secured a $50 billion loan from Swiss National Bank in what it called "decisive action to pre-emptively strengthen its liquidity." Shares ended the day down 0.2%, though. Anxiety around the strength of the Swiss bank – sparked in part by the recent closures of SVB and Signature Bank – sent its shares tumbling on Wednesday. 

Is tech the new safety play?

Are tech stocks the new safety plays? Tech and tech-related sectors like communications services have shown relative strength throughout the first quarter. Looking at the numbers, the tech-heavy Nasdaq is up more than 11% for the year-to-date vs a roughly 3% gain for the broader S&P 500 and a 3% decline for the blue-chip Dow.

There are two potential reasons for the outperformance, says Carrie King, global deputy chief investment officer of BlackRock Fundamental Equities. One is possible bargain hunting after a significant underperformance from tech and tech-related stocks last year. Another is the notable cost-cutting that's been underway, including massive layoffs. 

For investors looking to play the hot hand of the market, there are plenty of ideas, including those found among the best tech stocks and the best communication services stocks. As for industry-specific opportunities, these are the best semiconductor stocks and the best AI stocks to buy now.

Earlier this month, pay transparency laws went into effect in Washington and California, requiring employers to list pay ranges on job listings. Later this year, New York state will also follow suit. These laws, already in place in Colorado, are one way that states are combatting wage gaps —including racial and gender pay gaps. In fact, the gender pay gap was cut by 45% in organizations that disclosed pay compared to those that didn’t. As more states, including South Carolina and Massachusetts, begin developing pay transparency laws, this could soon become the new norm. 

Here’s what you need to know about the new pay transparency laws effective this year.

California: At the beginning of this year, California’s labor code began requiring employers with more than 15 employees to list salary ranges on job postings, even for postings on third-party websites. 

Employers are also required to share pay ranges for an employee's current position, upon request — which is likely to put the cat among the pigeons... Home to many powerful companies — like Apple and Wells Fargo — and to millions of employees, California's pay transparency laws could soon become the new normal across states. 

Washington: Similar to California, Washington now requires employers with more than 15 workers to share salary information on job postings — both internally and on third-party sites like Glassdoor and LinkedIn — thanks to the Equal Pay and Opportunities Act. Furthermore, company benefits, like health care, retirement benefits and sick leave, are also required on job listings. These requirements are effective whether the applicant will fill a position in person or remotely.  

Rhode Island: Rhode Island has also required further pay transparency from employers. According to Rhode Island’s Pay Equity Act, if requested, employers are required to provide pay ranges for job listings if "inquired about". However, they don't have to list these ranges outright on job listings. Employers will also be required to disclose salary ranges before an employee is hired or before they change positions. 

New York State: New York state’s transparency laws will go into effect in September of this year. Starting in September, New York employers are required to share pay ranges for job listings. This applies to employers with four or more workers. Pay transparency laws have been in effect in New York City since November 1, 2022, which made it the largest municipality in the U.S. to codify pay transparency.

It looked like the market's luck was going to run out Friday as fourth-quarter earnings season kicked off. Stocks opened deep in negative territory after several big banks reported Q4 results. However, the major benchmarks reversed course thanks to a solid reading on consumer sentiment, extending their daily win streaks. 

JPMorgan Chase (JPM, +2.5%) was one of several companies that got the ball rolling this morning. The financial firm reported fourth-quarter earnings of $3.57 per share, up 7.2% year-over-year as rising interest rates boosted core lending income. Revenue, meanwhile, was 18% higher in the final three months of 2022 to $34.55 billion. 

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Bank of America (BAC, +2.2%) delivered impressive results, too, with Q4 earnings per share (EPS) and revenue higher on a year-over-year basis. On the other hand, Citigroup (C, +1.7%) and Wells Fargo (WFC, +3.3%) saw sharp declines in quarterly profit due in part to the banks setting aside more cash to cover potential losses on loans – news that likely exacerbated investors' concerns of a possible recession in 2023. 

This last point may have been what sent stocks sharply lower at the open, but then a solid reading on consumer sentiment helped markets change direction mid-morning. Specifically, the University of Michigan's preliminary consumer sentiment index rose to 64.6 in January from December's final reading of 59.7. Additionally, consumers' expectations on where inflation will be in the next 12 months fell to 4% in January from 4.4% in December, the fourth straight monthly decline. 

"Inflation expectations are well-anchored and improving as pricing pressures are weakening across many sectors," says Jeffrey Roach, chief economist at LPL Financial. "The Fed will likely hike by 0.25% at the upcoming meeting later this month. We shouldn't be surprised if the Fed starts talking about pausing in the near future."

The Dow Jones Industrial Average (+0.3% to 34,302) and the S&P 500 (+0.4% at 3,999) finished higher for a fourth straight day, while the Nasdaq Composite (+0.7% at 11,079) brought its daily win streak to six.

What to Expect This Earnings Season

Earnings season really picks up next week, with more big banks set to report. For the final three months of 2022, estimated earnings for the S&P 500 are expected to decline 3.9%. If this is the actual decline for the quarter, "it will mark the first time the index has reported a year-over-year decline in earnings since Q3 2020," says John Butters, senior earnings analyst at FactSet. 

At this point in Q4 earnings season, 67 S&P 500 companies have issued negative earnings per share guidance, vs. 34 that have given positive EPS forecasts, Butters adds. 

Revenue growth is also expected to have slowed in Q4. According to Butters, revenue growth is expected to be 3.9%, which will mark the slowest pace of growth since Q4 2020. Utility stocks are forecast to post the biggest year-over-year decline in revenues, while industrials and energy stocks are projected to report the biggest annual increases in revenue. Kinder Morgan (KMI) is one of a few energy companies on next week's earnings calendar. Streaming giant Netflix (NFLX) and digital financial firm Ally Financial (ALLY) also highlight the slate.

Stocks bounced back and forth between positive and negative territory for most of Wednesday before ending the day with yet another loss. 

With little in the way of economic data to react to, investors continued to fret over the Federal Reserve's next steps as far as interest rates go. Also worrying Wall Street were recent comments from some of the country's top bank CEOs, which served to amplify fears of a possible recession in 2023. One of the more notable remarks came from Wells Fargo CEO Charlie Scharf. "There is a slowdown happening, there's no question about that," Scharf said at a financial conference Tuesday, adding that he expects "a fairly weak economy throughout the entire year." 

"It would appear the recovery in stocks – bear-market rally, or otherwise – has run out of steam, and investors are left wondering whether what follows next is another test of the lows or simply a correction of that impressive two-month surge," says Craig Erlam, senior market analyst at currency data provider OANDA. "The difficulty investors have now is balancing the coming end of the tightening cycle with a potential global recession next year amid heavily discounted valuations." 

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While the broader market chopped around on Wednesday, several individual stocks made decisive moves. Carvana (CVNA), for one, plummeted 42.9% as bankruptcy buzz swirled around the one-time pandemic darling. Tesla (TSLA) was another noteworthy decliner, with the electric vehicle maker falling 3.2% amid concerns over weakening demand in both the U.S. and China.

As for the major indexes, the broader S&P 500 Index notched its fifth straight loss, giving back 0.2% to 3,933. The tech-heavy Nasdaq Composite fell 0.5% to 10,958, while the blue-chip Dow Jones Industrial Average eked out a 1.6-point gain to end at 33,597.

Deere, Southwest Unveil Dividend News

On a brighter note, several companies announced shareholder-friendly initiatives today. These included farm equipment maker Deere (DE, +0.6%), which lifted its annual dividend by 6%, and air carrier Southwest Airlines (LUV, -4.7%), which reinstated its dividend payment after suspending it early on in the pandemic. 

Additionally, Lowe's (LOW, +2.4%) unveiled a new $15 billion share buyback program, which will be added to the previous program's balance of $6.4 billion as of Dec. 6. The home improvement retailer is also a member of the S&P 500 Dividend Aristocrats – or S&P 500 companies that have raised their payouts for at least 25 consecutive years. In May, LOW hiked its dividend by 31%, marking its 48th straight annual increase. We regularly refresh our running list of Dividend Aristocrats, so if you are looking for the best dividend stocks on Wall Street, you'll definitely want to check it out.

We may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened. We may not cover every available offer. Our relationship with advertisers may impact how an offer is presented on our site but our editorial selection of products is made independently. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more. We calculate a typical annual reward for each card, assuming $36,000 spent annually and less any annual fee. Interest rates, fees, rewards and other terms listed in this article are subject to change. Before you apply for a credit card, check its current terms and conditions with the issuer.

Cash back credit cards reward with perks on everyday purchases. If you need help narrowing down the options, you're in luck: We've done the homework and highlighted below our top picks in five categories, from cards that offer a healthy rate of cash back on all your spending to those that provide outstanding rewards on travel, gas, groceries and more.

Fees, bonuses and other terms can change at any time, so before you apply for a card, check the current terms with the issuer. And keep in mind that you should pay off your balance in full each month. Otherwise, interest charges will counteract the rewards you earn.

Know what kind of cash back card you want? Jump to these sections to see our top three picks in each category. Also, we listed credit cards in alphabetical order for each category.

• Flat-rate Cash Back
• Rotating Categories
• For Savers
• For Groceries
• For Fuel (Gas and EV Charging)

Best Flat-Rate Cash Back Cards

Citi Double Cash® Credit Card

Farmers Insurance Federal Credit Union Crystal Visa

Wells Fargo Active Cash® Card

Best Cards for Cash Back in Rotating Categories

Earn top rewards in categories that may change each month or quarter. These cards are a good fit for people who can keep track of and plan their charges in categories like online shopping, streaming, and travel.

Chase Freedom Flex

Discover it® Cash Back Credit Card

U.S. Bank Shopper Cash Rewards™ Visa Signature® Card

Best Cash Back Credit Cards for Savers

You get the best value with these cards if you stash rewards in a bank or investment account. We excluded cards that require large deposits in accounts that do not have competitive interest rates.

Bank of America Premium Rewards Visa

Fidelity Rewards Signature® Visa

SoFi Unlimited 2% Credit Card

Best Cash Back Cards for Groceries

These cards offer ample cash back on purchases at grocery stores.

Blue Cash Preferred® Card from American Express

American Express® Gold Card

Citi Custom Cash Mastercard

Best Cash Back Cards for Gas and EV Charging

If you drive an electric vehicle, see our article on getting cash back on your credit card for charging an EV. We can also point you to credit cards that cover rental car insurance.

Citi Custom Cash Mastercard

Costco Anywhere Visa by Citi

Sam’s Club® Mastercard®

Pros of cash back cards:

• Cash back cards are easy to understand and use. When it comes to simplicity and clarity, cash back cards are second to none among rewards cards. Cash back is expressed as a percentage of the amount you spend, so you know the exact value of your rewards. With travel rewards cards and other cards that provide points or airline miles for each dollar you spend, the value per point or mile may vary depending on which redemption you choose.
• They put cash in your pocket. Cash back is hard to beat if you want extra money to spend. You can often redeem cash-back rewards for a bank-account deposit, check or statement credit that reduces your credit card account balance. Or, as with some of our best cash back cards for savers, you may even be able to put the cash back in an investment account.
• You get good rewards for everyday spending. With a cash back card, you could get a healthy flat rate of about 2% back on everything you buy, or earn as much as 5% or 6% back on staples such as gas and groceries. Travel rewards cards tend to offer the highest rates on purchases of flights, hotels, dining out and other spending that usually falls into the non-essential category. Some banking cards will give you additional cash back (usually less than one percentage point) if you have a savings or investment account with the bank.

Cons of cash back cards:

• They don't always offer the highest payback. If you prefer to get the maximum possible value out of the rewards you earn with a credit card, a cash back card may not be for you. With travel rewards cards, sometimes you can earn outstanding rewards rates by putting in some legwork. With a card that pays out airline miles, for example, you may squeeze out extra value by combing through flight schedules to find the best redemption rates.
• Sign-up bonuses are smaller. Travel rewards cards are known for offering hefty initial bonuses to draw in customers. Premium travel card Chase Sapphire Reserve, for example, recently provided 60,000 bonus points — worth $900 in travel redemptions — to new cardholders who spent at least $4,000 on the card in the first three months. Many cash back cards offer initial bonuses, but their values typically aren't as high overall.
• Interest rates are high and variable. As with other rewards cards, the annual percentage rate on a cash back card is usually stiff. Average card rates run close to 20%, and some cards charge maximum rates closer to 30%. Plus, most cards have a variable interest rate tied to an index — often the prime rate. When the Federal Reserve raises short-term interest rates, the APR on your credit card increases, too.

How to Pick the Best Cash Back Card for You

There's no single cash back credit card that's best for everyone, so it's important to shop around and compare several factors to determine which is the right one for you:

• Rewards rates: If you don't want to keep track of different rewards rates, consider a flat-rate rewards card. If you want to maximize rewards on certain purchases, find a tiered or rotating rewards card with rewards categories that align with your spending.
• Welcome bonus: Consider the amount of each card's cash bonus, as well as the minimum spending requirement you need to meet to earn it. Only get a card if you can afford to meet that spending threshold without overspending.
• Redemption options: While cash back credit cards tend to offer more straightforward redemption options compared to travel cards, your redemption options can still vary. For example, some cards may only offer statement credits, while others may offer direct deposit, paper checks, gift cards, travel, online shopping and more.
• APR promotion terms: If you're after a 0% APR promotion, look at the length of each card's promotion and which transactions are included — purchases, balance transfers or both. If you want to do a balance transfer, look at each card's balance transfer fee.
• Other card benefits: Depending on your lifestyle, you may want to take advantage of other card benefits. For example, some cards may offer credits or complimentary subscriptions with popular retailers, travel and shopping protections and more.
• Annual fee: While most cash back credit cards don't charge an annual fee, there are some that do. If a card does charge an annual fee, look at the rewards program and other benefits to determine whether you can get enough value to make up for the yearly charge.

Take your time to research several options to determine the right fit for you. In some cases, it could make sense to use more than one cash back credit card to take advantage of the different bonus rewards categories and benefits.

As an independent publication dedicated to helping you make the most of your money, the article above is our view of the best deals and is not the opinion of any entity mentioned such as a card issuer, hotel, airline etc. Similarly, the content has not been reviewed or endorsed by any of those entities.

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Warren Buffett's Berkshire Hathaway (BRK.B, $303.20) cut its stake in longtime holding U.S. Bancorp (USB, $44.87) by more than half.

Buffett, who serves as Berkshire Hathaway's chairman and CEO, has been slashing his holding company's exposure to financial stocks – and bank stocks in particular – for years. And although the U.S. Bancorp position hasn't been immune to some recent downsizing in the Berkshire Hathaway equity portfolio, Buffett has left it mostly intact.

That is, until now. 

Berkshire Hathaway sold 56% of its position in the nation's fifth largest bank by assets, a new regulatory filing revealed. Buffett's conglomerate now holds 52.5 million USB shares, or 3.5% of the regional lender's shares outstanding. That's down from an ownership stake of 8.1% prior to the sales. 

Berkshire Hathaway's USB stock was worth $2.4 billion as of Thursday's close, and now accounts for just 0.7% of the Berkshire Hathaway equity portfolio. That's down from 1.8% before Buffett slashed the stake. 

Berkshire, formerly the bank's largest shareholder, now drops to fourth place behind asset management giants Vanguard, BlackRock and State Street Global Advisors.

Buffett First Bought USB in 2006

Not to get sentimental or anything, but U.S. Bancorp is one of the oldest holdings in the Berkshire Hathaway portfolio. Warren Buffett first bought shares in the nation's largest regional lender in the first quarter of 2006. And while he has always been tight-lipped about the USB position, Buffett's actions over the past few quarters have hinted that something like this might be in the offing.

After all, Buffett clipped Berkshire Hathaway's USB stake by 5%, or 6.6 million shares, in the second quarter of 2022. He also pared the stake in each of the first three quarters of 2021.

True, Buffett had been gradually reducing Berkshire Hathaway's exposure to USB. But those scissorings stood in stark contrast to what he's done with so many of Berkshire's other bank stocks.

Mostly, he's taken a hatchet to them.

In just a sample of moves, Berkshire Hathaway dumped what was left of its stake in Wells Fargo (WFC) in the first quarter of 2022, and exited positions in JPMorgan Chase (JPM), Goldman Sachs (GS), PNC Financial Services (PNC) and Travelers (TRV) over the past couple of years. 

To be sure, Warren Buffett is by no means done with big bank stocks. Bank of America (BAC) is Berkshire Hathaway's second largest holding after Apple (AAPL). The nation's second largest bank by assets accounts for 10.2% of Berkshire's total portfolio value. 

Berkshire Hathaway also owns 55.2 million shares in Citigroup (C), a position that Warren Buffett initiated in the first quarter of 2022. At 0.8% of the portfolio, Citigroup is one of Berkshire Hathaway's 15 largest investments. 

Other financial sector stocks in the Berkshire Hathaway equity portfolio include American Express (AXP), Bank of New York Mellon (BK), Mastercard (MA), Visa (V) and Ally Financial (ALLY), among others.

What This All Means

The bottom line is that U.S. Bancorp stock is a long-time market laggard, and so perhaps we shouldn't be too surprised that Warren Buffett decided it was time to dramatically lighten up on the position. We'll learn more of what the world's greatest long-term investor has been up to when Berkshire Hathaway reports its third-quarter buys and sells on Monday, Nov. 14.

For now, all we can say for certain is that Berkshire Hathaway stock has been a market-beating buy this year. Operating earnings expanded 20% in the third quarter, helping to bolster BRK.B's case as one of the best stocks to buy for a bear market. 

It's also fair to assume that this isn't good news for USB stock. If Warren Buffett's recent history with big banks stocks offers any sort of guide, Berkshire Hathaway might be putting even more USB shares on the market soon.

Stocks closed lower Friday, with the Dow Jones Industrial Average falling 1.3% to 29,634, the S&P 500 Index shedding 2.4% to 3,583, and the Nasdaq Composite surrendering 3.1% to 10,321.

Today's decline had the major market indexes paring the gains earned in Thursday's whipsaw session, and secured weekly losses for the Nasdaq (-3.1%) and S&P 500 (-1.5%). The Dow, on the other hand, finished with a weekly advance of 1.2%.

Stocks started the day higher, but turned south after the University of Michigan consumer sentiment index edged up to 59.8 in October from September's reading of 58.6 – continuing its rise off the all-time low reading near 50.0 from June.

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"Consumer sentiment rose in early October as views of current conditions improved," says Tim Quinlan, senior economist at Wells Fargo Securities. "Inflation expectations continue to be the key component of this release, and though both short- and long-term expectations rose, importantly long-term expectations remain at a level the Fed will still consider well-anchored."

Time to Buy Bank Stocks?

Bank earnings were another area of focus for investors today. Major financial firms JPMorgan Chase (JPM, +1.7%), Citigroup (C, +0.7%) and Wells Fargo (WFC, +1.9%) headlined this morning's earnings calendar – marking the start of what's expected to be a dreary earnings season. 

Results from three of the country's largest banks largely beat expectations, and the stocks responded in kind.

Additionally, JPMorgan CEO Jamie Dimon "made several comments regarding the bank's ability to manage capital expressing confidence that any negative impacts in the macro environment, risk-weighted asset levels, or AOCI can be easily handled by the current capital levels and earnings power of the company," says David Wagner, portfolio manager at Aptus Capital Advisors. "We saw the underwriting standards were not really loosened earlier so no 'tightening' is needed or being performed at this time, which is a great component of this high-quality bank."

As for Citigroup, "a lower cost of capital and net investment income is the microcosm for the beat in our opinion," Wagner adds.

Given this strength on and off the charts, many investors may be wondering if it's time to buy beaten-down bank stocks? Here, we take a look at what analysts are saying about JPM, C and WFC.

U.S. stocks dropped on Friday as worsening inflation expectations kept intact worries that the Federal Reserve's aggressive rate hike path could lead to an economic recession, while investors digested the early stages of earnings season.

In what has been a volatile week for stocks, equities opened higher before reversing course after data from he University of Michigan showed consumer sentiment improved in October but inflation expectations worsened as gas prices moved higher. Retail sales data also indicated resilience among consumers.

"You get that University of Michigan data to say that maybe we are going to see those inflation expectations rising, and the Fed really wants to front-run inflation expectations, they understand monetary policy doesn’t operate mechanically, it operates more psychologically through expectations, so they want to make sure those expectations stay firmly planted around 2% to 2.5%," said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin.

The data came a day after a reading on consumer prices showed inflation remains stubbornly high.

The Dow Jones Industrial Average fell 398.96 points, or 1.33%, to 29,639.76, the S&P 500 lost 80.64 points, or 2.20%, to 3,589.27 and the Nasdaq Composite dropped 288.66 points, or 2.71%, to 10,360.49.

Corporate earnings season started to pick up steam, helping lift banks, up 0.16%, to be among the few bright spots on the session after quarterly results from JPMorgan Chase & Co, which gained 2.12%, Citigroup Inc, up 0.76%, and Wells Fargo & Co, which rose 2.65%.

"The message I got from them is things are looking pretty good from an economic perspective despite the challenges but they increased loan-loss reserves just in anticipation that you are going to see some more slowing," said Jacobsen.

UnitedHealth gained 0.71% as one of the few Dow components to move higher on the session after the health insurer posted better-than-expected quarterly results while raising its annual forecast.

Analysts now expect third-quarter profits for S&P 500 companies to have risen just 3.6% from a year ago, much lower than an 11.1% increase expected at the start of July, according to Refinitiv data.

The Dow was on track to close out the week with a gain while the S&P 500 and Nasdaq were poised for weekly declines.

Kroger Co dropped 8.01% after the supermarket chain said it would buy smaller rival Albertsons Companies Inc in a $24.6 billion deal.

Tesla Inc slumped 6.18% following media reports that the electric vehicle maker has put on hold plans to launch battery cell production at its plant outside Berlin due to technical issues.

Investors also monitored UK politics after British Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng and scrapped parts of their economic package in a desperate bid to stay in power and survive the market and political turmoil.

Declining issues outnumbered advancing ones on the NYSE by a 4.18-to-1 ratio; on Nasdaq, a 2.91-to-1 ratio favored decliners.

The S&P 500 posted 5 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 56 new highs and 171 new lows.

(Reuters Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)

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If better-than-expected quarterly results from three of the nation's biggest financial firms are any indication, there might be bargains lurking among bank stocks.

JPMorgan Chase (JPM, $112.92), Wells Fargo (WFC, $43.89) and Citigroup (C, $43.55) marked the unofficial opening of the third-quarter earnings season on Friday, and they did so on an upbeat note. 

Indeed, all three big banks exceeded Wall Street's earnings per share estimates, and by wide margins at that.

Shares in the three lenders rose sharply on the news, even as the broader market sold off. True, the market pretty much always overreacts – both to the upside and downside – in the immediate aftermath of a news event such as earnings.

But the buoyancy exhibited by JPM, WFC and C after their respective earnings reports might just mean that bank stocks have been beaten down beyond reason heading into what is widely expected to be a brutal third-quarter earnings season. 

JPM's Bottom Line Beats the Street

JPM, a component of the Dow Jones Industrial Average and nation's biggest bank by assets, reported a less-than-feared 17% drop in third-quarter profit on Friday, as a jump in interest income cushioned a blow from higher loan loss provisions and a slump in dealmaking due to a worsening economic outlook.

Typically, rising interest rates are good for banks because they can charge consumers more, but the broader risk of an economic slowdown and higher cost of borrowing could cloud the economic outlook and hurt future earnings.

Chief Executive Jamie Dimon said in a statement that American consumers continue to spend and businesses remain healthy.

However, he added there were "significant headwinds immediately in front of us," noting stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine and the fragile state of oil supply and prices.

"While we are hoping for the best, we always remain vigilant and are prepared for bad outcomes."

For the quarter, JPMorgan's profit fell to $9.74 billion, or $3.12 per share. Revenue rose 10% to $32.72 billion, helped by a 22% increase in revenue from fixed income trading.

The bank's adjusted profit was $3.36 per share, well above analysts' average estimate of $2.88, according to Refinitiv data.

Credit Suisse analyst Susan Roth Katzke said "simply put, JPMorgan delivered a solid set of results, from top to bottom."

Citigroup and Wells Fargo Also Join the Beat Parade

Citigroup, the nation's third-largest lender by assets, reported net profit of $3.5 billion, or $1.63 per share, in the three months ended Sept. 30. Analysts on average had expected a profit of $1.42 per share. 

True, the bank reported a 25% year-over-year drop in third-quarter profit, hurt by having to set aside more funds to cover soured loans from a potential economic downturn and a slump in investment banking business. However, signs abound that Citigroup's turnaround efforts are beginning to bear fruit. 

Meanwhile, analysts were also too pessimistic about Wells Fargo. The nation's fourth-largest bank reported a 31% decline in third-quarter profit, hurt by costs related to a fake accounts scandal and higher loan-loss reserves.

Yet, like its fellow bank stocks, WFC beat estimates. On an adjusted basis, the lender earned $1.30 per share, or far more than the Street's forecast for $1.09 per share.

Of these three bank stocks, only WFC is beating the broader market so far this year. Shares in Wells Fargo were off almost 12% for the year-to-date through Oct. 13. JPM and C were down 31% and 29%, respectively, over that span, while the S&P 500 was off 23%.

Meanwhile, Buy Calls Abound on the Street

Anytime a stock sells off that hard, bulls can usually point to valuation as a reason to be constructive on a name. Happily for bulls, these banks' quarterly reports make such arguments even more convincing. 

And not for nothing, but industry analysts were already collectively optimistic about these three bank stocks at their current levels.

JPM carried a consensus recommendation of Buy heading into its third-quarter earnings report, albeit with somewhat mixed conviction. Of the 26 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 10 rated it at Strong Buy, six said Buy, nine had it at Hold and one called it a Strong Sell. 

Citigroup also scored a consensus Buy recommendation, with seven Strong Buy calls, two Buys, 14 Holds and one Strong Sell. 

WFC, meanwhile, sported a consensus recommendation of Buy with high conviction. Of the 26 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 12 called it a Strong Buy, nine said Buy and five called it a Hold. 

And make no mistake, we're already seeing some analyst upgrades on these bank stocks roll in. CFRA Research upgraded WFC to Hold from Sell on Friday thanks to the bank's third-quarter results. 

The Bottom Line

If there was a sliver of a silver lining to be found heading into what is forecast to be the worst earnings season since the height of the COVID-19 pandemic, it was this: Analysts' estimates were so low that companies should be able to trip over them.

If nothing else, results from JPM, C and WFC accomplished exactly that – at least as far as bank stocks are concerned.

Reuters reporters Mehnaz Yasmin, Lananh Nguyen, Niket Nishant and Noor Zainab Hussain contributed to this article.

While the best rewards credit cards can help you rack up cash back, points or miles on purchases, they usually come with high interest rates. Because of this, balances on your card can be challenging to pay off, especially if you don’t know your card’s annual percentage rate (APR).

According to LendingClub's recent research, 47.1% of cardholders carrying a balance don’t know their credit card APR, an alarming number, considering the average credit card interest rate was 24% as of February 2025.

So, what is APR? Here's what you need to know.

What is APR?

The APR associated with your credit card is your card's interest rate. In other words, it's how much extra money you'll pay on any balance you don't pay off in full at the end of each billing cycle.

APR is typically stated as a yearly rate, and it can be fixed or variable. If you don't know your APR, you can find it in your credit card's terms and conditions. Or, when you review your statement it will appear on there.

Most credit cards operate on a variable rate, meaning the rate can change, often rising or falling in tandem with interest rates set by the Federal Reserve. When the Federal Reserve Board raises short-term interest rates, interest rates on credit cards and most other lending and savings products typically increase, like mortgages, home equity lines of credit, high-yield savings accounts and other loans.

Currently, there's mixed views on where interest rates go from here. The Federal Reserve ended 2024 with three rate cuts, but didn't follow suit at its January meeting. With talks of tariffs being imposed, the safe bet is there might be fewer rate cuts in 2025, especially if those tariffs increase inflation.

How does APR affect me?

If you’re carrying a balance on a credit card with a high APR, plan to pay it off as soon as possible without adding any new purchases, or else you'll be stuck with expensive interest payments and can end up in credit card debt.

If you are struggling to keep up with interest payments on your credit card, applying for a balance transfer credit card to pay off credit card debt can be beneficial. Balance transfer credit cards offer an introductory 0% APR for qualifying balance transfers.

The length of these introductory periods varies, but some of the best balance transfer cards allow you to avoid interest rates for up to 21 months. You can also check to see if any current cards in your wallet are offering balance-transfer promotions.

Keep in mind that with any balance transfer, if you don’t pay your balance by the time the promotion ends, any balance left over is generally subject to your card’s normal interest rate. And read the fine print — your balance could be subject to retroactive interest charges.

Use cash back incentives

Another way to tackle interest is to use your card for everyday purchases like groceries and utilities. Many credit card issuers offer higher cash back incentives when you use your card for travel expenses, grocery, dining out or shopping. To demonstrate, the Blue Cash Preferred® Card from American Express gives you 6% cash back on grocery purchases for the first $6,000 charged. Once you exceed this limit, it defaults to 1% back.

The key with this approach is to alter how you pay for budget items. Say you have a statement balance of $400, and if you don't pay that in full next month, then you'll have interest accrue. Instead of using your debit card for groceries and gas, use your credit card and charge these expenses. Once they clear, pay them off immediately.

This approach achieves multiple things: One, it helps you pay off more of your statement balance each month. Two, with the cash back rewards you earn, you could pay off interest quicker in the form of statement credits. Lastly, you're still spending within your budget, you're just altering the payment method you use.

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Stocks made a valiant rebound attempt on Friday, spurred by a sign that consumers haven't thrown in the towel.

The Commerce Department this morning said retail sales rose 1% month-over-month in June. While most of the increase was a result of higher gas and food prices, Wall Street was still pleased that the figure marked an improvement over May's modest decline and came in above economists' consensus estimate for an increase of 0.9%.

"Spending was broad based and not just boosted by more money spent on gasoline," says Jeffrey Roach, chief economist for independent broker-dealer LPL Financial.

"Given this report, the U.S. might actually post positive growth figures for Q2 and avoid two consecutive quarters of negative growth," Roach adds. "The Fed could try to use this data to support a larger-than-expected hike later this month. Right now, the Fed is focused on the data and if the consumer is stable enough, the Fed could indeed implement a large hike without breaking the economy."

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In other economic news, the University of Michigan's preliminary consumer sentiment survey for July rose to 51.1 from June's all-time-low reading of 50.0, while industrial production contracted 0.2% in June, its first month-over-month decline this year.

Financials (+3.4%) led the charge, as positive earnings reactions for Citigroup (C, +13.12%) and Wells Fargo (WFC, +6.2%) sparked a broad rally in bank stocks.

At the close, the Dow Jones Industrial Average (+2.2% at 31,288), S&P 500 Index (+1.9 at 3,863) and Nasdaq Composite (+1.8% at 11,452) were all higher. However, on a weekly basis, all three major benchmarks ended lower.

Other news in the stock market today:

• The small-cap Russell 2000 soared 2.2% to 1,744.
• U.S. crude futures rose 1.9% to settle at $97.59 per barrel.
• Gold futures gave back 0.1% to finish at $1,703.60 an ounce.
• Bitcoin continued to bounce, gaining 2.6% to $21,138.36. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• UnitedHealth Group (UNH) was the best Dow Jones stock today, jumping 5.4% after earnings. In the second quarter, UNH reported earnings of $5.57 per share on revenue of $80.3 billion, beating analysts' consensus estimates for earnings of $5.20 per share on $79.7 billion in sales. "Encouragingly, UNH's medical care ratio edged down 50 basis points quarter-over-quarter to 81.5% as COVID-19 activity moderated and should support improved profitability over time," says CFRA Research analyst David Holt, who maintained a Strong Buy rating on the stock. "We think UNH enters the second half in a position of strength, with momentum in its shift to value-based care, especially with further integration of pharmacy-related services. UNH's capital positioning also remained strong in Q2, at $6.9B (1.3x net income), leaving ample flexibility to add physicians in Optum Health and maintain attractive shareholder returns via dividends and repurchases."
• Pinterest (PINS) spiked 16.2% after a report in The Wall Street Journal indicated Elliott Management has built a more than 9% in the firm. The activist investor has had plenty of exposure to social media companies, having previously held positions in Twitter (TWTR) and eBay (EBAY).
• Speaking of Twitter, the stock jumped 3.2% ahead of an appearance on next week's earnings calendar.

How to Choose a Mutual Fund

"Are we there yet?" That's the question many may be asking themselves right now following a first half in which inflation, the Fed tightening cycle and the stock market have taken us on a wild ride, say Carl Kaufman, Bradley Kane and Craig Manchuck, managers of the Osterweis Strategic Income Fund (OSTIX).

"Understandably, investors are anxiously awaiting better news – some tangible evidence we have 'arrived' at the bottom of whatever this is," they say. "The stakes are high, as the specter of recession looms over the economy while we try to figure out where we are, but sadly, the answers are not a simple yes or no."

Investors looking to find calm in the uncertainty might want to give the wheel to skilled, seasoned managers. There is no shortage of mutual funds to choose from, including Kiplinger's favorite low-cost offerings to fill just about every portfolio need. And while sifting through the onslaught of options available is one of the hardest parts of choosing a mutual fund, there are several steps to take to see what works best for you. Read on as we show you the best way to narrow the field.

One trading session after the S&P 500 narrowly escaped bear-market territory, U.S. equity bulls went on the offensive in a day of robust and widespread gains.

A few single-stock headlines did some of the driving Monday. JPMorgan Chase (JPM, +6.2%), for instance, rocketed higher after CEO Jamie Dimon said "there's a very good chance" that his bank would hit a key performance target (17% return on tangible common equity) in 2022, and possibly exceed it in 2023. The announcement, a reversal of more dire guidance earlier this year, sent the sector, including Citigroup (C, +6.11%), Bank of America (BAC, +5.9%) and Wells Fargo (WFC, +5.2%), higher too.

Also Monday, shares of VMware (VMW, +24.8%) popped amid a Bloomberg report that semiconductor firm Broadcom (AVGO, -3.1%) was in talks to acquire the $40 billion virtualization and cloud computing firm.

While little information about a potential deal was available, Stifel analyst Brad Reback says "We believe it makes sense on many fronts as a Broadcom-controlled VMware will likely be much more profitable, less dependent on top-line growth and have less pressure to accelerate its ongoing shift to a (software-as-a-service) model."

The Dow Jones Industrial Average climbed 2.0% to 31,880, while the Nasdaq Composite was up 1.6% to 11,535. And all 11 of the S&P 500's sectors finished in the green, pushing the index 1.9% higher to 3,973 to give it some distance away from bear-market territory.

Some of the day's upward momentum might have been simply good old-fashioned dip-buying now that equity valuations have cooled off significantly from earlier-year levels. "Remember when stocks looked expensive on valuation?" say BofA Securities researchers. "The forward P/E ratio of the S&P 500 is now 16.5x, down from the high of 21.4x."

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But investors might want to stay cautious, given a number of previous head fakes from the market. Michael Reinking, senior market strategist at the New York Stock Exchange, said it would be important for the S&P 500 to, among other things, close above Friday’s high, which it did.

"One thing that I will highlight that is different about today's rally than the last few attempts is that while the strength is broad-based, the leadership is coming from financials, and not just the beaten-up long duration/tech stocks that have led to the downside."

Other news in the stock market today:

• The small-cap Russell 2000 was 1.1% better to 1,792.
• U.S. crude oil futures eked out a marginal gain to end at $110.29 per barrel.
• Gold futures rose 0.3% to settle at $1,847.80 an ounce, marking a third straight win.
• Bitcoin recovered to above the $30,000 level over the weekend, but shed all of those gains Monday afternoon, hitting $29,058.38, off 0.7% from Friday afternoon's prices. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Autodesk (ADSK) shed 4.1% after Deutsche Bank analyst Bhavin Shah downgraded the AutoCAD software developer to Hold from Buy. This comes ahead of ADSK's fiscal first-quarter earnings report, set to be released after Thursday's close, with Shah noting that recent conversations with platinum partners indicate mixed quarterly results. The analyst also points to the potential for downside revisions to fiscal-year estimates due to slowing adoption of multi-year contracts, as well as forex and Russia-related headwinds.
• Starbucks (SBUX) became the latest company to announce it is completely exiting operations in Russia, joining the likes of McDonald's (MCD) and Exxon Mobil (XOM). The coffee chain was one of many companies that pulled out of Russia when the country invaded Ukraine earlier this year. Starbucks has been in the Russian market for 15 years and has 130 locations throughout the country that account for less than 1% of its annual revenue. CFRA Research analyst Catherine Seifert maintained a Hold rating on SBUX in the wake of the news. "SBUX said it plans to pay associates in Russia their salaries for the next six months and provide assistance as they 'transition to new opportunities outside of Starbucks,'" the analyst says. "Weighing still-decent sales trends with an expected margin contraction in 2022, we view the shares as fairly valued versus peers, but worth holding."

Get the Best of Both Worlds. Get GARP.

Until the light at the end of the tunnel is identified as the sun, and not an oncoming train, investors would be wise to be especially discriminating when considering any new positions. Value stocks continue to be a popular choice among the analyst community, for instance, as Wall Street continues to severely punish gaudily priced stocks at the faintest whiff of trouble.

Wells Fargo Investment Institute strategist Chris Haverland and analyst Austin Pickle suggest looking at more than just price, however.

"We believe multiples may continue to decline in the near term as investors price in the increasing likelihood of a recession," they say. "In this environment, we favor focusing on reasonably priced, high-quality U.S. companies with consistent revenue and earnings growth."

Investors looking for this blend of value and growth are looking for "GARP": growth at a reasonable price. By focusing on both traits, investors can improve their chances of avoiding both stocks at high risk of a valuation-related tumble, as well as companies that are merely cheap because their prospects are lacking. Read on as we explore seven great GARP stocks that fall into this happy middle ground.

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

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

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

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

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

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

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

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

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

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

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

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

Other news in the stock market today:

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

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

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

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

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

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

Overdraft fees may eventually become a thing of the past. One large bank, Capital One, recently eliminated them, and Chase has made it easier for customers to fund their account if they overdraw it. Other banks have also eliminated overdraft fees or relaxed their policies, including Bank of America and Wells Fargo.

According to a recent Bankrate study, the average overdraft fee is a whopping $33.58. Banks have historically relied on the fees as a major source of revenue, but making overdraft policies more consumer friendly is a big trend in banking right now, says Ken Tumin, founder of DepositAccounts.com. Banks have been feeling the pressure from consumers and government officials to get rid of the fees. The Consumer Financial Protection Bureau is currently drafting rules outlining when a lender can charge an overdraft fee and will heavily scrutinize firms that rely on such charges. Tumin thinks more big banks will get rid of the fees, while smaller banks and credit unions will modify existing policies. Smaller banks typically need to charge such fees to stay profitable.

While Capital One has gotten rid of overdraft fees altogether, Chase is giving customers who overdraw their account by $50 or less a grace period: They have until the end of the next business day to replace the overdrawn funds without incurring a fee. The fee kicks in if the amount overdrawn is more than $50 or the funds aren’t replaced.

Bank of America will cut its overdraft fee to $10 from $35 for customers starting in May, and Wells Fargo announced a 24-hour grace period to fund overdrawn accounts and the elimination of transfer fees from linked accounts. Internet bank Ally has eliminated overdraft fees. And regional bank Huntington Bank, with branches in 12 states, has implemented a 24-hour grace period.

Meanwhile, if you overdraw your account, call your bank as soon as you notice. It may be willing to waive the fee if you haven’t overdrawn your account before.

Here we go again. The earnings calendar is set to start filling up, with travel name Delta Air Lines (DAL, $41.76) and big banks BlackRock (BLK, $890.90) and Wells Fargo (WFC, $55.01) among the first companies slated to report fourth-quarter results.

"Earnings are expected to grow 20% in the fourth quarter – which, while down from prior quarters, is still quite strong – and end the year with nearly 40% growth," says Brad McMillan, chief investment officer for Commonwealth Financial Network.

And if this metric exceeds that 20% estimate in Q4, it will mark the fourth straight quarter of earnings growth above 20%, according to John Butters, senior earnings analyst at FactSet Research Systems.

Still, "Analysts and companies have been less optimistic compared to recent quarters in their earnings estimate revisions and earnings outlooks for the fourth quarter to date," Butters adds. As of mid-December, 56 S&P 500 companies had issued negative earnings per share (EPS) guidance, compared to 37 that had issued positive guidance, on average, for the quarter.

Analyst Sees Solid Q4 Earnings for Wells Fargo

Big banks will dominate the earnings calendar early on, and these lower earnings estimates are found throughout the industry.

"All the large banks show the upcoming fourth quarter as the lowest estimated revenue and EPS to date in 2021," says CFRA Research analyst Kenneth Leon. "We are likely to see continued low-to-moderate credit risk to credit cards, commercial and industrial loans, commercial real estate and trading and counterparty losses."

However, for Wells Fargo, which is slated to unveil its fourth-quarter results ahead of Friday's open, Leon is confident the big bank will deliver a turnaround that will result in higher capital returns.

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"We think WFC should benefit from favorable industry trends, and management's focus on execution has improved. While the pandemic remains uncertain, we expect Q4 2021 and 2022 to show improved loan activity and higher net interest income than the first half 2021."

Leon also expects "a rebound in consumer loan demand, card activity, and higher loan balances, as well as personal and small business loans," and points to Wells Fargo's technological innovations, including its mobile, cloud-based consumer banking platform, as reasons to be upbeat toward the big bank.

He has a Buy rating on the financial stock and he's certainly not alone. According to S&P Global Market Intelligence, 11 analysts say Wells Fargo is a Strong Buy and five call it a Buy. This compares to 11 Holds and not a single Sell or Strong Sell.

As for WFC's fourth-quarter results, the Wall Street pros, on average, are targeting a 4.3% year-over-year (YoY) improvement in revenues to $18.7 billion. Earnings are expected to arrive at $1.09 per share, up 70.3% from the year prior.

BlackRock Stock Choppy Ahead of Earnings

BlackRock is another large financial institution set to report ahead of the Jan. 14 open. Shares of the world's largest exchange-traded fund (ETF) operator have been choppy over the past six weeks or so, but still remain up roughly 22% on a 12-month basis.

Can a strong earnings report be the catalyst for BLK stock's next leg higher?

Analysts are a little scattered on the subject. On average, the pros expect BLK to report fourth-quarter revenues of $5.1 billion, a 14.5% YoY improvement. Earnings, on the other hand, are expected to decline 1.4% from the year-ago period to $10.04 per share – though analysts' Q4 EPS estimates range from a low of $9.50 to a high of $10.45.

Still, there are several analysts who see reason for optimism. "BLK remains well-positioned for growth across a broad array of products (ETFs, Aladdin and Private Markets) and themes (sustainability, China, retirement gap and democratization of alternatives)," says BMO Research's James Fotheringham. He has a Market Perform rating on the financial stock, which is the equivalent of a Hold.

"We expect BLK to continue to steal share from its traditional asset management peers," he adds.

And CFRA Research's Catherine Seifert (Strong Buy) thinks favorable fund flow trends, like the nearly $328 billion of net inflows BLK recorded in the first nine months of 2021, will lead to a 15% rise in revenues for fiscal 2021.

"BLK shares trade at a premium to peers and we expect the firm's dominance in the asset management industry, coupled with its solid execution, and growing technology services division, to enable the shares to retain this premium," she adds.

Analyst Estimates Vary for Delta Air Lines Earnings

It's not only about big banks this week. Airline giant Delta Air Lines will unveil its fourth-quarter results ahead of the Jan. 13 open.

DAL stock sold off sharply in late 2021, falling from its mid-November peak around $45.50 to an early December low near $33.50, though it has since recovered back up to the $42 per-share price point.

This selloff was in part related to uncertainty surrounding the omicron variant of COVID-19. However, Raymond James analyst Savanthi Syth believes "the indiscriminate selling" created buying opportunities for investors looking to "gain exposure to high-quality airline stocks," such as Strong Buy-rated DAL.

For DAL's fourth quarter, Syth is expecting the airline to record a per-share loss of 40 cents – a vast improvement over the $2.53 per-share loss it suffered in Q4 2020.

The consensus estimate among Wall Street pros, though, is for DAL to swing to a fourth-quarter profit of 12 cents per share. Revenue, meanwhile, is expected to land at $9.1 billion (+130% YoY).

After lagging their growth-oriented counterparts for a decade, value-priced stocks stumbled even more when COVID arrived, says Charles Pohl, a comanager of the value-minded fund Dodge & Cox Stock (DODGX), a Kip 25 selection. Growth stocks beat value stocks by a cumulative 233 percentage points over the 10-year period ending in September.

“It’s the biggest 10-year divergence ever,” Pohl says.

But value stocks have shown signs of life lately, boosting Stock, which logged a 12-month return of 12.7% through Dec. 4. That lagged the S&P 500 Index, but beat the 5.5% return of the Russell 1000 Value Index, which tracks bargain-priced large-company stocks.

DODGX's healthy dose of stocks in the financial sector (26% of assets) and energy (7%) relative to the broad market were a drag in early 2020. But later in 2020, these stocks have rallied on sentiment that a vaccine could bolster an economic recovery.

Investors, says Pohl, “are starting to look through the downturn that was created by COVID.” Shares in Bank of America (BAC), Capital One Financial (COF) and Wells Fargo (WFC), all top-10 fund holdings, each gained more than 20% in the three-month period ended Dec. 4, beating the 10.4% gain in the S&P 500.

But short-term returns aren’t the focus of the eight managers at Dodge & Cox Stock. They like to buy with an eye toward holding stocks for at least three to five years, and typically longer. They invest in companies that have good long-term prospects for earnings growth and cash-flow generation, and that are also cheaply or reasonably priced.

Stock’s 10-year annualized return, 12.4%, beats the Russell 1000 Value Index and 93% of the fund’s peers (funds that invest in large companies with bargain-priced stocks). But it lags the S&P 500.

Despite the recent rebound, there’s still a wide disparity in valuation between growth and value stocks by standard measures, including price-to-earnings, price-to-book-value and price-to-sales ratios. Historically, says Pohl, that has been a good predictor of value stocks taking the lead.

“It has been an extremely tough decade for value stocks and for value stock fund managers,” says Pohl. “But that’s a good setup for a good run going forward.”

We rarely worry about whether the dollar is strong or weak relative to other foreign currencies, unless we have plans to travel abroad and need euros, yen or pesos (although we’re not doing much of that lately). Even so, moves in the dollar can affect your port­folio in surprising ways.

After a decade of nearly uninterrupted gains, the dollar sank precipitously all summer against a basket of foreign currencies. The greenback stabilized in September, however. Overall, since the start of the year, the dollar is lower by only 3%.

But many strategists expect the U.S. currency to fall into a more persistent decline over the medium-to-long term, thanks in part to low interest rates that the Federal Reserve has signaled will stay low for at least three years. “Mounting budget deficits, an expanded Federal Reserve balance sheet and an increased money supply” are weighing on the dollar, too, says Chao Ma, a global strategist at Wells Fargo Investment Institute. “We expect the U.S. dollar to stay in a structural bear market.”

A weakening dollar can be good for certain investments. U.S. companies that generate a significant chunk of revenues abroad will get a boost from the weaker dollar as money made overseas is converted into greenbacks. When the buck is weaker relative to the euro, for example, the profits that sporting goods giant Nike makes in Europe will translate into more dollars when the firm repatriates those earnings. U.S. firms that export products overseas gain from a weaker dollar, too, because their goods become relatively less expensive for customers overseas.

Below we home in on investments we think will benefit best from a lower dollar. Bear in mind that these are not meant to be wholesale changes you make to your portfolio. Rather, they are small, tactical bets to consider given the outlook for a weaker buck. Returns and data are through October 9.

U.S. multinationals

U.S. companies that have substantial global operations will get a boost from the currency exchange when the dollar is weaker. Sales from foreign countries made up 43% of revenues for companies in the S&P 500 index in 2018, according to the latest data available from S&P Global. The following firms earn a high percentage of their revenues abroad, and they boast strong balance sheets and solid growth prospects, too.

Abbott Laboratories (symbol ABT, $110). Abbott pulls in 64% of sales from overseas. For years now, this maker of medical devices, generic drugs and nutritional drinks has focused on building a presence in emerging markets, where sales are growing fast.

The company’s acquisitions of Alere and St. Jude Medical in 2017 were key to beefing up its global business. Alere gave Abbott a top spot in point-of-care diagnostic tests (the ones administered in your doctor’s office, such as the test for the flu). And with St. Jude Medical, Abbott now dominates the worldwide cardiovascular device market. The purchases helped to drive the company’s overall growth in revenues in recent years, according to Abbott, particularly in emerging markets, which represent 40% of total sales.

Of course, the firm has other pluses. Its continuous glucose monitoring system, Freestyle Libre, is a top choice among diabetes patients—instead of finger sticks, a sensor worn on the body tracks glucose levels constantly. Sales of Freestyle Libre increased 40% in 2019 from the year before; more than 2 million patients worldwide use the device.

Based on analysts’ earnings expectations over the next four quarters, the stock currently trades at a price-earnings multiple of 27—just a little higher than the average multiple of 28 in relation to expected earnings at which the stock has traded over the past three years. The firm’s rapid-result COVID diagnostic test has propelled the shares higher this year. Even so, Credit Suisse analysts Matt Miksic and Vik Chopra expect significant share-price gains over the next 12 months.

Activision Blizzard (ATVI, $78). Just over half of annual revenues at Activision Blizzard come from abroad. In the future, overseas sales may make up even more of total revenues. For starters, the growing shift of gaming to mobile devices (from consoles and computers) has expanded the potential market across the globe, and Activision hopes to pounce on it.

In fact, it already has. In late 2019, Activision launched a mobile-device version of Call of Duty, its hugely successful war game. Since then, the game has tripled its reach, according to the company, topping the charts for installments in more than 150 countries.

Activision’s e-sports leagues are also extending the company’s global reach. This year, Activision started a professional league for Call of Duty that now plays in nine U.S. cities and London, Paris and Toronto. It follows the format of the league for the firm’s game Overwatch, a team-based shooting game set in the future, that plays in multiple cities in China, Korea, Europe and, of course, the U.S.

Activision has racked up bonus points from a boost in gaming during the pandemic-related lockdown. And the November–December release of two next-gen gaming consoles, Microsoft’s Xbox Series X and Sony’s PlayStation 5, may gin up another wave of enthusiasm in the months to come.

Analysts expect 16% average annual earnings growth over the next three years, according to Zacks Investment Research, and shares trade at 27 times expected earnings for the next four quarters—below the typical multiple of 32 for the hobby and games subindustry.

Autodesk (ADSK, $238). The world of computer-aided design software is borderless, which is why 66% of annual sales at Autodesk, the software company best known for its architecture, engineering and construction software, come from outside the U.S. The company translates its software into dozens of languages, including German, French, Russian, Japanese, Korean and Chinese. Research and product-development work is global, too, conducted in the U.S., China, Singapore and the U.K.

The firm’s revenues from recurring software subscriptions—more than 90% of total sales and growing fast—provides a cushion in difficult times. Customers are sticky—once comfortable with a software program, they’re less likely to switch to another. And the potential market is growing. “Autodesk is well positioned to benefit from the ongoing digital transformation of business,” says Goldman Sachs analyst Heather Bellini, who rates the stock a “buy” and predicts annual sales growth of 16% over the next five years.

Earnings are growing even faster. Analysts expect 32% average annual growth in profits over the next three years. Such high-octane growth can be pricey. Shares currently trade at 84 times expected earnings for the next four quarters. Plan to invest for the long term, and either buy on dips or buy shares at regular intervals over time to lower your average cost per share.

Estée Lauder (EL, $225). More than 70% of revenues at skin care and cosmetics company Estée Lauder come from outside the U.S. And business in China, home to 17% of company revenues, is booming. In the quarter that ended in June, sales in China increased 50%—thanks to robust growth in online transactions—compared with the same period the year before. And the company continues to gain share in China’s high-end beauty market, says Stifel analyst Mark Astrachan. He rates the stock a “buy” and expects a 9% climb in annual revenues for the fiscal year that ends in June 2021, along with a 21% jump in earnings.

Founder Estée Lauder started the company 74 years ago. Today, the firm owns two dozen brands, including Aveda, Bobbi Brown, Clinique, Origins and La Mer, and its products are sold in more than 150 countries.

Like the promise it makes to its customers, Estée Lauder (the company) is looking good for its age. In August, it announced a two-year plan to emphasize high-growth areas, including e-commerce, skin-care lines and China sales. The company will shutter 10% to 15% of its physical stores, pare down its distribution network and pull out of department stores with underperforming counters. Astrachan says these moves could yield $300 million to $400 million in savings over the next two years.

LAM Research (LRCX, $363). A surge in demand is coming for memory chips, and that’s good for Lam Research, a leader in the processes critical to making them. The firm makes equipment that chip manufacturers need to produce the increasingly tiny and complex integrated circuits we use in our cell phones and computing devices. Chipmakers are able to engineer wafers—thin chip slices—at a microscopic level using Lam Research’s etching, cleaning and film-depositing systems.

The company’s international edge comes courtesy of the industry it sells to: Most semiconductor chips are made overseas. According to the U.S. International Trade Commission, 84% of all U.S. chip manufac­turing equipment sales take place overseas. That’s why Lam Research has multiple sales offices throughout Asia (including China, Japan, Malaysia and Korea) and Europe. The company consistently logs more than 90% of its annual revenues from outside the U.S.

Analysts expect earnings at the company to increase an average of 13% per year over the next three years—roughly in line with its industry—according to Zacks. And the stock trades at 17 times expected earnings for the next four quarters. That’s a discount to the broad U.S. market, which trades at 22 times expected earnings, as well as to the chip-equipment wafer fab­rication industry (Lam’s peer group), which trades at an average price-earnings multiple of 28.

Nike (NKE, $131). Nike’s foreign footprint is growing. In its last fiscal year, which ended in May, non-U.S. sales accounted for 61% of revenues at the sporting goods and apparel company, up from 59% and 58% in the previous two years. The firm has e-commerce platforms in 45 countries, and 758 stores (Nike- and Converse-branded shops) outside the U.S. It has offices and subsidiaries in dozens of developed and emerging countries, from Argentina and Australia to the U.K., Uruguay and Vietnam. In other words, Nike is everywhere.

The pandemic took a bite out of sales in the first half of 2020, but the company expects business to rebound by early 2021. Wedbush Securities analysts Christopher Svezia and Paul Nawalany, who recommend the stock, expect a recovery even earlier—before the end of 2020, thanks to brisk sales online and in stores worldwide, as well as a robust wholesale business in China. The company should emerge from the pandemic stronger, they say.

All that muscle will cost you. But even though analysts expect a 49% jump in earnings for the fiscal year that ends next May and a 41% jump the year after, shares currently trade at 43 times projected earnings for the next four quarters. That’s lofty, but not out of line considering the company’s strong earnings profile.

Nvidia (NVDA, $551). Like Lam Research, Nvidia conducts most of its business overseas. The company is best known for its PC-gaming chips, which deliver high-definition graphics. In the fiscal year that ended January 2020, Nvidia raked in 92% of sales from abroad.

The stock is richly priced. Shares have soared in recent months and currently trade at 73 times projected earnings for the next four quarters. That said, analysts expect 20% average annual earnings growth over the next three years, ahead of the 9% three-year earnings growth rate for Nvidia’s peers. What’s more, Nvidia’s latest acquisition may enhance the firm’s profit-growth prospects.

Nvidia announced in September it plans to acquire ARM, a U.K.-based computer chip and software design company. BofA Securities analyst Vivek Arya says the $40 billion deal—the chip industry’s biggest ever—has the potential to “reshape the landscape” of high-performance cloud computing, artificial intelligence, 5G and the Internet of Things, with Nvidia at the center. Arya says the acquisition could boost his long-term earnings estimates by 10% to 15%.

But the deal will require regulatory approval from the U.K., the European Union, the U.S. and China. Arya expects the transaction will face tough scrutiny because of its size, which could put pressure on the stock. Wait for the inevi­table dips to buy in.

PayPal Holdings (PYPL, $197). Just under half of PayPal’s revenues are generated outside the U.S. But the company is expanding its foreign operations. In 2019, PayPal bought stakes in Chinese online payment company GoPay and Argentinian e-commerce firm MercadoLibre. In May, it partnered with Gojek, a Southeast Asian online payment firm based in Jakarta.

Business overall is humming. In 2019, the number of active PayPal accounts increased 14% compared with the year before, the number of payment transactions climbed 25%, and the company’s total payment volume—the value of payments made through the platform—increased 23%.

The pandemic has turbocharged growth in e-commerce, and PayPal is in a sweet spot to benefit. Analysts expect average annual earnings growth of 21% over the next three years. Shares are expensive, at 65 times expected earnings for the next four quarters. Look to buy on dips and hold for the long haul.

cal gold bullion stored in vaults.

It seems that in the popular imagination, the Millennial will always be that youngish Starbucks barista who could never quite get their financial life in order.

But while perception may be slow to change, the reality is that the Millennials are all grown up. Almost everyone in this generation is 30 or older. And while they've been a little slower than previous generations to settle down and start families, they have adopted other trappings of early middle age, such as stock investing

For a generation known for doing things its own way and projecting their values with their pocketbook, the stock portfolios of Millennials are remarkably conventional. Apex Clearing prepared its quarterly review of Millennial stock portfolios, and of the top 10 stocks held by Millennials, most would be just as likely to be found in the portfolio of a Baby Boomer or Gen-Xer.

Apple (AAPL) and Amazon.com (AMZN) come in as the first and second most popular stocks among Millennial investors, and Microsoft (MSFT), Facebook (FB), Disney (DIS), Netflix (NFLX) and Advanced Micro Devices (AMD) take fourth, fifth, sixth, eighth and ninth place, respectively. This is essentially a "who's who" of standard S&P 500 companies.

Electric vehicle darling Tesla (TSLA) was the third most popular stock in Millennial portfolios, and it was really the only stock in the top 10 you could argue is stereotypically Millennial.

What's far more interesting about the list, however, is which stocks have become more popular among Millennials across the year – indeed, some names have shot near the top of the list over the past few months, and several stocks previously not on Millennials' radar have suddenly burst onto the scene.

Today, we'll look at 16 of the most popular stocks among Millennials that have really caught their eye over the past few months. All have seen significant jumps in the rankings since the end of March, and several will likely surprise you.

Data is as of Sept. 10. Millennial stock ranking data provided by Apex Clearing.

• Rank: 31st
• Move from Q1: +20

Warren Buffett's Berkshire Hathaway (BRK.B) also is a popular stock among Millennials, rounding out the top 10. Well, it turns out that one of Berkshire's famously large holdings – at least until of late – is working its way up the ranks.

Wells Fargo (WFC, $23.95) jumped to 31st place from 51st place the previous quarter, and this seems to be one of several cases of Millennials trying their luck as value investors. Wells Fargo's stock price is down by more than half this year. With the Federal Reserve keeping interest rates tethered near zero and loan losses likely to rise, the profit outlook for banks doesn't look particularly great.

But beyond the issues affecting the entire banking sector, Wells Fargo has been particularly hit hard, as a series of scandals over the past few years has really dented confidence. Wells Fargo shares are trading near 20-year lows, and the company recently slashed its dividend by 80%.

Perhaps Millennials believe that the bad news is finally priced in. After all, it's not every day you get the chance to buy a stock at prices first seen 20 years ago.

But the Oracle of Omaha appears to be tiring of waiting for the turnaround. While Wells Fargo has long been among Warren Buffett's favorite stocks, holding a 5.8% stake as of Berkshire Hathaway's last 13F, recent filings show that his position has since dropped to 3.3%, indicating a major haircut.

• Rank: 53rd
• Move from Q1: Previously unranked

XpresSpa Group (XSPA, $1.84) ranked 53rd in Millennial portfolios last quarter after not being ranked at all in Q1.

This operator of airport spas would seem to appeal to Millennials for a couple of reasons.

To start, Millennials have been known to favor experiences over material possessions. That's a dominant characteristic of the generation as a whole. So it's not strange to see them gravitating to a spa company.

But Millennials are also aspiring value investors who flock to deep potential bargains. Shares currently trade at $1.82 per share, reflecting a 1-for-3 reverse split executed back in June. As recently as 2018, shares traded above $90 per share (on a split-adjusted basis). XSPA caught plenty of investors' attention on news that the company planned to convert some of its airport spas to COVID testing centers, driving the stock 250% higher as of mid-June, but shares have collapsed since to about 10% lower than where they started the year.

We'll see how patient Millennials prove to be with XpresSpa stock. Even if virus fears dissipate tomorrow, travel will likely be depressed for a year or more, meaning revenues won't be recovering any time soon.

• Rank: 57th
• Move from Q1: +32

Another "experiences" stock that has grown in popularity among Millennials is MGM Resorts (MGM, $22.84). MGM was ranked 89th at the end of the first quarter, shooting up to 57th at the end of the second.

MGM operates gaming resorts in Nevada, Michigan, Mississippi and New Jersey, not to mention international locations in China and Japan. But its most famous properties are the Bellagio, Mandalay Bay and the MGM Grand on the Las Vegas strip.

This stock fits the pattern of several other value plays favored by Millennials. Leisure and hospitality companies such as MGM saw their businesses get obliterated by the COVID-19 pandemic. Even if the Las Vegas casinos are open, going to them isn't exactly pleasurable under these conditions. Who wants to play socially distanced blackjack behind a plastic shield?

By purchasing MGM, however, Millennials are signaling that they believe life will get back to normal soon enough and that Americans will enjoy rolling the dice again.

• Rank: 40th
• Move from Q1: Previously unranked

Biotech stock Moderna (MRNA, $57.56) is popular among Millennials, coming in at 40th in the second quarter after not being ranked at all in the first.

It's not hard to see the investment play here. Moderna is one of the leading candidates for a COVID-19 vaccine. The company is currently doing a trial on as many as 30,000 people, and with any luck we'll know whether or not the vaccine is effective by the fourth quarter of this year.

Millennials are betting that Moderna's vaccine is viable and expecting the stock to soar as a result.

Biotech investing is notoriously hard, of course. It's about as close to straight-up casino gambling as you can get in the stock market because the outcomes tend to be binary: Either a new treatment works, or it doesn't.

Perhaps this is why Moderna doesn't rank higher than 40th. While Millennials aren't opposed to rolling the dice here, they're smart enough not to overweight a position this speculative.

• Rank: 41st
• Move from Q1: +9

With the pandemic monopolizing the news cycle, socially responsible investing hasn't gotten a lot of attention this year. But it's interesting that it hasn't completely fallen off the radar screens of Millennial investors.

Beyond Meat (BYND, $143.04), which makes plant-based veggie burgers and other meat substitutes, climbed the ranks over the past quarter from 50th to 41st.

Beyond Meat is a feel-good story stock. While the Millennials buying it no doubt expect to turn a profit on it, they are also putting their money behind social causes they support. Ranching is believed to be a major contributing factor to climate change, which livestock responsible for about 15% of greenhouse gases. Plant-based meat substitutes are one way to attack this problem.

If you're buying Beyond Meat, it's because you see a vegetarian future. Because in the here and now, the stock's valuation looks questionable. It trades for 20 times sales and has never consistently turned a profit.

• Rank: 46th
• Move from Q1: Previously unranked

Genius Brands International (GNUS, $1.05) has suddenly found itself popular with Millennials. The stock was unranked in the first quarter but now finds itself ranked 46th.

Genius Brands creates and licenses "content with a purpose for toddlers and young children. That's a fancy was of saying educational cartoons. Some of its productions include Rainbow Rangers on Nick Jr. and Llama Llama on Netflix. And for the Kiplinger's readers looking to educate their children or grandchildren on basic investing concepts, Genius Brands produced Warren Buffett's Secret Millionaires Club.

Millennials aren't idle youth anymore. The bulk of the generation is now over 30 and making an attempt to settle down and start families. It's easy to see why Millennial parents have gravitated to Genius Brands. They are likely following Peter Lynch's timeless advice to invest in what you know. With kids spending more time at home during the pandemic – and with parents desperate to make that time more useful – it's not at all surprising to see educational cartoons gaining in popularity.

That said, it's possible some Millennials have cashed in their outrageous gains. GNUS shares remain up 285% at prices around $1 per share, but that percentage return was in the thousands this summer when GNUS shot to the $8-per-share level.

• Rank: 49th
• Move from Q1: Previously unranked

Like Tesla, Nikola (NKLA, $37.57), is very much a Millennial story stock. Millennials as a generation are concerned about climate change, and they view the transition to electric vehicles as part of the solution. While still early in the production stage, Nikola makes electric and fuel-cell 18-wheeler trucks. It also recently made headlines by signing a deal to supply 2,500 garbage trucks to Arizona-based Republic Services (RSG), and even more recently when General Motors (GM) took a $2 billion, 11% ownership stake.

Nikola didn't make the list in the first quarter because it didn't exist as a public company. It only went public on June 4. But by the end of June, it had already rocketed higher to become the 49th most popular stock in Millennial portfolios.

Nikola's newness is also likely a factor for Millennial investors. Millennials have shown interest in IPOs, and for all the talk of this generation being excessively frugal and fiscally conservative, they've definitely shown a willingness to selectively take risk.

But for all the positive headlines it has racked up, NKLA is mired in a serious negative news cycle right now. The company's shares dropped by double digits after short selling research firm Hindenburg accused Nikola of fraud. The company has since retained Kirkland & Ellis as it considers legal options and a response.

It will be interesting to see if Millennials have to stomach to hold on to it for another quarter.

• Rank: Seventh
• Move from Q1: +7

Perhaps the most surprising stock to see in Millennial portfolios is the only member of the top 10 we haven't mentioned yet: Boeing (BA, $157.69). It was the seventh most popular stock during the second quarter, up from 14th at the end of the first quarter.

While it might seem unexpected to see a gritty old industrial stock rank this high among Millennial buyers, it's not hard to understand the thought process. Millennials saw the stock get hammered when air travel ground to a halt, and they smelled a bargain. BA shares are off 55% from their 2020 highs, and that's after a significant rally – during the first-quarter bottom, the stock was down 73% from its 52-week highs – that has since started to fizzle out.

Boeing hasn't been a particularly easy stock to hold, and it hasn't just been because of COVID. BA shares were already reeling from the 737 MAX recall following two deadly crashes.

Millennials are betting that the worst is behind the company, and they could very well be right. But recovery here could be slow.

• Rank: 13th (Delta), 19th (American), 22nd (United), 33rd (Southwest), 45th (Spirit)
• Move from Q1: +7 (Delta), +27 (American), +35 (United), +55 (Southwest), previously unranked (Spirit)

Airlines were wildly popular among Millennials last quarter, as five major carriers cracked the top 100.

Delta Air Lines (DAL, $31.79) was the most popular, after jumping seven places over the last quarter to 13th. American Airlines (AAL, $13.01) made an even bigger move, popping from 46th at the end of the first quarter to 19th at the end of the second.

Not to be outdone, United Airlines (UAL, $36.45) shot from 57th to 22nd, jumping 35 places, and Southwest Airlines (LUV, $38.94) really upped the ante by moving 55 places from 88th to 33rd. Spirit Airlines (SAVE, $17.48) wasn't ranked at all in the first quarter and yet finished Q2 placed 45th.

As we said earlier, Millennials have been known to favor experiences over material objects, so perhaps it's not too surprising they see value in the COVID-wrecked airline sector. Most airline stocks still trade for less than half their pre-pandemic prices.

But we should probably remember that the Oracle of Omaha himself exited the airline industry months ago. Warren Buffett's Berkshire Hathaway liquidated its large positions noting that "the world has changed for the airlines."

Time will tell. In the meantime, it would seem that America's Millennials are betting that life gets back to normal sooner rather than later.

• Rank: 21st (Carnival), 25th (Norwegian), 35th (Royal Caribbean)
• Move from Q1: +17 (Carnival), +46 (Norwegian), +19 (Royal Caribbean)

Here are three more deep-value Millennial plays that yet again deal with travel. Cruise operators Carnival (CCL, $17.88), Norwegian Cruise Lines (NCLH, $17.93) and Royal Caribbean Cruises (RCL, $70.14) all saw major Millennial buying last quarter.

Carnival finished the second quarter ranked 21st, up from 38th the previous quarter. Of course, that pales in comparison to Norwegian Cruise Lines, which shot up from 71st to 25th. And Royal Caribbean put up a good fight too, jumping from 54th to 35th.

The Millennial case here is pretty obvious. Carnival and Norwegian both trade for less than a third of their pre-pandemic prices, and Royal Caribbean trades for roughly half. Millennials are betting that life returns to normal sooner rather than later and that passengers quickly forget the "petri dish" horror stories of March and April.

They might be on to something. Royal Caribbean noted in its most recent earnings release that demand for 2021 bookings was "remarkable."

Still, before we too excited, we should remember that cruise lines are still officially shut down in the U.S. through at least Oct. 31. And the industry might not rebound completely for months or even years. We'll see if the Millennial investors accumulating the shares have that kind of patience.

Investing

A Plug for Preferred Stocks

Preferred stocks, which are issued largely by banks, insurance companies and utilities, generally pay fixed dividends like bonds but trade like stocks. Stocks in Standard & Poor’s U.S. Preferred Stock index pay an average dividend yield of 5.6%. Though preferred dividends aren’t guaranteed—companies can trim or suspend them—the payment of these coupons takes priority over the payment of common-stock dividends (hence the term “preferred”).

These stock-bond hybrids were hit hard during the March sell-off—the S&P U.S. Preferred Stock index fell 31.0%, just shy of the 33.8% crash in Standard & Poor’s 500-stock index—and are now cheap on a historical basis, says Brian Rehling, head of global fixed income strategy at Wells Fargo Investment Institute. Preferred stocks will sell off when stocks do but, like bonds, are also sensitive to interest-rate moves, falling in price as rates rise. The credit quality of the typical preferred stock fund, double-B, is just below investment grade, and interest-rate sensitivity is comparable to the typical intermediate-term bond fund.

Consider iShares Preferred & Income Securities ETF (symbol PFF, price $33, expense ratio 0.46%). The exchange-traded fund, which has lost 9.3% since the start of the year—compared with a 10.7% loss in the S&P 500—yields 5.0%. Over the past decade, it has returned an annualized 5.2%. Invesco Preferred ETF (PGX, $14, 0.52%) is worth a look, too. It yields 5.4%. Over the past decade, PGX has returned an annualized 6.6%.

Good (and Cheap) Small Stocks

Small-company stocks are cheaper relative to stocks in the broad market than they’ve been in years. But during a recession, stick to firms with solid balance sheets and little debt.

Tech company Digi International (DGII, $10) has a strong market position tied to the internet of things, says Andy Adams, manager of Mairs & Power Small Cap. Digi provides real-time temperature-tracking systems that help CVS Health, among others, make sure their temperature-sensitive drugs are stored properly; Walmart uses Digi’s system to track temperatures for food storage. Still, shares are down 41% so far this year. “COVID will slow business at Digi” as customers put off purchases and equipment upgrades, says Adams, “but it won’t tamp long-term demand.”

For a diversified collection of small-company stocks, consider O’Shares FTSE Russell Small Cap Quality Dividend (OUSM, $22, 0.48%), an ETF that tracks an index of small companies with strong cash flows and earnings, low debt, and above-average dividend payouts. Over the past 12 months, OUSM held up better than the Russell 2000 small-company index, albeit with a 14.9% loss.

Funds That Reward Patience

In the latest salvo in the fund-fee wars, Fidelity Investments has launched funds with expense ratios that decrease the longer you hold them. The eight new funds invest in line with specific themes, across sectors, countries and company sizes. Fidelity Disruptive Automation (FBOTX), for example, invests in companies that design and make tools and processes for robotics, artificial intelligence and autonomous driving, among other things. Fidelity Disruptive Medicine (FMEDX) focuses on firms involved in robotic surgery, genomics and rare diseases. The longer you hold, the lower the funds’ fees; their expense ratio begins at 1.00% but drops to 0.75% after one year and 0.50% after three years. The typical sector fund charges an expense ratio of 1.30%.

Perks From Your Broker

Virtually all online brokers offer free trades on stocks and exchange-traded funds, along with ample research and tools. You might also gravitate to brokers offering features such as the ones below.

Sign-up bonuses. Most brokers will give new customers cash for signing up. Ally Invest has the most generous offer going, with up to $3,500 (for accounts of $2 million) when new investors transfer or open an account.

Dividend tools. Four brokers—E*Trade, Interactive Brokers, Merrill Edge and TD Ameritrade—have income-estimating tools that can help you keep on top of future payments. Each tool uses recent payout data to project the value and timing of your portfolio’s dividend payments over the next 12 months.

Partial-share purchases. Charles Schwab, Fidelity and Interactive Brokers have joined smaller brokers such as Robinhood and Stash in offering partial shares of stock. Schwab’s new feature allows investors to buy “slices” of stocks in the S&P 500 for as little $5. Fidelity and Interactive Brokers will let you buy as little as 1 cent’s worth of stock.

Food

You may have developed a habit of ordering in while sheltering in place, or you may have grown accustomed to having your groceries delivered to your front door. (Nearly one-third of U.S. households shopped for groceries online in March.) Usually, those con­veniences come at a premium, but you can find some great deals to help feed your food-delivery hankerings.

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Free grocery deliveries. Amazon Fresh grocery delivery is free for Prime members. Don’t mind buying in bulk? Boxed, a delivery service that sells foods, wine and household products, offers free delivery and no membership fees on all orders greater than $79.

Credit card perks. With some Chase cards, such as Chase Sapphire Reserve and Chase Freedom, cardholders are eligible for $60 in annual credits for food-delivery service DoorDash, as well as a free DoorDash Plus membership, which features free delivery from select restaurants. Amex Gold card­holders receive up to $120 in annual dining credits at food-delivery services Grubhub and Seamless. If you’re partial to Uber Eats, Uber Visa cardholders earn 5% cash back on all orders through the app, as well as 3% cash back on restaurant purchases.

Deals on prepared meals. Meal kits such as Blue Apron and Hello Fresh have been around for years, but they require you to cook. If you’d prefer to simply heat up prepared meals, you can try a number of oven-ready meal services—and many of them offer rewards to new customers. Freshly provides single-serving meals that heat up in the microwave in minutes, and it frequently offers deals for newcomers. In May, for example, it offered $60 off the first five orders. Or try Home Chef, which offers prepared meals that come in oven-safe trays; new members receive $100 off their first four boxes.

Don’t forget Fido. Pet Plate, which has no delivery fees, will drop off dog food that comes in convenient pre-portioned cups. Chewy, a pet food and supplies delivery service, offers free shipping on orders over $49 and up to 10% off select brands when you sign up for its repeat delivery service.

Home Office

As employers unveil plans to extend remote work options, it may be time for you to build a space that’s optimized to help you stay focused and productive (see below for computer and tablet deals).

Standing Desk

ApexDesk Vortex Series 60-inch ($498). “Sitting at your desk is so 20th century,” says Lance Ulanoff, editor-in-chief at tech product review site Lifewire.com. Ulanoff likes this wide standing desk—it has plenty of room for your laptop, monitor, mouse and other office gear. Working at a traditional desk? Give the Stand Steady Mega Standing Desk a look. At only $100, this desk topper turns any workspace into a standing desk.

Office Chair

Alera Elusion Mesh Mid-Back Swivel/Tilt Chair ($150). Spending long hours sitting at a computer can cause back and neck pain. Mélanie Berliet, general manager at home products review website The Spruce, suggests this affordable model, which features a contoured seat cushion designed to relieve pressure on your legs.

Computer Monitor

MSI Optix 32-inch 4K ($400). Working on a larger screen makes juggling multiple assignments a lot easier. This monitor has a curved screen with anti-flicker and blue light reduction technologies to help reduce eyestrain and fatigue. The caveat? “It’s not perfect,” says Justin Jaffe, a senior editor at CNET, a technology news and product review website. For example, its USB-C ports won’t power your devices, “but a 32-inch 4K display for $400 is a superb value,” he says.

All-in-One Printer

Epson XP-6100 ($150). This all-in-one inkjet printer lets you copy, scan and print documents from your phone or computer. “It’s easy to set up, has a reasonably compact footprint, and delivers good-enough photos,” says Jaffe.

Wi-Fi Extender

TP-Link RE360 ($30). This range extender is “far and away the best value on the market,” says Jaffe. The device is inexpensive, fast, reliable, works with just about every router out there and is easy to use.

Tech

We asked Louis Ramirez, deals editor for product review website Tom’s Guide, where to find the best bargains on a range of devices.

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Laptops. More people are working from home, and demand for laptops is up. For less than $600, stores such as Amazon, Best Buy, the Microsoft Store and Walmart are selling laptops with up-to-date hardware—look for one with a current, 10th-generation Intel processor, at least 8 gigabytes of RAM, and a minimum 256GB solid state drive (SSD). Amazon was recently selling an Acer Aspire 5 Slim laptop that fills the bill for $580—and sometimes the price drops to near $540, says Ramirez. If you want something simpler—say, for your child’s schoolwork—check out Chromebooks. You can usually find the Samsung Chromebook 3 for $199 or less, Ramirez says.

Tablets. “Tablet deals, particularly for the iPad, have been sporadic,” says Ramirez. But if you’re interested in an iPad Pro, you can find price cuts of about $100 to $150 on previous-generation models that came out in 2018. Check Amazon, Best Buy, Target and B&H Photo Video for deals. B&H, for example, recently sold an 11-inch, 256GB, Wi-Fi-only 2018 model for $800, a $150 savings. You may find the Microsoft Surface Pro 6 selling for up to $350 off at Amazon, Best Buy and the Microsoft Store.

TVs. Look for deals on 4K TVs from TCL, a brand that is “giving bigger manufacturers a run for their money when it comes to features, performance and price,” says Ramirez. Recently, Best Buy, Target and Walmart all sold a 55-inch TCL 4K Roku Smart TV for $300. And Best Buy sold a 75-inch model for $750.

Smartphones. Apple’s new iPhone SE has a standard starting price of $399—far lower than other current-generation iPhone models. It’s hard to take good photos at night with the phone, but “that’s really the only drawback” for most people, Ramirez says. And recently, you could buy it from Walmart for as little as $199 if you activated it with AT&T or Verizon Wireless. Android devotees should check out the OnePlus 8, which has a starting price of $699. “You get a top-of-the-line processor, a gorgeous display, 128GB of storage and 5G capability,” says Ramirez.

Fitness trackers and smart watches. Amazon has been running strong deals on Fitbits (about $50 to $100 off). If you want an Apple Watch 5 (the newest model), you may get a discount of $50 to $100 if you catch a sale through Amazon or Best Buy, says Ramirez. Best Buy regularly has “Apple Shopping Events” for various Apple products, and Ramirez expects discounts to be particularly aggressive for Father’s Day and Independence Day.

Wireless headphones. Amazon, Best Buy and Walmart usually offer the best deals on headphones. You may get discounts of $50 to $100 or more on Bose SoundSport and Beats by Dre Powerbeats3 headphones. For AirPods, look for discounts of about $20 to $40. And keep an eye on AT&T and Verizon, too. AT&T recently sold Apple Airpods Pro earbuds for $224 ($250 regular price)—the best deal Ramirez has seen—and you don’t have to be a customer of AT&T’s services to buy them.

Smart speakers. Amazon, Best Buy and Walmart have been selling Google Home and Amazon Echo smart speakers at prices near the lows they hit on Black Friday last year. The Echo Dot and Google Nest Mini have both dipped to $29 (both have a regular price of $50). “I think those prices will easily last through the summer,” Ramirez says.

Luxe for Less

Investing in designer apparel and accessories instead of lower-quality fast fashion items pays off when you factor in cost-per-wear. And as summer moves along, high-end department and specialty stores will be looking to clear out spring and summer inventory that accumulated during pandemic-related store closures.

Retailers

Shoppers can expect discounts starting at about 20% off on seasonal clothing, shoes, jewelry, belts and handbags at stores such as Bloomingdale’s, Neiman Marcus Last Call and Lord & Taylor, says Sara Skirboll, shopping and trends expert for RetailMeNot.com. Markdowns on affordable luxury brands, such as Calvin Klein, Diane von Furstenberg and Michael Kors, should last throughout the summer and include “friends and family” sales as well as end-of-season clearances, she notes. If you’re planning to shop online, be sure to sign up for e-mail sale alerts.

Online Consignment Shops

Also, look to luxury online consignment shops, such as Fashionphile.com, Rebag.com and TheRealReal.com, for deals on secondhand high-end clothing and accessories from the likes of Christian Dior, Hermès and Louis Vuitton. In addition to on-trend pieces, shoppers will find classic style staples that will last for years for a fraction of the retail price. For example, we spotted a pair of leather Yves Saint Laurent LouLou mule sandals, originally priced at $695 on YSL.com when new, listed in “very good condition” for $395 at TheRealReal.com (that’s nearly 45% off).

Luxury brands, including smaller-scale designers and boutiques, may even turn to online consignment shops in the months ahead as a way to sell spring and summer items through an additional sales channel, says Karin Dillie, director of B2B and estates for TheRealReal.com. Otherwise, these brands risk being stuck with seasonal inventory they may not be able to sell in-store -- especially if brick-and-mortar locations continue to remain closed until further notice.

Home Gym

The pandemic boosted sales for the at-home fitness industry and led many retailers to lower prices on exercise equipment, while also driving traditional brick-and-mortar businesses such as Orangetheory and Planet Fitness to stream free or low-cost exercise classes. If you’re building a home gym, here are six must-haves that won’t bust your budget, recommended by Louis Ramirez, deals editor at products review site Tom’s Guide. Note that some items may be temporarily out of stock.

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Treadmill

Xterra Fitness TR200 ($400). Want to conserve space? This folding treadmill features three incline settings for workout variety, a 5.5-inch blue backlit display that shows any of 12 preset programs, and a top speed of 10 miles per hour.

Rowing Machine

Sunny Health & Fitness SF-RW5639 ($165). This no-frills rower features 12 levels of resistance and an LCD display that shows time and calories burned. It’s small and doesn’t make much noise, “so you can use it while watching TV,” Ramirez says.

Elliptical Machine

Sunny Health & Fitness SF-E905 ($179). You can customize the difficulty of your workout with the machine’s eight levels of resistance. The digital monitor displays time, speed, calories and distance.

Stationary Bike

Marcy Upright Fan Bike ($350). The Peloton bike is a hot commodity, but its basic package costs $2,245. If you want something more affordable that’s still high quality, this Marcy model can also give you an upper body workout thanks to its dual-action arms, which mimic the motions you’d make on an elliptical machine, says Ramirez.

Weights

CAP Barbell Coated Hex Dumbbells ($9 to $139 per 2-piece set, depending on weight). These dumbbells, which come in pairs (weighing from 5 to 120 pounds), feature ergonomic steel-chromed handles and a coating that protects them from damage.

Free Online Exercise Classes

If you need a little motivation to keep hitting your new gym, there are a handful of great free workouts that you can try through streaming services or wellness apps. To name a few: Nike Training Club’s Premium subscription service (available on its mobile app), which offers more than 185 free workouts—including bodyweight, cardio, yoga and other classes—waived its $15 monthly fee indefinitely in March; Planet Fitness streams free 20-minute at-home workouts on its Facebook page; and 305 Fitness posts a free cardio class every day on its YouTube page.

Start a Podcast

When the cohosts of our personal finance show Your Money’s Worth left the friendly confines of the studio to record at home, we discovered that it’s easier than ever to produce professional-quality recordings from the dining room table, and the start-up cost is minimal.

We use the Samson Q2U Dynamic USB Microphone ($60 at Best Buy), which comes with a small tripod mike stand and plugs into your computer’s USB port. To monitor the sound quality, Tascam TH-02 studio headphones will run you $20 on Amazon.

To record yourself and your estimable guests, consider signing up for an account at Zencastr.com. You send your guests a link, and all they’ll need is a computer with a microphone. The site’s free version usually limits podcasters to eight hours and two guests per month, but those restrictions are being waived during the COVID-19 outbreak.

Finally, sign up with a service that will host your podcast on its website and get your show listed with distributors. Some sites do this free but may limit the amount you can upload or insert ads. For $13.50 a month, Simplecast users get unlimited uploads and audio storage, a customizable show website, and distribution to all the major outlets.

Cars

Where are the real deals for shoppers? First, where they’re not: in the new-car market. Dealers and manufacturers are pushing low (often zero) percentage rate financing rather than cash discounts in an effort to preserve profits when the market recovers.

But used-car prices at the wholesale level saw double-digit declines in March, thanks to a flood of vehicles coming off lease, new-ish cars being dumped by rental firms that have lost business, and general coronavirus disruption. A good time to buy a used car should be, well, right about the time you’re reading this, say market trackers at CarGurus, KBB and others, as that wholesale-price plunge works its way down to retail sales. Prices won’t come down uniformly, and they will vary by market. But come down they should.

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Finding the deals. A startup called CoPilot has a car-buying app that includes a feature called PricePulse, which forecasts prices. We asked CoPilot for vehicles that it predicts will see sharp price drops.

Sedans and luxury brands are among the categories with the greatest price weakness, so it makes sense that the Cadillac CT6, which checks both boxes, is a contender for hottest deal. Per CoPilot’s data, listings for the 2020 CT6, one of the last of the big American sedans, were hovering around $59,000 in mid May. That was $10,000—or about 15%—below the price at the beginning of March. But prices have farther to fall: CoPilot forecasts another $5,000 drop, on average, by early July.

Five-figure discounts are pretty astonishing, though keen car watchers would note that the CT6 has been discontinued by General Motors and was never that popular to begin with. But there are deals to be had even on popular, commodity-like vehicles such as the Toyota Camry. In mid May, the average listing price of a 2017 model of this American-built sedan was $16,700, down 3% from where it had been in March. But more savings lie ahead, says CoPilot, which forecasts another 9% drop by July 1. That would mean (again, on average) paying $2,000 less than in March.

If you’ve had your eye on a luxury SUV, this is another segment where deals are in the offing. Take the Land Rover Range Rover, a vehicle which for decades has been the prestige standard (and the styling inspiration for the Ford Explorer and others down the pecking order). Models from 2017 were listing for less than $65,000 in mid May, a $4,000 (6%) drop from March, and prices were headed further south, to an estimated $55,000, per CoPilot.

More-plebian SUVs should still see declines. The 2017 Honda CR-V and Ford Escape charted an un­exceptional 3% decline between March and May (not much ahead of depreciation), but CoPilot forecasts further 9% declines for both by July. Since both of these vehicles are far cheaper than the Range Rover, the dollar value of the savings is less eye-popping, but $1,500 to $2,000 is nothing to sniff at.

If you’d like to play around with prices for other models, download CoPilot or check it out online at www.copilotsearch.com. Notably, this tiny Chicago-based company says it doesn’t sell customer leads to car dealers.

Giving Back

Giving to charity isn’t a “deal” in the traditional sense, unless you really need a calendar or a tote bag. But this year, Congress has given you more incentive to donate. The CARES Act will allow taxpayers who take the standard deduction to claim a $300 above-the-line deduction on their 2020 income tax return. (Usually, only taxpayers who itemize deductions can claim a break for charitable donations.) Donations to donor-advised funds and certain organizations that support charities aren’t eligible for this deduction.

If you would like to contribute to a coronavirus-related charity, Charity Navigator has a list of charities that support first responders, educational efforts and community services in areas that have been hard-hit by the pandemic. Find it at www.charitynavigator.org.

Sandra Block, Daniel Bortz, Ryan Ermey, Lisa Gerstner, Nellie S. Huang, David Muhlbaum and Andrea Browne Taylor contributed to this article.

See Also: Donate to Charity and Cut Your Tax Bill

Banks are pulling back on their risk exposure by cutting credit card limits or canceling cards altogether, says Ted Rossman, industry analyst at CreditCards.com. As a benchmark, consider that during the Great Recession, the October 2008 Fed Senior Loan Officer Survey found 20% of card companies cut credit lines for customers with good credit scores and 60% reduced lines for subprime cardholders.

Unused cards are prime candidates for cancellation, so if you haven’t made a purchase on a card in a while, buy something small and pay it off right away, says Rossman. Keeping cards open helps your credit score because it aids your credit utilization ratio — the credit you’re using divided by your credit limit. Your credit limit could be cut or your card canceled if you get close to your credit limit. If you’re having trouble making payments, let your card issuer know. It will probably work with you on a payment plan (see Milliennials Face Their Second Recession).

During the Great Recession, banks also froze home-equity lines of credit as home prices plummeted. So far, home prices haven’t shown signs of distress, but Wells Fargo and Chase are among large banks pausing HELOC applications.

Do you worry about cell phone mishaps? Before you shell out for insurance, see whether your credit card comes with coverage as a free benefit. Last year, Mastercard began offering cell phone protection for holders of its World and World Elite credit cards. Consumer credit cards from Wells Fargo come with phone insurance, and so do the Chase Ink Business Preferred Visa, Uber Visa and U.S. Bank Visa Platinum cards.

To get the insurance, you have to pay your monthly wireless bill with the credit card (check with the issuer to see whether all phones on a family plan are covered). The coverage limit per claim is often $600, although Mastercard World Elite cardholders get up to $800 a claim. Yearly coverage limits apply, too, typically ranging from about $1,000 to $1,800. And the number of claims may be capped at two or three annually. Deductibles run from about $25 to $100.

The insurance usually covers devices that are damaged or stolen (but not lost). The type of damage that qualifies varies. Mastercard’s pro­tection, for example, includes screen scratches that don’t affect your phone’s ability to make or take calls; some other plans exclude cosmetic damage. Other exclusions may include phones paired with a prepaid wireless plan, devices stolen from checked baggage during air travel and electronic problems not caused by physical damage, such as inability to charge the battery. If your phone is stolen, you may have to provide the benefit administrator a police report that was filed within 48 hours of the in­cident, and damage claims may require a repair estimate. And you’ll typically have to file your claim within a specified window after the damage or theft occurred—often 90 days.

If you buy insurance through your phone carrier, you may enjoy higher coverage limits of about $2,000 per claim and inclusion of lost phones in the plan, says Tina Chang, of WhistleOut, a phone-plan comparison site. But the cost may be about $10 to $20 per month in premiums.

If you have a credit card from Chase or Citi, you may be able to borrow against the unused portion of your credit line in the form of a loan. Both issuers are touting the loans to select customers as a quick and easy way to get cash—say, for an unexpected expense or home project.

The primary appeal is convenience. You don’t have to apply for a separate loan or undergo a credit check, and loan payments are rolled in with your regular payment so that you have one bill each month. With the Citi Flex Loan, you can spread out payments for a term of up to 60 months. My Chase Loan, which Chase plans to launch late this year, will have a term of up to 24 months.

For both plans, the interest rate is fixed. Most credit cards have a variable rate, so taking the loan provides more predictability for a big purchase than charging it to your card. But variable card rates will fall further if the Federal Reserve continues to lower the federal funds rate; following September’s decrease of one-fourth of a percentage point, Kiplinger expects another quarter-point cut in late October.

Shop around. The issuer will likely offer you a loan rate that’s lower than your card rate (recent average card rate: 17.14%), but you may find an even better deal elsewhere. (Neither issuer was willing to provide a range of rates charged for the loans, but several Citi cardholders we spoke with said they had received offers ranging from 9.99% to 16.99%.)

If you switch to a card that offers a 0% rate for the first several months you have the account, you’ll fare better as long as you pay off the balance before the no-interest window closes. The Wells Fargo Platinum Visa and U.S. Bank Visa Platinum cards both recently charged zero interest on purchases for the first 18 months.

If you prefer a personal loan, review offers from lenders at lendingtree.com and supermoney.com. Lightstream, a division of SunTrust Bank, recently offered rates as low as 3.99% on personal loans. As you compare loans, check for origination fees and prepayment penalties.

The term “shadow banking” often elicits thoughts of shady back-alley dealings and loan sharks waiting to take drastic measures against debtors who can't pay. While that makes for an interesting story, it couldn’t be further from the truth.

Most consumers may not pay much attention to shadow banking because they don’t feel like it affects them personally. The problem is that the industry has grown so large that many people have loans originated through shadow banking, and they don’t even realize it.

Quicken Loans surpassed Wells Fargo recently to become the largest mortgage lender in the country, according to a 2018 press release. Quicken has approximately 17,000 employees and closed nearly a half-trillion dollars of mortgage loans from 2013 through 2018. The most interesting fact of all? Quicken isn’t a bank. It’s a prime example of the vastness that shadow banking represents in the economy.

What Is Shadow Banking?

Like many complex parts of our economy, shadow banking is often misunderstood. However, it is important to know what shadow banking really is, how it supports the economy and the risks it poses. According to the latest Financial Stability Board report, non-bank financing provides an alternative to traditional bank loans and is a major contributor to overall economic activity and growth. However, the benefit of that growth also comes with major risks to the economy.

When most people think of banks, they think of traditional commercial banks like Wells Fargo, Bank of America, Citibank and others. What makes these institutions true banks is the fact that they take deposits from savers and lend them out to borrowers in the form of mortgages, car loans and other debt. These traditional commercial banks are heavily regulated by federal and state authorities and must abide by Federal Reserve bank restrictions.

Shadow banking, on the other hand, refers to any type of lending provided by financial institutions that are not commercial banks and not regulated as banks. Like traditional banks, shadow banks rely on short-term funds to make longer-term loans. That’s where the similarities end. Since shadow banks are not depository institutions, they do not have deposits to lend out to borrowers. Instead, they rely on money from investors for making loans.

The difference? Unlike deposits that are FDIC insured, investor dollars collected through the shadow banking industry are not insured. It seems simple and straightforward, but that simple difference alone creates a major risk for investors and for the entire financial system.

Risk No. 1 – Investor Safety

Bank deposit accounts and money market accounts are insured by the FDIC and pose very little risk to account holders. Money market funds and other short-term, non-bank savings vehicles — the funding source for many shadow bank lending operations — are not insured. There’s really nothing wrong with providing investors with a decent short-term return in exchange for using their funds to make longer-term loans at higher rates, and conceptually, if investors understand these risks, then there should not be a problem. That’s how commercial banks have operated for centuries.

The difference lies in what happens when things go wrong. During the 2008 financial crisis, commercial banks were able to borrow money from the Federal Reserve to help weather the storm and provide account holders with access to their deposits. Shadow banking institutions cannot do that. They do not have access to short-term, government-backed funding and instead are forced to sell assets to raise cash and return money to investors. When asset prices are falling, as they were in 2008 and 2009, institutions are forced to sell assets at depressed prices just to be able to return money to investors, and it creates a downward spiral. This could make the next recession worse as dropping assets are sold at lower and lower prices to pay off investors.

That leads to much broader problems and bigger shocks to the overall economy and financial system.

Risk No. 2 – Liquidity

Just as an engine needs gasoline to run, the financial system needs access to short-term capital in order to operate. Banks and nearly every other monetary institution rely on access to short-term funds to meet liquidity needs and financial obligations. Real banks can access short-term funding in many ways that shadow banks cannot. When there is no short-term funding available, institutions that rely on it will suffer and possibly even fail in a short period of time. This is the reason the 2008 financial crises became so dangerous so quickly.

Since 2011, the Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, has been monitoring the shadow banking system worldwide. Their latest report showed that shadow banking assets increased 7.6% to $45 trillion in 2016, growing faster than the rate of banks and insurance companies worldwide. To put things in perspective, shadow banking is now larger than the world economy in terms of total GDP, according to the report.

The good news is that shadow banking has been a major contributor to economic expansion since the 2008 financial crisis. The bad news is that there is always a balance between risk and reward. When the reward seems too great, the risk probably is too.

Risk No. 3 – Recession

It’s very difficult to predict a recession ahead of time, and the real causes often only become clear well after the fact. Looking back to the 2008 financial crisis, there were a lot of factors at play. Regardless of the specific cause or causes, there is no doubt that shadow banking played a major role in the severity of the crisis. A late 2018 Bloomberg article on shadow banking summarizes the role it played and points out that the most devastating liquidity problems were not due to a “run” on traditional banks as in the Great Depression. Rather, they were a result of problems caused by non-bank institutions like Lehman Brothers and Bear Stearns. With any portion of the economy being so dependent on an industry as large as shadow banking, there are bound to be risks involved.

The real question is whether post-2008 regulations and scrutiny of the shadow banking world will be enough to avert or minimize another similar crisis in the future.

In the meantime, it’s hard to decide whether to be thankful that we have shadow banking institutions to support the growth of the economy or to be fearful of what the future may hold as a result of that unchecked growth.

What Does All This Mean for Borrowers and Investors?

If you’re an investor who's in or near retirement, the main thing to take away from this is to make sure you don’t have more risk than you’re comfortable with at this age and stage of your life. If during the last crash you saw your 401(k) turn into a 201(k), now that we’re 11 years into this current bull market (the longest bull market in history) don’t let your guard down by having more risk than you’re comfortable with.

Don’t be lulled into a sense of complacency believing that stocks are “safe” just because they’ve been going up for almost 11 years straight. Remember that stocks are designed for potential growth and non-guaranteed dividends, they are not designed for safety of your principal. And don’t let the next recession, whenever it comes, catch you by surprise. Since World War II, the U.S. has had a recession on average every five years, and it’s been 11 years since our last recession, so make sure you have a well-diversified portfolio that has the right amount of risk for you.

People often ask me how much in stocks they should have in their portfolio, and I always say that if you’re a retiree who doesn’t have a high appetite for risk then you shouldn’t have more than 45% of your retirement portfolio in stocks. The other 55% should be in safer assets, such as bonds, preferred stocks, CDs, structured notes and guaranteed, fixed annuities (NOT variable annuities) from A+ rated household-name insurance companies. A truly diversified portfolio is one of the most important rules of retirement.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Stuart Estate Planning Wealth Advisors are not affiliated companies. Stuart Estate Planning Wealth Advisors is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products. Neither the firm nor its representatives may give tax or legal advice. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Any media logos and/or trademarks contained herein are the property of their respective owners, and no endorsement by those owners of Craig Kirsner or Stuart Estate Planning Wealth Advisors is stated or implied. #168554

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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.

There’s some good news for high-net-worth parents of Gen Z (ages 16 to 21) and young Millennial (ages 22 to 25) children. According to a recent Wells Fargo study of children in families with an estimated net worth of at least $1 million, these children say the most important thing they will inherit from their parents isn’t their wealth but their values.

The news gets event better. These same children say they want to carry on their families’ legacies too, which indicates that the children are seeing their families’ wealth as more than just something that can just make life easier for them.

Hearing Directly from the Children

This study was unique because it was one of the first where we are hearing directly from the children and not from the parents or grandparents about what they think the children’s priorities or perceptions are. When the children had the opportunity to share their perspectives, they were quite brave about what they revealed. They had some encouraging things to say and made it clear they could use some help, too.

• More than four out of five (84%) say they want to sustain and build on their family's legacy.
• The survey found that four in 10 children want to have more say in their family's philanthropic strategies.
• The next generation is confident and wants to take on the responsibility of stewardship regarding the family’s wealth and legacy, yet realize they need help with gaining the financial acumen and preparation to do so.
• Few children indicate their families meet to discuss finances, yet more than half think it would be a good idea.

This data can be distilled in to three main themes, which any family, not just wealthy families, can address with their children about money: communication, values and preparation.

Communication

Most everyone has good intentions when it comes to their families. However, some need help with interacting on topics related to wealth because those discussions can be scary. Many of us are taught that to talk about money is taboo, or parents are afraid that sharing facts and figures with their children might make their children lazy or entitled. It is vital, however, to talk with your children about money and your family’s money culture, and not just once but regularly.

Family meetings, mission statements and understanding children's desires and concerns can be helpful in making those conversations easier, and you might be surprised at how well the children respond to being brought into the inner circle. One way to start that conversation could be to establish some basic ground rules for the meeting — like no sarcasm, no interrupting, all ideas welcome — to make the space feel safe to start these conversations.

Philanthropy

Philanthropy can also be a tool to help navigate discussions about wealth, values and priorities. The survey shows that two out of three families now give together as a family. But children want to take an even more active role in shaping how much their family gives and to what causes. Having discussions about what might interest the children, what challenges they see in the world and ideas for how to solve them can be a great start for discussions about philanthropy.

You can give your children a set amount of money to donate to a charity they choose, but before they make the donation, ask them to answer some basic questions about how they want their donation to make an impact, why they are choosing that charity, etc., and ask them to share that with you at a family meeting.

Financial Literacy

Even though a majority of respondents (65%) say they are confident they can manage family wealth, the children of millionaires give themselves mediocre grades (B- average) on their overall financial literacy. This reveals an opportunity to help the children learn more about basic financial literacy, protecting themselves and stewarding the family assets.

Business leaders spend a lot of time and energy on building a pipeline of up-and-coming leaders, training, educating and mentoring them to eventually lead the business. Enterprising families can apply these same principles to prepare the next generation to step in to the role of wealth stewards too.

It is vital to establish solid and open communication, create a shared purpose and educate our children so that they are prepared for stewardship. When families work together, communicate clearly and maintain a shared purpose, the financial and emotional wealth created is much more stable and enduring.

Survey Details — On behalf of Wells Fargo Private Bank, Versta Research conducted a national survey of 1,000 Gen Z (ages 16-21) and young Millennials (ages 22-26) whose parents have an estimated net worth of at least $1 million, and the questions related to their thoughts on money and values, conversations with parents, expectations around wealth, future plans, financial acumen, etc.

Wells Fargo Private Bank provide products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. Wells Fargo Bank, N.A. is the banking affiliate of Wells Fargo & Company.

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.

Bank earnings season kicked off Friday, April 12, with first-quarter reports from JPMorgan Chase (JPM) and Wells Fargo (WFC). As more reports roll in, investors will be keen to see what a pause in interest-rate hikes and a potential slowdown in economic growth could mean for the sector going forward.

After all, those and other concerns have made financial stocks a market laggard so far this year. The Standard & Poor’s 500-stock index is up a hot 15% for the year through April 10. The financial sector, however, gained just 11% over the same span. The bank subsector was up a bit more than 12%.

But the financial sector might be ready to pivot. Analysts surveyed by Refinitiv expect the sector to post year-over-year Q1 earnings growth of just 2.9%. That doesn’t sound like much, but it’s encouraging when you consider that FactSet estimates the S&P 500’s profits will contract by 4.2% for the quarter.

Which bank stocks are analysts most excited about right now? We screened the Russell 1000 Index for the top-rated small, midsize and large bank stocks. S&P Global Market Intelligence surveys analysts’ ratings on stocks and scores them on a five-point scale, where 1.0 equals “Strong Buy” and 5.0 means “Strong Sell.” Any score of 2.0 or lower means that analysts, on average, rate the stock a “Buy.” The closer the score gets to 1.0, the better.

Here are the 12 best-rated bank stocks as earnings season gets into gear. This group is broken down into the four most-loved stock picks in the small-, mid- and large-cap spaces.

Data is as of April 10, 2019. Companies are listed by strength of analysts’ buy recommendations, from lowest to highest. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ ratings are provided by S&P Global Market Intelligence. Expected earnings dates are provided by Briefing.com.

• Market value: $5.1 billion
• Dividend yield: 2.3%
• Analysts’ average recommendation: 1.44

Analysts believe Popular (BPOP, $53.05) is poised for steady-if-not-spectacular growth. The regional bank serving Puerto Rico, New York, New Jersey and Florida is expected to deliver average earnings growth of 5% a year for the next half-decade.

Add in the healthy dividend yield, and you have a stock that Wall Street equity researchers are firmly behind. Analysts at Sandler O’Neill & Partners – which specializes in financial-sector analysis – rate BPOP stock at “Buy.” They say the bank’s “capital position remains extremely robust” and that “BPOP is set up for a very nice 2019.”

Popular’s stock is up about 12% for the year-to-date, lagging the S&P 500 by 3 percentage points. The next potential catalyst is its Q1 earnings report, which is expected to come out ahead of the April 18 market open.

• Market value: $4.2 billion
• Dividend yield: 1.4%
• Analysts’ average recommendation: 1.5

Regional financial stock Sterling Bancorp (STL, $19.88) is having a hot year. Shares are up more than 20% so far in 2019, and analysts think there’s more outperformance to come.

With an average recommendation score of 1.5, the Street leans heavily toward “Strong Buy” and “Buy” calls. Sandler O’Neill analysts base their own “Buy” call partly on the stock’s “compelling valuation.” They also laud the company’s ability to keep a cap on costs: “Expense control has been excellent.”

The regional bank with locations primarily in the greater New York area is expected to deliver annual average earnings growth of 5% for the next five years. Sterling’s next quarterly update should come after the April 24 market close.

• Market value: $4.3 billion
• Dividend yield: 1.2%
• Analysts’ average recommendation: 1.5

Shares in Pinnacle Financial Partners (PNFP, $55.86) are on a tear so far in 2019. PNFP is up more than 21% for the year-to-date, easily outpacing the broader market. Analysts believe the regional bank – which serves Tennessee, North Carolina, South Carolina and Virginia – is set to deliver outsize earnings growth.

Sandler O’Neill analysts, who rate the stock at “Buy,” note that “new revenue producers will continue to fuel future growth.”

The analyst consensus is for earnings to increase at an average annual pace of 32% for the next five years, according to Refinitiv data. No wonder Wall Street’s pros are so bullish on this bank stock, which is set to report its quarterly results after the April 15 close.

• Market value: $4.5 billion
• Dividend yield: N/A
• Analysts’ average recommendation: 1.29

Shares in Western Alliance Bancorporation (WAL, $43.32) – a regional bank with branches in California, Arizona and Nevada – tumbled in March after the Federal Reserve indicated that it wouldn’t raise interest rates again in 2019. Low rates put pressure on banks’ net interest margins, or the difference between what a lender pays for deposits and charges for loans. Thus, WAL was hardly alone in reacting negatively.

Analysts as a group remain bullish on Western Alliance’s stock, however, which has rallied sharply in recent weeks. Indeed, WAL is up 11% since bottoming on March 22. Standard & Poor’s 500-stock index has gained 3% over the same time frame.

The regional bank is forecast to generate average annual earnings growth of 7.5% over the next five years, according to data from Refinitiv. Its quarterly results are expected to come after the April 22 closing bell.

• Market value: $14 billion
• Dividend yield: 4.2%
• Analysts’ average recommendation: 2.39
• Huntington Bancshares (HBAN, $13.30) – a regional bank based in Columbus, Ohio, with branches mainly concentrated in the Midwest – offers a generous dividend yield and high forecast dividend growth.

Concerns about stagnant interest rates and slower economic growth have some analysts leaning toward being more cautious on the stock. Their average recommendation of 2.39 sits between the “Buy” and “Hold” camps.

Analysts expect HBAN to generate average earnings growth of 8% a year for the next five years, according to a survey by Refinitiv. That should help fund a dividend that has doubled from 7 cents per share quarterly to 14 cents since late 2015.

Huntington’s next earnings report is due out ahead of the April 25 market open.

• Market value: $16.4 billion
• Dividend yield: 4.2%
• Analysts’ average recommendation: 2.0

With more than 1,100 branches across 15 states and about $130 billion in assets, Cleveland-based KeyCorp (KEY, $16.39) is one of the largest regional banks in the nation. A hefty dividend yield north of 4% and solid growth prospects have analysts convinced that solid returns still lie ahead.

Zacks Equity Research notes that KeyCorp has been driving growth through acquisitions. Since 2016, the bank has bought out First Niagara Financial Group, HelloWallet and Cain Brothers & Company. Most recently, it closed on its acquisition of Laurel Road Bank’s digital lending business in early April.

Analysts forecast the bank to generate average annual earnings growth of 6.7% for the next five years. Add in the dividend yield of more than 4% and KEY gets an average analyst recommendation of “Buy.”

KeyCorp is expected to report earnings on the morning of April 18.

• Market value: $12.4 billion
• Dividend yield: N/A
• Analysts’ average recommendation: 1.67
• SVB Financial Group (SIVB, $237.27) is a different kind of animal.

SVB, which stands for Silicon Valley Bank, is a go-to bank for tech-sector startups. In addition to commercial banking, the firm offers services ranging from venture capital and private equity to private banking and wealth management.

Sandler O’Neill analysts have a “Buy” rating on this bank stock partly because of its “unique franchise.” The analysts also like SIVB’s “above-average growth and superior deposit base.”

SIVB is up 25% for the year-to-date, which beats the S&P 500 by about 10 percentage points. Despite the run-up in price, analysts have kept their bullish stance. Their average recommendation of 1.67 sits easily on the “Buy” side of the scale. We’ll see if that continues following its next earnings report, due out after the market closes on April 25.

• Market value: $15.7 billion
• Dividend yield: 3.8%
• Analysts’ average recommendation: 1.62

Outsize long-term earnings growth and a generous dividend yield have analysts plenty bullish on Citizens Financial Group (CFG, $34.11), the 13th-largest bank in the U.S.

The regional financial company best known for Citizens Bank branches throughout New England, the Mid-Atlantic and Midwest is forecast to generate average annual earnings growth of almost 13% for the next five years, according to data from Refinitiv. The top line is expected to be a bit more modest, but there’s still upside, with analysts projecting 6.6% revenue growth this year, then 4.2% in 2020.

Analysts’ average price target of $41.20 gives CFG and implied upside of more than 20% over the next 12 months or so, according to Refinitiv. Citizens’ Q1 report is due out ahead of the April 18 open.

• Market value: $27.3 billion
• Dividend yield: 3.3%
• Analysts’ average recommendation: 2.33

SunTrust (STI, $61.56) still has its fans in the analyst community, but stock evaluators have gone into wait-and-see mode pending the finalization of a merger with BB&T (BBT). The $28 billion deal was announced in February and is expected to close before the end of this year.

UBS, for example, downgraded STI to “Neutral” (equivalent of “Hold”) in early March. “Our prior thesis no longer holds; investment case tied to whether BB&T merger creates value,” analysts wrote in a note to clients.

The majority of Wall Street’s pros are on the fence. Of the 27 analysts tracked by S&P Global Market Intelligence, 17 say SunTrust is a “Hold.” Eight call it a “Strong Buy,” while two have it at “Buy.”

• Market value: $36.8 billion
• Dividend yield: 3.4%
• Analysts’ average recommendation: 2.29

With nearly 1,900 branches and almost $220 billion in assets, BB&T (BBT, $48.11) was already one of the nation’s largest regional banks. Once it completes its merger with SunTrust, the combined firm will become the nation’s sixth biggest bank by assets.

However, analysts on average are merely upbeat, but not uber-enthused, about BB&T’s prospects.

Sandler O’Neill, for instance, applauds the SunTrust merger. But it also thinks investors should wait for a better entry point on BBT stock. The analysis outfit has a “Hold” rating on the shares, which is not an uncommon view. Fifteen of the 24 analysts tracked by S&P Global Market Intelligence fall in the middle. Only eight call BBT a “Strong Buy,” and one other analyst says “Buy.”

The large regional bank will report its latest financial results before the April 18 open.

• Market value: $280.2 billion
• Dividend yield: 2.1%
• Analysts’ average recommendation: 2.10

Shares in Bank of America (BAC, $29.07), the nation’s second largest bank by assets, are up a market-beating 18% so far in 2019.

With an average recommendation of 2.10, analysts are mostly bullish on the mega-cap financial stock, but there are a significant number of “Hold” calls. Of the 30 analysts surveyed by S&P Global Market Intelligence, 10 say BAC is a “Strong Buy” and seven have it at “Buy.” The remaining 13 analysts call it a “Hold.” That includes HSBC’s Alevizos Alevizakos, who started BofA at “Hold” on concerns such as margin contraction and declining loan growth.

Still, analysts forecast BAC to generate average annual earnings growth of 21% for the next five years. Their average target price of $33.17 gives the stock implied upside of 14% in the next 12 months or so.

Bank of America’s results should come before the April 16 opening bell.

• Market value: $153.4 billion
• Dividend yield: 2.8%
• Analysts’ average recommendation: 1.79

Analysts as a group aren’t as jubilant about large bank stocks as they are about the sector’s midsize and smaller companies. But Citigroup (C, $65.52), the nation’s fourth largest bank by assets, has a cleanly bullish camp. With an average recommendation of 1.79, analysts are split on whether the massive money center bank is a “Strong Buy” or a “Buy.”

As well they should be. With an average price target of $77.64, according to Refinitiv, shares in Citigroup have implied upside of more than 18% in the next 12 months or so.

UBS analysts, who rate Citigroup stock at “Buy,” say “a low bar could set (the) stage for near-term outperformance.” Shares in the bank are up 26% year-to-date already.

Wall Street expects average annual earnings growth of nearly 17% over the next five years. For the quarter to be reported ahead of the April 15 opening bell, expectations for profit growth are a bit more subdued at 7.1%, but still better than the sector average.

If you lost your job, faced a health crisis that prevented you from working, or had to pony up a large, emergency expense, would you be able to cover your expenses? Even if you have a well-stocked emergency fund, you may need to find extra money or trim expenses. And it’s always a good idea to contact your mortgage lender and credit card issuers to seek temporary payment relief. These suggestions will help you weather a financial crisis until you get back on your feet.

Call Your Creditors

If you’re facing a financial crisis, your mortgage lender, bank and credit card issuer may let you pause or lower your payments. Wells Fargo and Bank of America offer forbearance plans that allow customers facing a temporary financial hardship, such as a layoff, to suspend or reduce their mortgage payment. American Express and Discover offer payment-assistance programs tailored to individual situations that could temporarily lower the interest rate, waive late-payment fees or lower the monthly payment on credit cards. During the government shutdown, JPMorgan Chase contacted furloughed customers to offer help and automatically refunded overdraft and service fees on checking accounts. The company also launched a “special care” hotline for furloughed customers, where they could receive 90-day mortgage-payment relief and suspension of credit-card payments.

If you know you’ll be late or miss a payment on your student loans, contact the servicer. You may be able to stop or reduce federal student loan payments temporarily if you’re unemployed or experiencing an economic hardship. Deferment allows you to stop monthly payments, usually for a year at a time, for a total of up to three years (the feds will pay the interest on some loans but not other loans). Forbearance pauses payments in year-long increments. Interest accrues on all the loans, including subsidized Stafford loans. Many private lenders offer short-term relief in the form of interest-only payments, and some offer forbearance.

Cash in on Skills and Assets

When life throws you curveballs, get creative to keep the game going. The empty guestroom or finished basement in your house is rentable lodging on Airbnb (see Tips for Renting Out Your Home on Airbnb for more information). Driving for ridesharing platforms such as Uber or Lyft can help with cash flow in a pinch, but remember to check your auto insurance’s policy on such gigs to make sure you’re fully covered in case of an accident. Also consider freelance and consulting work that uses your skills and experience. Marguerita Cheng, a certified financial planner in Gaithersburg, Md., says one of her clients parlayed his public relations and communication skills into winning two long-term contracts to help local nonprofits with their marketing efforts. And don’t forget to browse the classified ads and retailers looking for part-time workers.

Apply for Social Security

You’re eligible to file for Social Security as early as age 62. But if you do, your benefits will be permanently reduced by 25% compared with claiming at full retirement age—66 for most baby boomers. It’s usually best to wait until then so you’ll receive 100% of the benefits you’ve earned. If you continue to postpone filing for benefits after you reach full retirement age, your payouts will grow by 8% a year until you reach age 70.

But delaying benefits may not be an option of you’re forced into early retirement because of layoffs or health problems. Claiming benefits early beats going into debt or losing your home.

If you’re married, consider having the lower-earning spouse file for benefits at age 62. That spouse will see a 25% reduction in benefits, but you can use the money to pay expenses while the higher-earning spouse’s benefits continue to grow. To get an estimate of how much you’ll receive in benefits, go to www.ssa.gov/benefits/retirement/estimator.html.

Protect College Savings

As your child ages, ratchet down the risk in your 529 college-savings plan. If the stock market stumbles shortly before the tuition bills are due, it will leave you scrambling. By the time your child is in high school, most accounts should have a roughly even split between stocks and bonds or cash. Or opt for an age-based portfolio, which automatically shifts the investments as the student approaches college.

Boost Financial Aid

Have a son or daughter in college? The Free Application for Federal Student Aid now uses older tax data, so your family’s financial situation may have changed since the information was reported. If you’ve stopped working or had a financial calamity since the tax year used in the form (2016 for the 2018–19 academic year), contact the financial aid office at your child’s school to explain what has changed and ask about their appeals process.

Families having trouble covering expenses during the semester should contact the financial aid office, too. A growing group of colleges offer small emergency grants and loans, usually about $500 to $1,500, to help students fill the gap during an emergency, or to pay for books, groceries or other basics during the semester.

Tap These as a Last Resort

If you don’t have an emergency fund—or you’ve had to deplete it—you have a few other options.

Home-equity line of credit. Using a home-equity line of credit is a quick, hassle-free way to raise cash. But remember that your home is on the line if you default on the loan. The average rate for a $30,000 HELOC was recently 6.8%, according to Bankrate.com.

401(k) loan. You can generally borrow up to 50% of your 401(k) balance, up to $50,000, for any reason without taxes or penalty, and you have five years to repay the loan (or longer if you borrow to buy a primary residence). The good news is that you borrow your own money and pay the interest back into your account. Most 401(k) plans charge the prime rate plus one percentage point. You’ll minimize the impact on your retirement savings if you continue to contribute to your 401(k) while repaying your loan, assuming your employer allows it. The new tax law extended the time you have to pay back a 401(k) loan after you leave your job: You now have until the due date of your tax return for the year you leave your job to repay the loan and avoid taxes and a 10% early-withdrawal penalty if you left your job before age 55.

Roth contributions. You can withdraw contributions to your Roth IRA at any time without penalty or taxes—but by raiding your retirement savings, you do lose the ability for that money to grow tax-free for the future.

Cash value from life insurance. If you have a permanent life insurance policy, you can access a portion of your cash value through a withdrawal or policy loan. You have to pay interest on a policy loan, but there is no repayment schedule. If you die with a loan outstanding, the amount is subtracted from the death benefit but is not taxable. If the policy lapses while you’re alive, however, the loan becomes a withdrawal, and any money you received beyond the premiums you paid is taxable.

HSA withdrawals. If you have a health savings account in conjunction with a high-deductible health insurance policy, you can make tax-deductible contributions and withdraw the money tax-free for qualified medical expenses. But if you have used other cash to cover your current medical expenses, you can save the money you contribute to the HSA and use it like a backup emergency fund, as long as you match withdrawals with eligible medical expenses you incurred since you opened the account, even if it was years ago. Keep a stash of receipts for expenses you paid for eligible medical expenses in your records.

Bank stocks and other financial equities are back in the spotlight again with the dawn of another earnings season. And any wind in their sails is sure to be felt by bank ETFs.

The financial sector helps kick off each quarter’s run of earnings reports, starting with majors such as JPMorgan Chase (JPM) and Citigroup (C), then followed by regional banks, insurers and stock brokers. Robust economic activity means more business for banks – more mortgages, auto loans and business loans, as well as spending via personal credit – and that should show up in their quarterly reports.

Another bullish driver: The Federal Reserve has raised the fed funds rate three times in 2018 alone – which in turn is helping lift interest rates – to help keep America’s economy from heating up too much. That is a good problem to have, especially if you hold bank stocks and funds. Rising rates help banks by improving their net interest margin (the spread between what banks pay out in interest on deposits and what they earn in interest from mortgages and other loans). It’s no guarantee – higher rates can also dissuade consumers from taking out loans – but broadly, rising rates are viewed as bullish for banks and other financial stocks.

These seven bank ETFs provide varying ways to gain exposure to any continued growth in the financial sector.

Data is as of Oct. 11, 2018. Click on ticker-symbol links in each slide for current share prices and more. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

• Market value: $29.9 billion
• Dividend yield: 1.7%
• Expenses: 0.13%, or $13 annually on $10,000 invested

The Financial Select Sector SPDR Fund (XLF, $26.40) is far and away the largest financial ETF by assets under management, at $29.9 billion – more than triple the next-closest fund, the Vanguard Financials ETF (VFH). It also is a member of the Kip ETF 20, Kiplinger’s list of 20 high-quality exchange-traded funds.

It’s also one of the most diversified ways to invest in the financial sector, though that means XLF is not a pure play on American bank stocks.

Pure-play banks make up just 44% of this fund, with the lion’s share coming from the Big Four banks – JPMorgan, Citigroup, Bank of America (BAC) and Wells Fargo (WFC), and their combined 33% weight. But while JPMorgan is a massive overweight at 11% of assets, it’s not the biggest – that title goes to Warren Buffett’s Berkshire Hathaway (BRK.B, 12.8%), making up nearly all of XLF’s “Diversified Financial Services” allocation.

The rest of the fund is invested across capital markets and consumer finance companies, but also includes a 17% holding in insurers such as Chubb (CB) and MetLife (MET). Insurers obviously are a different business than traditional banks, but still benefit as rates rise by investing their money into higher-yielding bonds.

• Market value: $1.6 billion
• Dividend yield: 1.4%
• Expenses: 0.43%

The iShares U.S. Financial Services ETF (IYG, $126.20) has a slightly narrower mandate than the XLF. It targets commercial banks, asset managers and even credit card companies, but eschews other financial industries – most notably, insurance.

The Big Four play a similarly large role at nearly 35% of the fund, and pure-play banks make up more than half of all assets. But you also get access to the likes of Visa (V) and Mastercard (MA), which are obvious beneficiaries of a roaring economy, as Americans swipe, swipe, swipe their way through more purchases. Credit card companies also have growth appeal as Americans increasingly walk away from cash – a trend that is benefiting from increased adoption of online and mobile transactions.

IYG also invests in companies such as Goldman Sachs (GS) and Morgan Stanley (MS), which lend to corporate clients much like regular banks, but also provide services such as investment management, as well as equity and debt underwriting. That provides a little additional protection against bank-specific downturns.

• Market value: $849.2 million
• Dividend yield: 1.9%
• Expenses: 0.35%

If you are looking for more dedicated bank exposure, the PowerShares KBW Bank Portfolio (KBWB, $52.25) is more your speed. It is one of just a handful of ETFs that provide access specifically to American mega-banks and big regionals.

The KBWB holds just 24 stocks, including the “Big Four.” And as one would expect in such a concentrated portfolio, those larger companies make up a significant portion of the fund – about 33% of the fund’s assets.

However, KBWB’s modified market-cap weighting system ensures that larger regionals – which are a mere fraction of mega-banks’ size – still carry significant heft. For instance, Citigroup, which has a market capitalization of $177 billion, is the top weight at 8.4%, but North Carolina-headquartered BB&T Corp. (BBT) is a 4% weight despite its relatively modest $37 billion market cap. This helps reduce single-stock risk to a small degree.

• Market value: $4.7 billion
• Dividend yield: 1.7%
• Expenses: 0.35%

More growth-minded investors might want to think smaller about their bank-stock exposure.

Regional banks benefit from many of the same drivers as larger financials, such as rising interest rates helping to bolster net interest margin. However, there’s also potential in the form of mergers and acquisitions. The commercial banking space has been shrinking for more than a decade, from 7,870 banks in 2002 to 5,102 in 2016. The financial crisis of 2007-09 shook out some weaker hands, but the number of FDIC-insured commercial banks in the U.S. has been falling even as the industry has recovered. Some of that consolidation has come as larger regional banks swallow up smaller players.

That shines a positive light on funds such as the SPDR S&P Regional Banking ETF (KRE, $57.21), which holds more than 100 regional banks, mostly in the mid- and small-rap ranges.

This is a riskier area, naturally. Regional banks’ health can ebb and flow with the health of their respective regional economies. But you can mitigate some of that risk by holding a geographically diverse fund such as the KRE. This fund also tamps down risk with its equal-weighting methodology, which levels out all holdings upon each rebalancing, ensuring no single stock’s failure can deep-six the entire fund.

• Market value: $362.2 million
• Dividend yield: 1.3%
• Expenses: 0.6%

Investors who want to take the regional theme even farther – especially trying to exploit the potential for share-price spikes thanks to acquisitions – may consider the First Trust Nasdaq ABA Community Bank Index (QABA, $51.40), which invests in smaller regional and community banks.

This First Trust bank ETF holds roughly 170 stocks. To give you an idea about size, understand that the median market cap for the aforementioned SPDR S&P Regional Banking ETF sits at $5.3 billion, while the average QABA constituent is a mere $2.3 billion. And while just 28% of KRE’s portfolio is dedicated to small- and micro-cap stocks, more than 60% of QABA’s assets are invested in these smaller companies. That is largely because QABA’s benchmark index automatically excludes the 50 largest banks or thrifts (including holding companies) based on asset size.

QABA is market-cap weighted, but there are no serious overweights in the portfolio. East West Bancorp (EWBC) – the parent of independent commercial bank East West Bank, which operates out of California – is the top weight at 3.3%. And despite its focus on small caps, QABA boasts a smaller standard deviation (a volatility measure) than KBE and KRE over the past three years.

• Market value: $369.0 million
• Dividend yield: 1.7%
• Expenses: 0.4%

The Invesco S&P Equal Weight Financials ETF (RYF, $41.03) provides wide financial-sector exposure, but with a twist that conservative investors should like.

The RYF holds the same group of 67 securities as the aforementioned XLF; however, it equally weights the portfolio at every rebalancing, throwing market capitalization out the window. That’s how you get top holdings such as annuity and life insurance provider Brighthouse Financial (BHF), which is the smallest holding in the XLF. That doesn’t mean BHF is swelling its chest at anyone; the stock occupies a mere 1.64% of the fund, while the smallest top-10 holding, CBOE Global Markets (CBOE), makes up 1.55%. This is balance personified.

This weighting system greatly eliminates the risk of a sudden collapse in, say, Berkshire or JPMorgan, but it does skew the industry allocations significantly. Namely, insurance (33.6%) and capital markets (30.5%) are the biggest hitters in the fund. Banks are relegated to just more than a quarter of assets.

That makes the RYF a so-so way to express your bullishness on banks … but a strong way for the risk-averse to go long the American financial sector.

• Market value: $32.0 million
• Dividend yield: 1.2%
• Expenses: 0.6%

Finally, the Invesco DWA Financial Momentum ETF (PFI, $32.05) is a way to essentially double down on winners in the U.S. financial sector.

The PFI currently is made up of roughly 50 stocks from a financial-sector index that are selected for their high “relative strength,” or “momentum.” Invesco defines momentum as the “the tendency of an investment to exhibit persistence in its relative performance.” Another way of putting it is that PFI highly values stocks that have done well recently, believing that those stocks are the likeliest to continue performing well.

At each rebalancing, this ETF chooses at least 30 financial stocks with the highest momentum scores, though the number clearly varies. At the moment, this results in a 35% weighting in banks - not particularly heavy, but the biggest allocation, ahead of insurance (22%) and capital markets (21%). Top holdings include Mastercard, JPMorgan Chase and ratings agency Moody’s (MCO). While this strategy would seem to benefit the fund most during extremely bullish periods, PFI actually shines most when the chips are down. The ETF lost 27.2% in 2018 versus the XLF’s 55% in 2008, and just 4.6% in 2011 versus 17.2% for XLF.

The third-quarter earnings season is upon us. Alcoa (AA), which used to be the unofficial harbinger of the season, will post its Q3 results on Oct. 17 … but a handful of big-name large-cap stocks will have dropped their earnings reports before that.

Earnings reports are highly scrutinized, not just because investors are looking for information about how well individual companies are doing, but because the reports paint a picture for how well corporations as a whole are doing.

This season, investors are particularly on edge because many think the red-hot pace of profit growth seen over the past few quarters will be all but impossible to sustain.

Here’s a closer look at 12 large-cap stocks that are about to present what may be the 12 most important earnings reports to watch during the Q3 season. This news may well set the tone for the overall market, and make or break the usual year-end bullishness.

Data is as of Oct. 8, 2018. Earnings calendar data provided by MarketWatch and company data. Stocks listed in chronological order of report date.

• Market value: $257.4 billion
• Earnings Report Date: Oct. 12, before market open

Give credit to Wells Fargo (WFC, $53.67): The mega-bank is growing its bottom line again, and should rekindle top line growth next year. Both bumped into a headwind following the 2016 realization that bank employees had opened more than 2 million unauthorized bank accounts and credit card accounts, setting off a firestorm of regulatory and public relations nightmares.

Still, even two years out, consumers don’t appear to have fully forgiven or forgotten. Wells Fargo has fallen short of each of its past four quarterly earnings estimates, and the bar is set uncomfortably high headed into its third-quarter report. Analysts are calling for per-share earnings of $1.17, which actually would set a new record for the bank.

A reminder: Wells Fargo’s Q2 interest income was up, as would be expected in an environment where interest rates are rising. Non-interest income and fee-based income, however, fell year-over-year as consumers and companies continued to steer clear of the tainted company. Costs also increased as Wells continued to spend heavily not just on attracting new customers, but attracting and retaining personnel. It remains to be seen whether the bank can keep those and other costs tamped down according to plan.

• Market value: $299.2 billion
• Earnings Report Date: Oct. 15, before market open

Rising interest rates are a double-edged sword. On the one hand, they make lending a more profitable function for banks. On the other hand, they can discourage would-be borrowers from taking out loans in the first place.

It’s not entirely clear where the fine line is right now for the country’s banking industry. But Bank of America (BAC, $30.27) may give us a good idea of how far is too far when it reports Q3 numbers after the Oct. 15 bell.

BofA also is a good proxy of how most other banks are faring right now. But it’s not just lending revenue and net interest income that should be scrutinized. Bank of America also operates trading and capital-markets arms that may serve as a barometer for other financial stocks.

Analysts are collectively calling for earnings of 62 cents per share on $22.8 billion in revenue for the quarter ending in September. In the year-ago quarter, BofA generated 48 cents per share in profits on $22.1 billion in sales. Just note that in Q2 of this year, revenues were down slightly, and while earnings were up, that primarily was because of newly lowered tax rates.

• Market value: $154.2 billion
• Earnings Report Date: Oct. 16, after market close
• Netflix (NFLX, $349.10) is the leading name in streaming video, shaping and defining the industry as we know it. But it hasn’t been an especially profitable venture.

Buying or creating enough different video content to maintain an over-the-top television platform can be a very expensive undertaking. Even with a big chunk of this year’s $13 billion content budget already being deployed at the time, Netflix’s second-quarter net subscriber growth of 5.1 million fell more than a million people short of estimates.

Maybe it was just bad luck. Or perhaps it’s a clue that the streaming market is maturing and rivals are starting to figure out how to compete. The company’s second-quarter letter to shareholders explained, “HBO and Disney are evolving to focus on internet entertainment services. Amazon and Apple are investing in content as part of larger ecosystem subscriptions.” It added, “We anticipate more competition from the combined AT&T/Warner Media, from the combined Fox/Disney or Fox/Comcast as well as from international players.”

If improving competition is indeed taking shape, Q2’s subscriber-growth shortfall may well be the new norm. That’s a potential problem because Netflix has yet to reach enough scale to produce the kinds of profits that a company of its size should generate.

The Oct. 16 earnings release will reveal a great deal about Netflix’s true status and likely future.

• Market value: $22.9 billion
• Earnings Report Date: Oct. 23, after market close*

Kudos to Advanced Micro Devices (AMD, $26.46) for digging its way out of trouble. Just a few years ago, many investors concluded that AMD would remain a distant second (maybe even third) in the GPU and CPU races.

Those doubters were wrong. AMD has turned heads again, leveraging its new Ryzen processors and new Vega technologies for its GPU business. Its second-quarter profit was its biggest in seven years, with the company turning $1.76 billion in revenues (+53% YoY) into income of $116 million.

But the turn for the better raised the bar quite a bit for future reports. AMD must reliably continue to grow the top and bottom lines just to justify its $26.8 billion market cap. It’s not clear Advanced Micro Devices can do it, and there’s certainly little room for error.

MKM Partners analyst Ruben Roy voiced this concern just a few days ago. He writes, “We’d agree with AMD bulls that it’s done a much better job of executing on its product road map but executing on products and gaining market share are different things.” He adds, “With valuations reflecting the best possible scenario, we think there could be better opportunities coming up if there are hiccups.”

Analysts are collectively calling for 12 cents of per-share profits, up 20% from the year-ago figure, on a 3.7% bump in revenues to $1.7 billion.

* Estimated time of day.

• Market value: $88.8 billion
• Earnings Report Date: Oct. 23, before market open

The tariff war chatter has been circulating for months, but most of the tariffs have only been in place for a few weeks. Ergo, the political standoff wasn’t an issue for Caterpillar (CAT, $153.35) during its quarter that ended in June. Its third quarter ending in September, however, may be a different story.

Indeed, Caterpillar is a barometer of the impact of import tariffs for the entire industrial sector in many ways – though not necessarily all ways.

The company also cautioned in July that tariffs would reduce profits between $100 million and $200 million during the second half of 2018. That’s the bad news. The good news is, Caterpillar believes it can offset that added cost by raising prices and lowering its operating costs. So far, analysts agree. They expect Q3 revenues of $13.2 billion and per-share profits of $2.83, up from respective year-ago figures of $11.4 billion and $1.95, respectively.

That’s a risky game, however. Asia/Pacific customers, which buy about one-fifth of Caterpillar’s wares, are already suffering the intended fallout of a trade war. They may either be unwilling or unable to absorb the costs Caterpillar says it will be able to pass along.

• Market value: $219.6 billion
• Earnings Report Date: Oct. 24, before market open
• Boeing (BA, $385.77) shares have impressively climbed a wall of worry.

Between geopolitical tensions, new tariffs, competition from Airbus (EADSY) and an apparent saturation of the air travel market, Boeing was fighting an uphill battle. But BA shares just hit record highs and are up a whopping 170% over the past couple years, in step with rekindled revenue and earnings growth that few believed would materialize so well, and so soon.

What gives? First and foremost, demand for air travel may ebb and flow, but in a bigger-picture sense it’s not slowing down. The company anticipates that as infrastructure is built and costs continue to fall, global demand for air travel will grow at an annualized pace of 4.7% over the course of the next 20 years. Second, Boeing makes the fuel-efficient and appropriately sized aircraft that airlines want. The 737 offers the perfect mix of capacity and performance for most carriers.

But aircraft buyers can be a fickle bunch. While they all see a bright future for air travel, cancelled orders aren’t uncommon, even if only in response to short-term headwinds. Boeing had a great run over the past several quarters, but now we must see whether it can maintain altitude. The Oct. 24 report will shed some light on the matter.

• Market value: $216.4 billion
• Earnings Report Date: Oct. 25, after market close

While 2018 has been a fruitful year for Advanced Micro Devices (AMD) shareholders, it largely has been at the expense of Intel (INTC, $47.03) investors. To a certain degree, that makes sense. AMD has spent the last several years regrouping and designing some amazing and affordable computer processors, and Intel looks like it was caught unaware. Worse, Intel’s production pace allegedly is not keeping up with demand.

The preferred narrative can be deceptive, though. Investors love stories about companies that rise and fall, but all too often those rises and falls are exaggerated for the purpose of drawing a crowd.

Morningstar analyst Abhinav Davuluri isn’t taking the bait – yet. He noted in late September, “We concede AMD is likely to capture some market share at the lower end of the performance spectrum in the PC market over subsequent quarters and server space in 2019. However, we continue to foresee Intel dominating the high end of these markets.” He continued, “As Intel ramps up its 10-nm process throughout 2019, we don’t foresee material share loss as implied by the current share prices of AMD and Intel.”

Intel’s actual status with corporate and consumer customers will become much clearer on Oct. 25. Analysts expect $18.1 billion in sales and $1.15 per share in profits.

• Market value: $460.13
• Earnings Report Date: Oct. 30, after market close
• Facebook (FB, $157.25) shares plummeted 19% on July 15 in response to an alarmingly disappointing outlook that was dished out along with its Q2 results. That selling – made even more painful by the fact that FB shares were marching deep into record-high territory as of the day before – has been followed by even more exit orders.

The concern voiced by the company at the time wasn’t obscured or complicated. CFO David Wehner bluntly said, “We expect revenue growth rates to continue to decelerate in the second half,” adding “in addition, we’re continuing to focus our product development around putting privacy first, and that’s going to, we believe, have some impact on revenue growth.”

It’s ultimately the fallout from the Cambridge Analytica scandal that materialized last year, though a recent data-breach disclosure has added to Facebook’s woes. But the king of social networking may have been ready to run into a user-growth anyway. Facebook is more than 10 years old and has 2.2 billion regular users; most would-be members likely have signed up by now.

Facebook’s third-quarter numbers should clarify whether Wehner was sandbagging figure reports, or if he was legitimately sending a word of warning that shareholder expectations were too high. Like last time, though, the guidance and commentary may mean more than the numbers themselves.

• Market value: $1.1 trillion
• Earnings Report Date: Nov. 1, after market close

The world’s biggest and most profitable company probably is on every investor’s radar already. But even if Apple (AAPL, $223.77) weren’t at the top of the proverbial food chain, it still would be worth watching.

Of particular interest this time around will be a look at how well its flagship product, the iPhone, sold during the three-month stretch.

Smartphone saturation is a real thing, but the relatively recent unveilings of the iPhone 8 and the iPhone X have been met just as robustly as prior versions of the popular device have. Sales aren’t really growing, but they’re not shrinking either despite more and better competition. Its fiscal Q4 report slated for Thursday, Nov. 1, will speak volumes about how marketable its primary consumer technology still is.

Broadcom (AVGO) CEO Hock Tan recently implied, based on the number of components Apple ordered to manufacture iPhones, that the company’s fourth-quarter sales of iPhones would be roughly in line with the 46.7 million iPhones shipped in the same quarter a year earlier.

There’s more to Apple’s upcoming earnings report than iPhone sales, though. All eyes also will be on its Services revenue. That unit saw a 31% year-over-year improvement in sales for the company’s fiscal third quarter ending in June, validating the company’s bigger-picture plan to put more focus on sales of media and digital goods.

• Market value: $44.8 billion
• Earnings Report Date: Nov. 7, after market close*

To say Tesla (TSLA, $250.56) needs to serve up impressive numbers when it posts third-quarter earnings on Nov. 7 would be a considerable understatement. It may well be a now-or-never event for the company and Elon Musk in particular, who alluded to profitability a quarter earlier by saying, “Our goal is to be profitable and cash-flow positive for every quarter going forward.”

The irony: He gave the profitability pep-talk immediately after the electric vehicle manufacturer reported its biggest-ever quarterly loss. Tesla was $717 million in the red for Q2.

The dynamic has left many investors understandably confused. The company’s production issues seem to be easing up, with Tesla meeting production goals for Q3 – but now delivery logistics have gotten in the way. Meanwhile, they also know Musk has a penchant for bold talk and exaggeration. Exacerbating investors’ tensions is sheer uncertainty as to whether Musk will even be around a year from now, or even a month from now. The SEC just sued him, alleging he falsely told investors he had funding lined up to take the company private; Musk lost his post as chairman as part of a settlement.

Already seen by some as a liability, one more misstep like an ill-advised comment during the conference call could drive an even bigger management shakeup.

* Expected date and time of day

• Market value: $10.3 billion
• Earnings Report Date: Nov. 8, before market open*

The so-called retail apocalypse has destroyed more than a few retailers, and it has come close to ending Macy’s (M, $33.18) as we know it. The iconic company has managed to hold on, though, working to emerge stronger, leaner and wiser. Macy’s finally experienced revenue growth a couple quarters ago, and profits have improved in each of the past five quarters.

Analysts expect more such progress (albeit erratic) for the foreseeable future, and are looking for Q3 income of 14 cents per share on $5.4 billion in sales.

This – one year removed from relatively low expectations when most everyone feared the worst – is where it gets hard. If Macy’s wants to move forward, it has to play offense now, not just defense.

To that end, the Nov. 8 earnings report may be less about Macy’s third quarter and more about its plausible future. CEO Jeff Gennette conceded last month that the “recipe for success is healthy stores, a robust e-commerce business, and a powerful mobile app. Our customer wants a great experience anytime and anywhere she shops with us.” The question is, can Gannette and his management team convince investors he has a viable growth plan that will successfully address those areas?

Even more than that, Macy’s earnings report may serve as a proxy for how other department stores are performing.

* Expected date and time of day.

• Market value: $283.3 billion
• Earnings Report Date: Nov. 15, before market open*
• Walmart (WMT, $94.69) stood back for years and let rival Amazon.com (AMZN) grow into the dominant name it has become. It paid the price, too. But the world’s biggest retailer finally put its foot down a few years ago and pieced together a real turnaround.

Evidence of that turnaround materialized in the latter part of 2016, when year-over-year sales growth not only was positive, but once again accelerated. Income still is dwindling, but there’s light at the end of the tunnel. Walmart’s online sales are particularly encouraging: They were up 40% in Q2, marking the fifth straight quarter of strong double-digit e-commerce growth.

Turning sales around is relatively easy, though. It’s much tougher to maintain sales growth, and it’s tougher still to grow the bottom and top lines at the same time in a highly competitive environment like the one we’re in now. Investors have been patient thus far, but that patience may be wearing thin.

The recently completed quarter may be the turning point. Analysts are looking for revenue growth of 1.6%, but profits are finally expected to improve from $1 per share a year ago to $1.03 per share this time around.

Walmart’s report also may offer another glimpse at the impact of relatively new tariffs on consumers.

* Expected date and time of day.

Preferred stocks – a high-yield asset that’s typically referred to as a stock-bond “hybrid” because it has characteristics of each – are treading water this year after a strong showing in 2017.

But that’s OK. Preferred stocks typically aren’t bought for upside potential – it’s about stability and income. “Straight preferred stock funds without other equities are fixed-income securities with a low correlation to the stock market,” says Jay Hatfield, founder and chief executive officer of Infrastructure Capital Advisors (InfraCap) and co-portfolio manager of the Virtus InfraCap U.S. Preferred Stock ETF (PFFA). He adds that they can reduce portfolio volatility “and be used to rebalance during down markets.”

Now might be the right time, considering the rising-interest-rate atmosphere. While preferreds “have long duration and are sensitive to movements in long-term interest rates,” Hatfield and his team expect the 30-year Treasury to stay in the 3%-3.5% area, which means preferred stocks “will be attractive with yields of over 6%.”

Eric Chadwick, president of preferred-stock specialist Flaherty & Crumrine, also downplays any interest-rate risk. “Preferreds tend to perform well relative to other fixed income in periods of rising interest rates, although the path may be bumpy along the way,” Chadwick says, adding that preferreds tend to price in interest rate hikes early.

Here’s a look at 10 funds that can help you jump on this income opportunity in preferred stocks. Chadwick and Hatfield both suggest investing in a broad, actively managed preferred-stock funds, though investors looking for inexpensive options have their pick of a couple cheap exchange-traded funds, too. Let’s dig in:

Data is as of July 10, 2018. Click on ticker-symbol links in each slide for current share prices and more.

• Market value: $16.8 billion
• SEC yield: 5.7%
• Expenses: 0.47%, or $47 annually for every $10,000 invested
• The iShares US Preferred Stock ETF (PFF, $37.97) is one of the most basic options for investors looking to get into preferred shares. It’s the largest exchange-traded fund by assets under management, it has high volume and its expenses are reasonable. Plus, at roughly 300 holdings, it’s plenty diversified.

The PFF is very typical in that the largest chunk of preferreds are in bank, insurance and other financial stocks (66%) from the likes of Citigroup (C), Barclays (BCS) and Wells Fargo (WFC). Another 14% is invested in real estate investment trust (REIT) preferred stocks, and there’s a smattering of energy, utility and other preferreds as well.

You’re not getting anything complex or targeted with PFF, for better or worse. It’s cheap, it’s efficient and it’s diversified.

*SEC yield reflects the interest earned after deducting fund expenses for the most recent 30-day period and is a standard measure for bond and preferred-stock funds.

• Market value: $192.7 million
• Distribution rate: 7.4%*
• Expenses: 1.26%
• The Flaherty & Crumrine Total Return Fund (FLC, $19.35) has a goal of, obviously, generating the best total return over a long period of time. Mission accomplished: Over the past 10 years, it has beaten the PFF by a wide margin of 246% to 94%.

Flaherty & Crumrine isn’t a household name among most investors, but it’s a pretty big player in preferred stocks. The fund, over the past 35 years, has grown to manage five closed-end funds (CEFs) and a mutual fund all dedicated to preferred shares in one way or another.

The catch? A large part of that return is paid out through its 7.4% distribution, which is considerably larger than PFF’s dividend … but that distribution isn’t as dependable as PFF. Payouts have fallen by about a quarter over the fund’s 15-year lifespan, including a recent cut at the start of 2018 (the third cut in three years). You’re still getting a higher yield than many preferred funds, but you have to accept that cuts are part of life with FLC, which may affect your retirement planning. So is volatility – this fund bobs and weaves far more than the PFF.

But long-term, Flaherty & Crumrine Total Return has rewarded patient investors.

*Distribution rate can be a combination of dividends, interest income, realized capital gains and return of capital, and is an annualized reflection of the most recent payout. Distribution rate is a standard measure for CEFs.

• Market value: $153.1 million
• Distribution rate: 6.8%
• Expenses: 1.28%
• Flaherty & Crumrine Preferred Income Fund (PFD, $13.68) is one of the oldest preferred-stock funds in existence, launching in 1991. Its past decade of performance has been excellent, at 13% annually to easily outstrip most of its competitors.

But there’s something else to like about PFD right now. CEFs’ market prices can deviate from their net asset values – sometimes trading at a premium, and sometimes at a discount. Over the past three years, this fund on average has traded at a nearly 4% premium to its NAV. However, that premium is a slim 0.4% right now – which means that current prices are a better deal than what PFD has offered for most of the past three years.

Like FLC, PFD’s distribution was cut at the start of 2018 (and like FLC, this is the third cut in as many years), and that nipped the price significantly. But the fund’s total NAV return hasn’t significantly faltered. Considering that, and considering that PFD has gone through periods of flat performance many times before only to reverse course and beat the market soon thereafter, investors have reason to believe that a higher premium – and higher prices – may be in the offing.

• Market value: $461.1 million
• Distribution rate: 7.8%
• Expenses: 1.25%
• The John Hancock Preferred Income Fund II (HPF, $21.68) is managed by John Hancock, which is known for providing a variety of retirement solutions; its CEFs are just one link in a very large chain.

This John Hancock fund isn’t terribly different from many other funds – it’s mostly domestic with a smattering of international stocks. Banks play a big role. Like a couple of these other funds, too, HPF trades for a slight premium at the moment – for good reason. The fund has generated an attractive 11.3% annual average total return over the past decade, and its distribution has remained mostly level over the past seven years.

Credit quality on the bonds isn’t particularly stellar, with 56% of the portfolio in BBB (just above junk) and another 40% in BB (junk) or worse. But that – as well as high 34% leverage, which is where the fund takes out debt to finance even more investment – is helping fuel an attractive distribution rate of nearly 8%.

• Market value: $325.8 million
• Distribution rate: 7.6%
• Expenses: 1.19%
• The Cohen & Steers Select Preferred and Income Fund (PSF, $27.16) primarily focuses on preferreds (C&S also offers mixed funds that include REITs and other high-yield investments). Nearly 80% of the fund is invested in banking, insurance and financial-services companies, with utilities the next biggest sector weighting at just 6%.

Cohen & Steers is a CEF and mutual fund provider that has been around for more than three decades, and they offer up a slew of benchmark-beating funds that invest in both preferred stocks and REITs.

PSF is one of the firm’s younger funds – and one of the newer preferred funds period – with a 2010 launch. Since then, it has returned 10.2% annually at its market price and 10.3% at its NAV; the benchmark has risen just 6.4% over the same time period.

A couple things that make Cohen & Steers Select Preferred and Income a dividend dream: Its distribution has remained constant since inception, and in fact, it has even paid out a few special dividends throughout its history. This is one of the highest yields you can find in this corner of the market that hasn’t suffered multiple cuts over the years.

• Market value: $778.8 million
• Distribution rate: 7.0%
• Expenses: 0.67%
• The Nuveen Preferred & Income Term Fund’s (JPI, $23.28) 7% distribution should keep investors well taken care of all the way through 2024.

Wait … why 2024?

That’s the year the fund will liquidate. JPI is what’s called a “term closed-end fund,” which means its objective is to provide a regular dividend stream until its termination date. For JPI, that date is Aug. 31, 2024. On that date, JPI essentially will disband, selling all of its assets in an orderly fashion and distributing the proceeds as a one-time special dividend to all shareholders.

Term CEFs are popular with investors who just want stable income for a fixed period of time. They’re also popular because, the closer you get to the termination date, the more the fund’s discount to NAV will disappear. For that reason, term CEFs tend not to trade at ludicrous discounts or premiums, especially as their dates approach. That makes JPI’s 4% discount a rare opportunity to get a fund for a steal, collect the income and enjoy the additional boost to prices as the discount disappears with in the next six years.

• Market value: $70.4 million
• SEC yield: 3.6%
• Expenses: 0.55%

The iShares International Preferred Stock ETF (IPFF, $17.50) is just what it sounds like: Essentially, it’s the PFF for international preferreds.

Preferred stocks aren’t very popular outside of America, so there simply aren’t many countries where the fund can find assets to buy. That’s partly why IPFF is heavily invested in Canada – 82% of its portfolio there, with another 10% in the U.K. The third-largest holding is preferreds within Guernsey – a Channel Island with a population of 63,026 that, along with other islands, forms a Crown dependency known as the Bailiwick of Guernsey.

A long way of saying, this fund really stretches for its holdings.

The Canadian focus means IPFF will actually benefit from rising oil prices. That’s because both the banks and energy firms that issue preferred shares profit from rising oil prices.

IPFF does have a very uneven dividend; it pays a 3.6% yield, but dividends will vary heavily based on movements in the U.S. dollar. Thus, IPFF investors must be patient with changes in their payouts.

• Market value: $605.7 million
• SEC yield: 4.5%
• Expenses: 1.52%

The only way you’ll be able to invest in preferred stocks in your 401(k) is via a mutual fund. There are a few such funds out there, though the Salient Select Income Fund (KIFAX, $21.39) is among the better (albeit more expensive) ones. KIFAX has averaged 8.9% in annual total returns over the past decade, putting it in the top 10% of similar funds in that time frame.

That’s in part because KIFAX isn’t a typical preferred fund. For one, the fund tends to focus on preferreds from real estate investment trusts. But more importantly, the company can invest not just in preferred stocks, but also in common stocks and bonds. That flexibility to diversify helps the fund maintain a strong income stream while also occasionally riding equity tailwinds. Also, the 100% U.S.-based portfolio means you aren’t exposed to any foreign economies or currencies.

The only catch is that you’ll pay for KIFAX. In addition to a 1.52% expense ratio that’s much higher than most CEFs and ETFs, investors also must deal with a front-end sales charge of up to 5.75%.

• Market value: $1.1 billion
• SEC yield: 4.3%
• Expenses: 0.9%

Even if you’re still convinced that preferreds may suffer because of the Federal Reserve’s interest-rate hikes, you can still invest in preferred stocks with a feeling of safety.

How? By purchasing low-duration preferred stocks.

The Cohen & Steers Low Duration Preferred & Income Fund (LPXAX, $9.94), with an effective duration of just about two years across the portfolio, does exactly that. LPXAX is heavily invested in short-term preferred stocks that are less sensitive to rising rates – and thus an attractive safe haven for investors when interest rates are expected to rise.

Just know that a shorter duration means a lower yield. LPXAX typically yields between 3% and 4%, which is much lower than most of the other funds on this list. It’s the trade-off you make for safety.

• Market value: $2.6 million
• SEC yield: N/A
• Expenses: 1.36%

Virtus Investment Partners is a smaller asset manager focusing on a variety of assets, with a focus on high yield. Virtus Infracap U.S. Preferred Stock ETF (PFFA, $25.99) is their newest offering, launching in mid-May 2018.

PFFA is designed to invest in a variety of preferred stocks issued in America, including from master limited partnerships (MLPs) and REITs. So at the moment, top holdings include preferreds from companies such as Annaly Capital Management (NLY) and Energy Transfer Partners, LP (ETP). It will use modest amounts of leverage and typically hold about 100 securities.

And that’s about all we can definitively say about PFFA.

The fund is so young that is has only brought in about $2.6 million in assets, and it hasn’t even listed a yield yet. Thus, you don’t know what kind of income you’re going to get.

So, why bother with a new, untested fund? Because if you want high income, and you also believe both infrastructure investment and energy prices are going to rise, PFFA could pay off in spades. And there’s a good reason to think that scenario will play out; the economy still is growing, and both sides of the aisle in Washington want infrastructure spending. Greater demand for energy would help the MLP-tethered facets of the portfolio, giving you a little more oomph than other funds investing in preferred stocks.

Volatile markets can be a blessing in disguise for bargain hunters of blue-chip stocks. After all, name-brand companies don’t go on sale every day. If it takes inflation fears, presumptive trade wars or a whiff of scandal to get good stocks at great prices, so be it.

But how do you find such blue-chip bargains? One way is to key on some fundamental valuation measures. Any time a big, quality name is trading at a price-earnings multiple that doesn’t adequately reflect it earnings growth prospects, you have a potentially cheap stock on your hands. Put another way: If a stocks trades at 15 times estimated earnings, but analysts forecast those same earnings to grow at an average of, say, 25% a year for the next five years, something’s up.

Now, it could be that whatever’s up is not good. Sometimes a stock is cheap for a reason. Perhaps it represents equity ownership in a virtual Dumpster fire, for example. When it comes to quality blue-chip stocks, however, there’s a chance the market is simply giving a patient, long-term investor a break on price.

Here are some big-name blue-chip stocks we found that aren’t quite trading up to their growth prospects. They might be cheap for now, but they probably won’t stay that way for long.

Data is as of March 13, 2018. Companies are listed in alphabetical order. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ ratings provided by Zacks Investment Research. Click on ticker-symbol links in each slide for current share prices and more.

• Market value: $35.4 billion
• Dividend yield: 2.0%
• Analysts’ opinion: 3 strong buy, 0 buy, 6 hold, 1 sell, 1 strong sell
• Aflac (AFL, $90.75) started the year in horrific fashion after a report of alleged fraud sent shares into a dive. Memories of Wells Fargo’s (WFC) phony-accounts scandal likely exacerbated the selloff, but shares in AFL have quietly come back as fears of wrongdoing have died down. Indeed, they’re up about 3% in 2018, essentially matching the performance of the broader market.

Analysts at Janney Montgomery Scott have been steadfast throughout with a “Buy” rating on the stock. “We continue to believe that Aflac’s valuation is attractive and feel that, over time, investors will likely be rewarded from current levels,” they write. Even after recovering from the January swoon, Aflac stock trades at nearly 11 times expected earnings. That’s a bargain given that profits are projected to rise an average of nearly 14% annually over the next five years.

Then there’s the matter of the dividend, which has been as solid as they come. The supplemental insurance company has hiked its payout every year for 36 consecutive years.

• Market value: $792.6 billion
• Dividend yield: N/A
• Analysts’ opinion: 23 strong buy, 4 buy, 5 hold, 0 sell, 0 strong sell

Google parent Alphabet (GOOGL, $1,140.42) sure doesn’t look like a bargain at first glance. Not many stocks that go for more than $1,000 a pop do. But don’t let the four-figure share price fool you – the search giant is undervalued given its longer-term growth prospects.

GOOGL shares change hands at a bit less than 24 times expected earnings, according to data from Thomson Reuters. Yet earnings are expected to increase at an average annual rate of almost 25% a year for the next half-decade. That’s at least fair, and actually cheap by today’s market standards. Indeed, based on what investors are paying for earnings growth, Alphabet is cheaper than Standard & Poor’s 500-stock index.

William Blair equity research rates GOOGL at “Outperform” (equivalent of “Buy”), noting the increasing importance of non-advertising products like hardware and cloud-based services.

• Market value: $913.2 billion
• Dividend yield: 1.4%
• Analysts’ opinion: 13 strong buy, 1 buy, 13 hold, 0 sell, 1 strong sell
• Apple (AAPL, $179.96) is another mega-stock whose stock price doesn’t fully reflect the company’s earnings potential. As with Alphabet, this is partly a reflection of Apple’s massive size. It simply gets harder to grow rapidly off a bigger and bigger base.

But there’s no law that says Apple can’t be the first trillion-dollar company, even if shares are priced like they are. AAPL stock goes for less than 14 times expected earnings. Oh, and it’s also sitting on a massive cash pile – Chief Financial Officer Luca Maestri says the company’s “current net cash position is $163 billion,” and Apple plans on spending much of that to eventually become “approximately net-cash neutral.”

Warren Buffett’s Berkshire Hathaway (BRK.B) made Apple its most-bought stock over the last year. The world’s greatest value investor knows a cheap stock when he sees one.

One risk to watch out for with Apple, however, is a potential looming U.S. trade war – specifically with China. The fact that its products are even merely assembled in China could in theory come back to bite it, so investors should keep an eye on that developing situation.

• Market value: $91.8 billion
• Dividend yield: 2.0%
• Analysts’ opinion: 8 strong buy, 2 buy, 10 hold, 0 sell, 0 strong sell

Shares in Caterpillar (CAT, $153.69) have stumbled lately. The threat of a global trade war will do that to the world’s largest maker of construction and mining equipment. Free trade is critical to CAT, to be sure, note analysts at William Blair, which is partly why they rate shares at “Market Perform” (equivalent of “Hold”). But they also note that Caterpillar, a component of the Dow Jones industrial average, is “probably (in) the best position it has ever been.”

Although trade-war rhetoric might be on the rise, it remains just that. Meanwhile, a synchronized global economic recovery remains very real. “Caterpillar (has) seen a major increase in demand for products with the resurgence of the global economy and tax reform in the United States,” William Blair notes.

Caterpillar’s stock fetches just less than 15 times expected earnings, and yet earnings are projected to rise an average of 20% a year for the next five years. Trade risks remains, but a good chunk appears already to be reflected in CAT’s price.

• Market value: $528.4 billion
• Dividend yield: N/A
• Analysts’ opinion: 23 strong buy, 4 buy, 2 hold, 0 sell, 0 strong sell

The valuation story on Facebook (FB, $181.88) is similar to that of Alphabet and Apple. Yes, it’s a giant company, but it still has the potential for outsized earnings growth that’s not adequately reflected in the stock.

Investors are willing to pay 21 times Facebook’s estimated earnings, and yet those selfsame earnings are projected to increase at an average rate of 27% a year. Put that way, Facebook is trading at a discount to the S&P 500 by their respective growth prospects.

Some investors worry that changes instituted by Facebook to its News Feed put revenue growth at risk. Analysts say those fears are overblown. “We continue to believe that any slowdown in time spent (on Facebook) will be compensated for by higher-quality time spent,” says Canaccord Genuity, which rates shares at “Buy.”

• Market value: $278.1 billion
• Dividend yield: 0.6%
• Analysts’ opinion: 24 strong buy, 2 buy, 1 hold, 0 sell, 0 strong sell
• Visa (V, $123.18), as we noted recently, is a favorite stock of hedge funds, and it’s easy to see why. As the world’s largest payments network, perhaps no company is as well-positioned to benefit from the growth of cashless transactions and digital mobile payments. Analysts at Credit Suisse, who rate shares at “Outperform” (equivalent of “Buy”), recently applauded the company’s new co-brand deals with Starbucks (SBUX) and Uber, as well as its renewed partnership with Marriott (MAR).

Visa stock is up about 37% over the past 52 weeks, but they still look like a good deal for patient investors. Shares go for less than 24 times forward earnings on expected average profit growth of more than 18% a year. No, that doesn’t make V stock a steal, but are you really going to argue with Buffett? Berkshire Hathaway, of which the famed value investor is chairman and CEO, owns nearly 11 million shares in Visa.

Many investors are familiar with some of the iconic businesses Warren Buffett’s Berkshire Hathaway (BRK.B) has held stakes in for many years, or even decades. From Coca-Cola (KO) to Wells Fargo (WFC), a lot of these dividend stocks have now reached a more mature stage in their lifecycle, providing predictable income, but far from stellar payout growth.

However, Berkshire Hathaway isn’t just invested in sleepy blue chips. It also holds a group of dividend-paying stocks that have potential to continue raising their payouts at a fast clip going forward.

These companies tend to have lower payout ratios (the percentage of earnings paid out as dividends), faster long-term earnings growth and management teams who are committed to returning higher amounts of capital to shareholders each year.

Let’s take a closer look at 10 Warren Buffett stocks with the fastest-growing dividends, many of which should continue rising at a double-digit pace.

Data is as of March 9, 2018. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Click on ticker-symbol links in each slide for current share prices and more.

• Market value: $29.4 billion
• Dividend yield: 0.70%
• 1-year dividend growth rate: 10%

Berkshire Hathaway acquired its stake in Sirius XM Holdings (SIRI, $6.54) during the fourth quarter of 2016. Interestingly, Sirius XM announced it would start paying its first regular dividend during that same quarter.

Despite the company’s short track record paying dividends and its relatively low yield, Sirius XM’s business model is very conducive to predictable, generous long-term dividend growth. In fact, management most recently boosted the company’s dividend by 10% in November 2017.

Sirius XM is a satellite radio business with long-term distribution relationships with major automotive manufacturers. The company makes its money by charging subscription fees to its 32.7 million subscribers for access to its radio channels that cover everything from sports and music, to news and comedy.

The firm’s massive base of subscribers allows Sirius XM to leverage its fixed costs to achieve impressive profitability; the company’s free cash flow margin sits above 25%. Adding subscribers requires little incremental cost, so every dollar of higher revenue really contributes to the company’s bottom line.

With a payout ratio near 20% and management guiding for continued subscriber growth in 2018, Sirius XM is poised to continue rewarding dividend growth investors for the foreseeable future.

• Market value: $35.1 billion
• Dividend yield: 0.8%
• 5-year annual dividend growth rate: 69%
• Southwest Airlines (LUV, $59.70) has been in business for more than 40 years and serves more than 120 million passengers annually. As the largest domestic air carrier, Southwest’s ascent to success has been fueled by a strong focus on customer service and low prices.

Chris Higgins, a senior equity analyst with Morningstar, notes that Southwest “obtained a cost advantage by flying one aircraft type (737s) with one-class cabins point to point to secondary airports, which allowed it to minimize costs and maximize aircraft utilization and employee productivity.”

Despite the airline industry’s notorious reputation for volatile earnings and bankruptcies, Southwest’s low-cost operations have helped the company remain profitable for 45 consecutive years. As a result, LUV has been able to pay uninterrupted dividends for more than 25 consecutive years, recording 21% annual dividend growth over the last 20 years, according to data from Simply Safe Dividends.

With a payout ratio below 15%, an investment-grade credit rating and an outlook for continued profitability, Southwest’s shareholders should see their dividend payments continue flying higher in the years ahead.

MORE FROM SIMPLY SAFE DIVIDENDS: Warren Buffett’s Top 10 Pieces of Investment Advice

• Market value: $192.7 billion
• Dividend yield: 0.5%
• 5-year annual dividend growth rate: 50%

One of the qualities Warren Buffett looks for in a company is its ability to profitably grow for many years into the future.

In fact, one his famous quotes is that “time is the friend of the wonderful business, the enemy of the mediocre.”

When Berkshire Hathaway initiated a stake in MasterCard (MA, $183.24) in 2011, it probably was attracted to the long-term trend of consumers and businesses migrating away from cash and check transactions in favor of electronic payment forms.

MasterCard doesn’t issue credit cards or extend credit, which are riskier activities. Instead, the company provides transaction processing services, taking a slice of each sales dollar processed over its payment network.

The company estimates its total market opportunity for capturing payment flows is approximately $225 trillion, providing plenty of opportunity for growth despite MasterCard’s relatively large business today.

In fact, management expects the firm’s earnings per share to compound at a mid-20% range from 2016 through the end of this year. MasterCard should have little difficulty continuing to increase its dividend at a strong double-digit clip.

• Market value: $281.0 billion
• Dividend yield: 0.6%
• 5-year annual dividend growth rate: 23%

Morningstar senior equity analyst Jim Sinegal summed up Visa’s (V, $124.51) investment case in a recent note, writing, “As consumer spending around the world grows and digital methods continue to take share from cash, this wide-moat company should continue to flourish for years to come as an effective toll booth on global spending.”

Like MasterCard, Warren Buffett’s investment firm purchased a stake in Visa in 2011. The company continues to be a beneficiary of rising digital payments, recording double-digit growth in payments volume during the first quarter of its fiscal year 2018.

More than 3.2 billion Visa-branded cards are in circulation today, and that number continues to grow. The company’s scale and capital-light operations help generate an operating margin north of 60%, which has allowed Visa to compound its dividend by more than 20% annually over the last five years.

Mr. Sinegal believes Visa’s revenue growth will average 10% annually over the next five years, which, combined with Visa’s low payout ratio near 20%, should continue to support a robust outlook for payout growth.

• Market value: $913.2 billion
• Dividend yield: 1.4%
• 3-year annual dividend growth rate: 10%

Warren Buffett first bit into Apple (AAPL, $179.98) during the first quarter of 2016, acquiring a stake worth approximately $1 billion at the time.

Since then, Berkshire Hathaway has very aggressively added to its position. In fact, the firm’s stake in Apple is now valued at close to $30 billion, making it Berkshire’s most valuable equity stake.

Some Buffett disciples have been scratching their heads over this move, especially given the Oracle of Omaha’s general distaste for businesses operating in the fast-changing tech sector. However, Apple is a bit of a unique breed. Per Forbes, the company boasts the world’s most valuable brand, yet the stock’s price-to-earnings ratio trades at a discount to the Standard & Poor's 500-stock index's multiple.

Apple has created a unique ecosystem by tightly integrating its hardware and software offerings, resulting in a sticky and seamless experience for its customers. With a hoard of cash building, Apple reinstated its dividend in 2012 as part of its plan to return more capital to shareholders.

Thanks to tax reform, Apple plans to bring back most of the $252 billion in cash it holds overseas (minus about $38 billion after tax) to invest in new facilities and jobs. The company’s increased flexibility should also make it easier for Apple to continue returning generous amounts of cash in the form of dividends.

In fact, Morningstar analyst Brian Colello, CPA, wrote, “Given the firm’s whopping $163 billion of net cash today and high likelihood of strong free cash flow generation going forward, we can easily foresee Apple doubling its annual dividend and share repurchases over the next five years.”

• Market value: $82.8 billion
• Dividend yield: 1.1%
• 5-year annual dividend growth rate: 13%
• Costco (COST, $188.58) has never been a major holding in Berkshire Hathaway’s portfolio (less than 1% of its value today), but the company has been part of the portfolio since 2000.

As one of the largest membership warehouses in the world with a no-frills shopping experience, Costco focuses on offering lower prices and better values than its grocery and retail rivals. The company’s strategy has been a big success, with its more than 91 million cardholders paying Costco close to $3 billion in cash fees to access its warehouses, driving the bulk of the firm’s operating income.

Impressively, Costco enjoys a 90% renewal rate on its memberships, underscoring its unique shopping experience in an ever-competitive brick-and-mortar world.

Costco’s continued investments in organic grocery products and its company-owned Kirkland brand further increase its competitive advantages and the value it provides its members. As Argus analyst Christopher Graja, CFA, notes, “While Amazon is a threat to every retailer, we continue to like Costco based on its low prices and efficient operations. There is also a lot that Costco does that will be difficult for Amazon or anyone else to match on price and quality.”

Costco’s strengths have helped it compound its regular dividend by 13% annually over the past decade while also returning capital to shareholders through several large special dividends.

• Market value: $14.5 billion
• Dividend yield: 3.0%
• 1-year annual dividend growth rate: 26%

If you have ever eaten at Burger King, grabbed a coffee at Tim Hortons, or picked up some chicken at Popeyes, you have experienced part of Restaurant Brands International’s (QSR, $59.33) business. The company is one of the largest quick service restaurant businesses in the world, with more than 24,000 restaurants in over 100 countries.

Berkshire Hathaway’s stake arose when Burger King and Tim Hortons merged in 2014, granting Buffett warrants to purchase stock in the combined entity.

These businesses collectively enjoy impressive global scale, have well-known brands, and generate excellent cash flow thanks to their franchise-heavy focus. As a result, Restaurant Brands International has been able to increase its dividend every quarter since going public. Management more than doubled the company’s quarterly payout earlier this year, pushing QSR’s yield over 3% to provide a nice combination of current income and growth.

MORE FROM SIMPLY SAFE DIVIDENDS: Warren Buffett’s Complete Dividend Portfolio

• Market value: $48.1 billion
• Dividend yield: 2.9%
• 3-year annual dividend growth rate: 13%

ConocoPhillips (COP) spun off Phillips 66 (PSX, $95.91) in 2012. Berkshire Hathaway had owned a stake in ConocoPhillips, which he sold to increase his stake in Phillips 66 after the dust had settled.

Phillips 66 is a diversified petrochemical business with operations spanning chemicals, refining, midstream energy services, and retail gas stations.

Argus analyst Bill Selesky notes “this diversification has proven very valuable in different commodity price environments over the years, and, despite weak refining margins, we believe the company's cash flow is less volatile than that of most pure-play refiners.”

Phillips 66 is increasingly investing in its midstream and chemicals business, which should provide further cash flow stability as the firm’s business mix gradually shifts away from refining.

Despite operating in the cyclical energy sector, Phillips 66 has rewarded its shareholders with regular dividend increases since trading as a standalone company, recording a 30% dividend compound annual growth rate since September 2012.

Management last raised the company’s dividend by 11% in June 2017, and if Argus’ projections for double-digit earnings growth in 2018 and 2019 play out, income investors should be in for continued gains.

• Market value: $335.2 billion
• Dividend yield: 1.3%
• 3-year annual dividend growth rate: 48%

Berkshire Hathaway bought $5 billion of Bank of America’s (BAC, $32.72) preferred stock in 2011 and received warrants for 700 million shares. Buffett exercised the firm’s warrants during the third quarter of 2017, resulting in a BofA stake worth approximately $20 billion today.

Bank of America has come a long way from the financial crisis, and Buffett’s capital infusion in 2011 helped the company deal with a growing pile of fines and lawsuits. The bank has aggressively cut costs, focused more on less risky lending businesses, and significantly improved its financial strength since then.

As a result, Bank of America has received the Fed’s blessing to boost its dividend significantly, including a 60% jump last summer.

Should economic growth and interest rates continue rising, the bank’s profitability and dividend will likely follow suit.

• Market value: $85.2 billion
• Dividend yield: 1.4%
• 5-year annual dividend growth rate: 11%
• American Express (AXP, $99.05) has paid uninterrupted dividends for more than 20 consecutive years, compounding its payout by 8% annually over the past two decades, according to data from Simply Safe Dividends.

Founded in 1850, American Express is one of the oldest companies in the market and one of Berkshire Hathaway’s oldest investments. The firm initiated a position in the 1960’s when American Express shares plunged more than 50% as it dealt with the infamous salad oil scandal.

Today, American Express is a diversified financial services company that is perhaps most known for the credit card products and travel-related services it provides to consumers and businesses.

Morningstar’s Sinegal believes American Express’ primary competitive advantages remain intact and include “a reputation for superior service, a network of attractive customers and merchants, and a corporate business with high switching costs.”

Sinegal says American Express can grow its income at a 5% clip starting in 2021, which, combined with the firm’s healthy payout ratio near 20%, suggests dividend growth investors can expect at least mid-single-digit payout growth over the medium-term.

Brian Bollinger is long AAPL, COST, MA, SIRI and V.

The stock market’s gains may have you dancing a jig. But they may also have you breaking into a sweat. To ease your anxiety, you might consider adding a small dose of alternative investments—things that zig when the stock market zags—to your portfolio, even if it means giving up some potential returns. “As exciting as the stock market is today,” says Dayna Kleinman, of financial services firm Robert W. Baird & Co., “you should prepare your portfolio for a market shift by adding an investment that doesn’t move in lock step with the market.”

The results can be eye-opening. Consider the performance of one type of alternative investment, market-neutral funds, during the financial crisis a decade ago. These funds try to achieve zero market risk by employing an array of strategies with a number of different assets. While Standard & Poor’s 500-stock index lost a cumu­lative 55.3%, including dividends, from October 9, 2007, through March 9, 2009, market-neutral funds dipped just 1.8%, on average. Other alternatives pull in the opposite direction of the overall bond market.

The category sounds exotic, but alternatives, once the province of ultra-rich or professional investors, have become more mainstream thanks to the launch of hundreds of mutual funds and exchange-traded funds. These days, many experts say alternatives should be a part of your total asset allocation. “Alternatives smooth the ride of your overall port­folio” so you’re less likely to sell at the wrong time, says Matt Osborne, of Altegris, a money management firm. “That’s the goal of diversification.”

Some advisers are recommending that clients boost their exposure to alternatives now in order to guard against the risks of a stock market that’s reaching a top and a bond market that’s coping with rising interest rates (bond prices fall when rates go up). Wells Fargo Investment Institute, the research and strategy arm of the giant bank, recommends a 23% allotment to various alternative investments for moderate-risk investors, for example, up from 16% two years ago. At Altfest Personal Wealth Management, in New York, 15% of client assets are invested in alternatives, up from 10% last year.

How they work. The diverse array of alternative investments share one common trait: They don’t behave as stocks or bonds do. The expansive category includes securities that aren’t traditional stocks or bonds, as well as strat­egies that might include stocks or bonds but eschew a conventional buy-and-hold approach. Commodities and currencies fit in here, as do funds that use options to hedge the stock market.

Alternatives are a tough sell. The strategies can be complex, and alternative funds charge 1.57% in annual fees, on average—more than the 1.11% expense ratio for the average actively managed large-company stock fund. Alternative funds have short track records, so most haven’t been tested in a bear market.

But the biggest hurdle for alternatives is that investors tend to misunderstand their role as portfolio diversifiers. Contrary to popular belief, most alter­native strategies aren’t designed to beat the broad indexes. They’re supposed to cushion market dips or supply ballast in rocky markets, giving you greater peace of mind. “It’s like a seat belt. You put it on, but you hope you won’t need it,” says Baird’s Kleinman.

Consider the performance of two hypothetical portfolios. For the 20-year period through December 2016, a traditional portfolio with 60% invested in the S&P 500 and 40% in Bloomberg Barclays U.S. Aggregate Bond index returned an annualized 7.1%, according to Baird’s calculations. But a portfolio with 50% in stocks, 40% in bonds and 10% in indexes that included various alternative strategies returned 7.4%, with fewer ups and downs. The largest loss in the stock-and-bond portfolio over that stretch was 33.1%, compared with a 27.3% loss for the portfolio with a 10% allocation to alternatives.

Choose the right strategies. The key to alternative investing is to focus on strategies that mitigate your market concerns. For investors willing to give alternatives a shot, Morningstar alternatives analyst Tayfun Icten suggests a trio of strategies that together should offer a balanced approach to reducing stock market risk and volatility. With this trio, says Icten, you’ll give up some stock market gains, but you’ll make up for it if things head south.Start small. Divide 5% of your overall portfolio among the three types of investments listed below (in order of increasing risk), with a goal of inching up to a 10% allocation as your comfort level with alternatives increases (returns are as of December 8, unless otherwise noted).

Market-neutral funds. If your goal is to invest in an asset that doesn’t move in sync with the S&P 500, consider a market-neutral fund, such as a merger-arbitrage fund. The funds invest in stocks of already announced takeover and merger targets, hoping to capture the last bit of appreciation before a deal is finalized. Although merger-arbitrage funds invest in stocks, returns are driven by completed deals, not by corporate earnings. The funds tend to hold up well in stock market downturns. And as rates rise, returns for these funds should follow suit. Merger-arbitrage strategies have historically returned three to five percentage points more per year than the yield of Treasury bills (about 1.5% currently). Our favorites include IQ Merger Arbitrage ETF (symbol MNA), which tracks a proprietary index, and Arbitrage Fund R (ARBFX).

Options-based funds. You don’t have to sell stocks to make your portfolio sturdier. Options-based funds allow you to maintain your stock exposure—or even put new money in the market—with some degree of safety. JPMorgan Hedged Equity A (JHQAX) has a lower risk profile than a typical balanced fund of 60% in stocks and 40% in bonds, and a better three-year track record, too.

A portion of the fund holds 200 large-company stocks to approximate the S&P 500. To protect your portfolio from market sell-offs, the other portion uses options—calls, which give you the right to buy a stock at a stated price by a certain date, and puts, which let you sell at a specific price by a certain date. The fund typically charges a sales fee, but you can buy it for no transaction fee (that is, no load) at Fidelity, Schwab and TD Ameritrade. Since Hedged Equity launched in 2013, it has returned 7.6% annualized, which lags the S&P 500, but the fund was 40% less volatile than the index.

Long-short stock funds. These funds bet on some stocks and against others with the goal of delivering respectable returns with low volatility. The funds have been 15% to 25% less volatile than an S&P 500-stock index fund over the past decade. The trade-off: You won’t beat the market, but you likely won’t lag far behind. Since Jonas Svallin became lead manager of Schwab Hedged Equity (SWHEX) in August 2012, the fund has returned 8.9% annualized. That trails the 15.3% gain in the S&P 500 over the same period. But the fund was also 25% less volatile than the index. The managers use a proprietary stock-rating system to buy and hold the top-rated U.S. stocks and sell short (a bet that prices will fall) the bottom-rated stocks. A recent top stock held in a long position was Citigroup, the financial services firm. A top short: Tri Pointe Group, a regional homebuilder based in California.

Warren Buffett is a big fan of bank stocks. His holding company, Berkshire Hathaway (BRK.B), owns billions of dollars' worth of shares of some of the nation's biggest banks including Bank of New York Mellon (BK), Goldman Sachs (GS), M&T Bank (MTB), U.S. Bancorp (USB) and Wells Fargo (WFC). Buffett really loves bank stocks when the Federal Reserve is hiking interest rates, a monetary-policy cycle that can boost banks' bottom lines.

But how do you jump on the bank bandwagon if you're a small investors lacking Buffett's billions? One cost-effective approach is to focus on low-priced shares of smaller regional banks that can profit from the same tailwinds that are benefiting big banks. We found three promising regional bank stocks trading under $20 that look attractive.

But before you place a buy order, don't neglect to weigh the impact of trading commissions. Let's say you want to invest $100 in each of the three bank stocks we recommend. Even at just $4.95 per online trade, the going rate at brokerages such as Fidelity and Schwab, your investment would already be down 5%. For small trades, consider opening a free Robinhood account instead. You can use the brokerage's smartphone app to make no-commission stock trades. An upgrade to the premium service, which gives investors access to after-hours trading and margin accounts, starts at $10 a month.

Data is as of May 2, 2017, unless otherwise indicated. Click on ticker-symbol links for current share prices and more.

(Stocks are listed in alphabetical order. Analyst ratings are per Zacks and Thomson Reuters.)

• Symbol: HBAN
• Share price: $12.95
• 52-week range: $8.05 - $14.74

Huntington Bancshares is a regional bank based in Columbus, Ohio. A recent merger with FirstMerit Bank expanded operations to Michigan, Wisconsin and Indianapolis. That expansion across the Rust Belt could prove to be beneficial if the White House gets its way on trade protectionism, corporate tax cuts and support for the coal industry.

Cost saving from the acquisition could also help Huntington get a grip on its expenses. The bank missed analysts' average earnings forecast for the first quarter because of higher costs. Investors should be reasonably confident that it will. The company is projected to produce per-share profit growth of 8.5% this year and 15% next year, according to Zacks.

Of the 15 analysts covering the stock, seven say it's a strong buy, one rates it at buy, and seven call it a hold. A recent upgrade to Buy from Hold at Jefferies could be the first of many if Huntington can bounce back with a better second-quarter showing.

The earnings report won't come out until this summer, however. In the meantime, investors will have to make due with a dividend yield of 2.3%, based on the last four quarterly dividend payments. That's more than competitive with the regional bank average, which stood at just 1.63% at the beginning of 2017.

• Symbol: KEY
• Share price: $18.48
• 52-week range: $10.21 - $19.53

KeyCorp, the Cleveland-based regional bank, is starting 2017 on the right foot by delivering better-than-expected revenue and earnings for the first quarter. The happy surprise was due to cost savings from its 2016 acquisition of First Niagara Bank and lower losses on credit.

Analysts at Wedbush said KeyCorp is "firing on all cylinders" and has a lot of momentum going forward. "The first quarter tends to be seasonally the weakest and momentum usually builds throughout the year," Wedbush notes. "Additionally, the First Niagara acquisition is performing better than expected."

Wedbush rates shares at outperform with a $22 price target. That gives the stock implied upside of 18% over the next year or so. The wider research community is split, but it also sees solid gains ahead. Six analysts say KeyCorp is a strong buy, one rates it at buy and nine call it a hold, according to Zacks. However, their average target price of $20 still calls for price appreciation of 9% over the next 12 months.

In another positive for the bank, rising interest rates will ease pressure on its profit margins, analysts note. The improved outlook for banks and the fruits of the First Niagara acquisition look to make shares a winner this year.

• Symbol: UCFC
• Share price: $8.59
• 52-week range: $5.60 - $9.50

United Community Financial Corp. is the holding company for the Home Savings and Loan Company of Youngstown, Ohio. It's a small bank, but it's getting big praise from the analyst community. Boenning & Scattergood says its transformation into a "formidable" commercial banking operation is "nothing short of impressive." B&S rates the stock at outperform, and it's not alone. The three analysts tracked by Thomson Reuters all say it's a buy.

The bank has been active in the mergers and acquisitions markets, which could spur a big jump in operating profits, B&S says. Companies often need to bolster their funding when interest rates are moving up.

Shares in United Community Financial appear to be taking a breather after a strong 2016. The stock gained more than 50% last year and is currently down about 3% year-to-date. The pause shouldn't last long, if analysts are correct. Indeed, they're looking for the stock to rise 16% in the next 12 months.

Be forewarned that this is a very small stock. The company’s market capitalization – share price times number of shares outstanding – is just $424 million. The aforementioned regional bank KeyCorp has a market capitalization of more than $20 billion. Small stocks tend to be more volatile than large ones.

The Federal Reserve raised its target of the federal-funds rate, the interest rate banks charge each other for overnight loans, by a quarter point to a range of 0.75% to 1%, and that’s great news for Warren Buffett’s Berkshire Hathaway (symbol BRK.B) and its shareholders. As a bondholder, owner of insurance companies and an investor in big banks, Berkshire profits from rising interest rates in a number of ways, says David Kass, a professor at the University of Maryland's Robert H. Smith School of Business who studies Buffett and is a Berkshire investor.

"Since Berkshire currently has about $85 billion in cash invested primarily in short-term Treasuries, a [one percentage point] increase in short-term interest rates results in an additional income of $850 million per year for Berkshire," Kass says. "Furthermore, Wells Fargo, one of Berkshire's largest equity investments, will benefit from an increase in earnings as interest rates rise.”

Berkshire owns nearly 500 million shares of Wells Fargo (WFC) alone. Other bank holdings include 85 million shares of U.S. Bancorp (USB), 5 million shares of M&T Bank (MTB), 11 million shares of Goldman Sachs (GS) and 22 million shares of Bank of New York Mellon (BK). Berkshire also has a substantial investment in Bank of America (BAC) through dividend-paying preferred shares and warrants that can be exchanged for common stock at a deep discount. (Holdings are based on Berkshire's securities disclosures and CNBC's Berkshire Hathaway Portfolio Tracker.)

Then there's Berkshire's sprawling insurance empire, which is a big under-the-radar beneficiary of rising interest rates. Insurance firms have a continuous inflow of cash from premium payments that isn’t immediately paid out in claims. The difference, known as the float, is held mostly in safe, liquid investments. That makes insurers large investors in high-quality short-term debt, which will start to pay higher interest rates in response to the Fed's latest rate hike.

"If our premiums exceed the total of our expenses and eventual losses, our insurance operation registersan underwriting profit that adds to the investment income the float produces," writes Buffett in his 2016 letter to shareholders. "When such a profit is earned, we enjoy the use of free money – and, better yet, get paid for holding it."

Since short-term debt rolls over relatively quickly, insurance companies can earn more interest on their holdings in a rising-rate environment as they buy new debt issued at higher rates. Berkshire owns more than a dozen insurance subsidiaries, including biggies Geico and General Re, all of which benefit from rate hikes.

As Buffett points out in his annual letter to shareholders, between its investments and subsidiary ownerships, Berkshire is always "asset-sensitive," meaning that higher short-term rates help its consolidated earnings. On the other end of the spectrum, Buffett says rising rates make stocks like Berkshire a bargain at today’s prices. "Stocks are cheap if long-term rates are at 4%, four to five years from now," Buffett said at a November meeting with University of Maryland students.

The bottom line is that Berkshire's businesses, which comprise 81% of its assets, and its portfolio of stocks, which account for 19%, will become increasingly valuable as rates rise, says Kass. By extension, so will Berkshire Hathaway's stock.

Wells Fargo has given its customers one more reason to take a hard look at their accounts. The bank recently disclosed that about 1.5 million deposit accounts and 565,000 credit card applications may have been opened by employees without customer permission, according to the Consumer Financial Protection Bureau. The bank is paying $185 million in fines to the CFPB, the Office of the Comptroller of the Currency and the Office of the Los Angeles City Attorney.

If Wells Fargo identified you as a victim in its review of accounts dating back to 2011, you should have already received a letter of notification and a check in the mail, or a message on your bank statement and an account credit, says Wells Fargo spokesperson Richele Messick. The bank has refunded $2.6 million so far, with an average credit of $25.

It’s still a good idea to check for any unfamiliar accounts in your name, however. Wells Fargo is now reviewing accounts opened in 2009 and 2010, and more could turn up.

If you have a mortgage, auto, student or other loan but no deposit or credit card accounts with Wells Fargo, you should be in the clear, says Messick, because such lending and mortgages fall under a separate division of the bank.

You can see all of your Wells Fargo bank and credit card accounts by logging in at www.wellsfargo.com. Or to talk to a bank representative, visit a branch or call the customer service phone number listed on your bank statement or on the back of your credit card.

Here are two other steps to take to keep your finances safe:

Check your credit reports. Go to www.annualcreditreport.com to get free copies of your credit reports from each of the major credit reporting agencies: Equifax, Experian and TransUnion.

A handful of states—Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey and Vermont—require that the bureaus provide an additional free copy to residents each year, which could be useful if you’ve already claimed your free reports at AnnualCreditReport.com in the past 12 months.

Some online credit tools offer credit report information at no charge. At CreditKarma.com, for example, you can sign up to see information from your Equifax and TransUnion reports.

Search your credit reports for credit card accounts that you don’t recognize. Banks don't report deposit accounts or debit cards to the three big credit agencies, although overdraft protection on a checking account may show up on credit reports, says credit expert John Ulzheimer, formerly of Equifax and credit-scoring company FICO.

If Wells Fargo checked your credit report in the past two years, that activity would show up as an inquiry on at least one of your credit reports (after two years, inquiries disappear from the reports).

Any inquiries that appeared on your report within the past year could be pulling down your credit score. If you believe that any Wells Fargo inquiries from the past year are tied to an account application that you didn’t request, you can ask the bank to have them removed, Ulzheimer says.

You may not necessarily want to close a credit card account opened by Wells Fargo without your knowledge. Shutting it down may seem like a no-brainer. But by doing so, you could lower the amount of credit available to you. That could increase the ratio of your credit card balances to your overall credit limits—which may cause your credit score to drop. "If you have a credit card on your credit report that has no balance and a large, unused credit limit, that’s very likely going to help your score," says Ulzheimer.

To keep your credit score in healthy territory, always try to hold your credit card balances to no more than 20% to 30% of your credit limits. Leaving an unused credit card account open may be your best bet as long as it’s not racking up annual fees or other charges.

In some instances, the Wells Fargo employees—given incentives in the form of bonuses that they could earn for meeting sales targets—moved money from customers’ original bank accounts to the new, unauthorized accounts. If the balances of the original accounts weren’t high enough to cover the transfers, they triggered overdraft or insufficient-funds fees.

In other cases, unauthorized credit card applications that the bank approved left customers with cards that incurred annual fees, interest charges or other fees. Some customers also had debit cards and PINs activated in their names or were enrolled in online banking without their knowledge. That's what you need to look for—and act upon.

Preferred stocks combine elements of stocks and bonds in one investment. Typically issued at $25 a share, they pay a fixed rate of interest like bonds do. But preferreds trade like stocks and can bounce above or below the issue price. Preferreds tend to pay more than comparable bonds because they’re riskier. An issuer may be able to delay or cut payouts, and if the preferred is “non-cumulative,” the issuer isn’t on the hook to pay missed dividends. Issuers do owe all payments if a preferred is “cumulative,” but yields for these securities tend to be lower.

Earnings for All

• Bank Accounts: 1%-4%
• Municipal Bonds: 1%-3%
• Investment-Grade Bonds: 3%-5%
• Real-Estate Investment Trusts: 2%-6%
• Foreign Bonds: 3%-6%
• Closed-End Funds: 5%-11%
• High-Yield Bonds: 6%-8%
• Master Limited Partnerships: 5%-11%

Risks to your money. Similar to long-term bonds, preferred stocks tend to be sensitive to interest rate moves. Companies may be able to redeem, or “call,” their preferred shares at any time, potentially saddling investors with losses. Preferred stocks, which tumbled during the financial crisis, could dive if investors lose faith in banks and other issuers.

Hire a pro. The exchange-traded iShares U.S. Preferred Stock ETF (PFF, $39, 5.8%), a member of the Kiplinger ETF 20, offers access to hundreds of preferred securities issued by firms such as Allergan, HSBC and Wells Fargo. Banks and other financial firms account for 60% of its assets, though, concentrating most of the fund into one sector. Market Vectors Preferred Securities ex-Financials ETF (PFXF, $20, 6.0%) tracks an index of nonfinancial preferreds.

Do it yourself. With individual securities, stick to financially solid companies and buy shares below or only slightly above their $25 issuance price, says Michael Greco, cofounder of GCI Financial, an investment firm in Mendham, N.J. One preferred he likes: JPMorgan Chase 6.15% Non-Cumulative Preferred Series BB (JPM-PH, $26, 5.9%). Shares can’t be redeemed by JPMorgan until 2020, and dividends are considered to be “qualified,” meaning the maximum federal tax rate on the payments is 15% or 20%. Greco also favors Chesapeake Lodging Trust 7.75% Preferred (CHSP-PA, $26, 7.4%). A real estate investment trust, Chesapeake owns hotel properties such as the Hyatt Regency Boston and should easily cover its dividend payments, says Greco, though they don’t qualify for preferential tax treatment.

Next: Closed-End Funds to Earn 5% - 11%

Following billionaire investor Warren Buffett into stocks he owns has often been a profitable strategy over the past few decades. But reversing the order—buying a stock before Buffett buys it—can be even more fun and, potentially, more rewarding.

With that in mind, we went prospecting in two groups of companies: stocks that Berkshire Hathaway (symbol BRK.B, $146.11), Buffett’s holding company, has been buying recently, and shares that Buffett doesn't hold but we think he might buy. We looked for the things he looks for: companies that are leaders in their industries, that have a strong commitment to sharing profit with investors, and whose stocks sell for relatively low prices compared with earnings and underlying asset value.

A few caveats: First, Buffett's stock-picking abilities are legendary, but even the Oracle of Omaha has had some clunkers. Second, many of Berkshire's stock picks are now made by Buffett's two investing deputies, Todd Combs and Ted Weschler, not Buffett himself. And third, anyone guessing which stocks might be attractive to Berkshire is doing just that—guessing. Buffett hasn't sought our advice, and we're not waiting for the phone to ring.

Here's a look at four stocks that Berkshire has purchased recently, and four that we humbly suggest the master should consider.

Within each category, stocks are listed in order of market capitalization. Prices and related figures are as of April 22, 2016; price-earnings ratios are based on earnings estimates for the next four quarters, including the current one. The four stocks already owned by Berkshire Hathaway saw purchases since October 1, 2015, according to filings with the Securities and Exchange Commission.

• Share price: $50.62
• 52-week low/high: $44.50 - $58.77
• Market capitalization: $254.0 billion
• Price-earnings ratio: 12
• Dividend yield: 3.0%
• Ownership status: Berkshire already owns it
• QUIZ: How Well Do You Really Know Warren Buffett?

If there's one stock that epitomizes Buffett's devotion to companies he likes, it's probably Wells Fargo (WFC). The banking titan has been a Buffett holding since 1989 and now is Berkshire Hathaway's second-biggest stock bet, with 479 million shares worth $24 billion. After the stock slumped with the rest of the market late last summer, Berkshire once again stepped up to buy more, adding 9.4 million shares in the fourth quarter of 2015.

But bank stocks are off to a rough start in 2016. Wells slumped to $44.50 in early February, down 24% from its 52-week high and at a two-year low. Investors have had plenty of legitimate reasons to sell, including the weak global economy, rising energy-loan defaults as crude oil prices have crashed, and new calls to break up the megabanks—a view even espoused by Neel Kashkari, the new president of the Minneapolis Federal Reserve Bank. But Wall Street's biggest concern may be that the Fed will stop raising short-term interest rates if the U.S. economy slows further. Higher rates were expected to boost profits at Wells and other banks in 2016 because rates on loans typically rise faster than the rates banks pay depositors. As it is, Wells's earnings growth is expected to be meager this year. Analysts on average estimate earnings of $4.12 per share, down three cents from 2015.

Still, none of that is likely to change Buffett's long-term view of Wells, which he considers one of the world's best-managed big banks. When he says his favorite holding period for an investment is "forever," he's almost certainly thinking about Wells. Investors who want to tag along at this point get a stock selling for a modest 12 times estimated 2016 earnings (compared with 18 for Standard & Poor’s 500-stock index) and delivering a 3.0% dividend yield (compared with 2.1% for the S&P).

• Share price: $87.98
• 52-week low/high: $69.79 – $94.12
• Market capitalization: $46.3 billion
• Price-earnings ratio: 15
• Dividend yield: 2.5%
• Ownership status: Berkshire already owns it

At a time when many investors worldwide are focused on whether crude oil prices have finally bottomed, Buffett’s hefty purchases of Phillips 66 (PSX) shares recently were bound to grab headlines. Berkshire has reported buying 14 million shares of the oil refiner since January 1, adding to the huge stake it took last year. Berkshire now controls 14.3% of Phillips, worth $6.4 billion. But investors trying to read a message about oil's next move in Buffett's latest Phillips purchases should recall what he said last year about his initial stake. He told CNBC in September that "we're not buying it as a refiner and we're certainly not buying it as an integrated oil company. We're buying it because we like the company and we like the management very much." That's classic Buffett: buying a business for the brains behind the physical assets.

What Phillips investors get, though, is in fact a major oil refiner, operating 14 refining facilities. "But it's a company that is more than just a 'downstream' refiner," says David Kass, a finance professor at the University of Maryland-College Park who tracks Buffett and is a Berkshire shareholder.

Phillips sees its future in its other businesses, which include natural gas purification, gas pipelines, and production of olefins, the building blocks of many plastics and fibers. While many energy firms fell deep into the red in 2015, Phillips earned $7.67 per share on revenue of $101 billion. In 2016, however, analysts on average expect profit to fall to $5.89 per share because lower prices for refined gasoline have caught up with the cheap prices Phillips pays for crude. At the stock’s current price, investors who want to join Buffett in Phillips would pay about the same price Berkshire has paid this year and would get a 2.5% dividend yield. If you think Buffett probably knows some good things about Phillips that you don't, this looks like a fairly low-risk way of hitching a ride with him.

• Share price: $82.60
• 52-week low/high: $70.16 - $98.23
• Market capitalization: $26.1 billion
• Price-earnings ratio: 20
• Dividend yield: 2.9%
• Ownership status: Berkshire already owns it
• SEE ALSO: The Next Great Dividend Stocks of the S&P 500

Berkshire Hathaway was a big buyer of farm machinery leader Deere (DE) in the fourth quarter of 2015, adding 5.8 million shares to a stake Buffett Co. have had since at least 2014. Berkshire now holds 22.9 million shares, or 7.2% of the company. But if Buffett liked the stock last quarter, he should have loved it by mid January, when the price hit a 3 1/2-year low of $70.16.

The shares have tumbled 16% from their 52-week high as Deere’s outlook has worsened because of weak crop prices. As farmers earn less from important crops such as corn and wheat, their income dives—and with it, their ability to buy new tractors, harvesters and other equipment. Deere reported earnings of 80 cents per share for the quarter that ended January 31, a drop of 28% from the same period a year earlier. Sales slid 13%, to $5.5 billion. Worse, the company projected a 10% decline in sales for its full fiscal year, which ends next October, a grimmer forecast than Wall Street had expected. Even so, Deere still thinks it can earn about $4 per share in the fiscal year. That may be key to keeping Buffett aboard for an eventual rebound. Helped by cost cutting, Deere's results are "much better than we have experienced in previous downturns," CEO Samuel Allen told investors in the report on November-January results.

Deere also boasts another attribute that Buffett cherishes: The company has been disciplined about returning capital to shareholders, including via stock buybacks, which have shrunk total shares outstanding by 29% over the past 10 years. Research firm Morningstar, which grades companies for their stewardship of investors' capital, rates Deere as "exemplary"—a grade given to just 12% of the companies that Morningstar tracks.

• Share price: $29.84
• 52-week low/high: $20.67 - $36.50
• Market capitalization: $7.1 billion
• Price-earnings ratio: 24
• Dividend yield: 0%
• Ownership status: Berkshire already owns it

One of Buffett's cardinal investing rules is to avoid an industry’s weak players. He wants strong franchises that lead rather than follow. That's what Axalta Coating Systems (AXTA) brings to Buffett's table. The 150-year-old company, once part of DuPont (DD, $65.97), has about 25% of the global market for paint and other coatings used in auto repair and refinishing, outselling such rivals as PPG Industries (PPG, $113.19) and BASF (BASFY, $79.92). Berkshire initially bought 20 million Axalta shares from controlling investor Carlyle Group in April 2015, and it has added more since, including 124,000 shares in the fourth quarter, bringing its stake to 9.8%.

So far this year, Axalta's shares have slid with the rest of the market. They fell as low as $20.67 in February, down from a peak of $36.50 last summer. The stock has rebounded somewhat since the company reported fourth-quarter results. Excluding the depressing effect of the U.S. dollar's strength against other currencies, Axalta's global sales rose 4.5% in the fourth quarter, to $1 billion. The company earned 16 cents per share, compared with a loss of one cent per share a year earlier.

One issue facing Axalta is the need to reduce heavy debt taken on in its split from DuPont. That debt obviously didn't deter Berkshire from investing in the firm, but it limits Axalta's near-term earnings power. Over the longer term, a key question is whether self-driving cars will reduce accidents and therefore demand for auto-body repairs. The minds at Berkshire, of course, know all this — and still chose to become a major Axalta shareholder, adding it to a stable of auto-related investments that includes lubricants firm Lubrizol (a fully owned Berkshire subsidiary), a 6.2% stake in brake manufacturer Wabco Holdings (WBC, $113.50), a 3.3% stake in General Motors (GM, $32.18) and total ownership of the ubiquitous Geico insurance business.

• Share price: $49.41
• 52-week low/high: $36.21 - $55.95
• Market capitalization: $14.5 billion
• Price-earnings ratio: 14
• Dividend yield: 5.2%
• Ownership status: Berkshire should buy it
• SEE ALSO: 7 Energy Stocks to Buy While Oil Prices Are Cheap

As energy prices plunged from the middle of 2014 into early 2016, it was inevitable that investors would start dumping anything tied to the industry—even stocks of companies that had little exposure to oil and gas prices. One such victim was Spectra Energy Partners (SEP), a master limited partnership that owns major natural gas pipelines and storage facilities in the East and the South. MLPs are set up to pay their owners whatever cash flow the business doesn't need for debt service or capital spending. Spectra's shares, or units, slid from $60.07 in 2014 to a low of $36.21 last year, even though most of Spectra's revenue comes from set fees paid by gas customers under long-term contracts. The units have since rebounded as more investors have caught on, but the company still pays a hefty yield of 5.42% based on the current annualized distribution of $2.555 per unit. What's more, brokerage RBC Capital projects that Spectra's distributions will jump 8.1% this year and 7.5% in 2017. For Buffett, who appreciates rising dividends, Spectra would seem to be an alluring prospect.

Yet instead of buying battered energy MLPs, Buffett's Berkshire Hathaway went another route: It snapped up 26 million shares of Kinder Morgan (KMI, $18.12) last quarter. The attraction? Kinder is the largest U.S. energy infrastructure firm, with pipelines and other facilities nationwide. But it isn't an MLP. When Kinder's stock crashed last year on worries about high debt levels, the firm bit the bullet and slashed its dividend by 75% in December, aiming to use the savings to pay down debt.

Why would Berkshire move in? Perhaps because it's easy to believe that the worst is over for Kinder, and buyers now are getting premier energy assets in the U.S. at a deeply depressed price. Also, MLPs can complicate your tax return (don't buy one without consulting your tax adviser), but Kinder avoids that. Kinder’s current yield of 6.9% is above Spectra's and may make more sense than Spectra for investors who believe Berkshire has flagged a great long-term bargain.

• Share price: $205.99
• 52-week low/high: $176.63 - $308.78
• Market capitalization: $12.2 billion
• Price-earnings ratio: 12
• Dividend yield: 0%
• Ownership status: Berkshire should buy it

One of Buffett's classic bits of investment advice is to "be greedy when others are fearful." Some Wall Street analysts believe that shares of Alliance Data Systems (ADS) have been wrongly trashed by fearful investors. Alliance, which had $6.4 billion in revenues last year, operates mainly in two businesses. One is managing private-label credit cards, such as those offered by major retailers. The other is providing data-driven marketing services—mainly, tracking consumers' purchases to help merchants target their marketing to keep customers coming back. As worries about the weak global economy have deepened lately, financial stocks have been hit hard because of fears that loan losses could surge, including on credit cards. Alliance's shares crashed from a high of $312 in 2015 to a low of $176.63 in February, before rebounding a bit recently.

Ramsey El-Assal, an analyst at brokerage Jefferies, says the stock's plunge is "baking in severe credit losses" that are unlikely to materialize. As soon as that scare abates, he said, the stock should recover as investors focus on the "resurgence" of private-label credit cards that Alliance is riding, and on merchants' rising demand for the firm's data-based marketing programs. Based on analysts’ average estimates, Alliance in 2016 is expected to post “core” earnings of $16.81 per share this year, up 12% from 2015. Core earnings adds back certain noncash expenses. Using that measure, the stock's 2016 price-earnings ratio is a modest 12.

If Alliance's card business is as strong as analysts believe, that could impress Buffett, who knows something about the industry: Berkshire owns a 15.3% stake in American Express (AXP, $65.93) and small stakes in card processors MasterCard (MA, $97.45) and Visa (V, $79.11). But what might impress Buffett most is Alliance's track record of returning cash to investors. Via buybacks, Alliance has shrunk the number of shares outstanding by 24% over the past 10 years.

• Share price: $48.57
• 52-week low/high: $36.36 - $60.67
• Market capitalization: $8.9 billion
• Price-earnings ratio: 12
• Dividend yield: 2.9%
• Ownership status: Berkshire should buy it
• SEE ALSO: 9 Great Dividend Stocks for 2016

Buffett doesn't own shares in the legendary U.S. motorcycle manufacturer, but for years some analysts have repeatedly raised the question: Why not? That talk may have begun in the aftermath of the 2008 financial crash, when Buffett stepped in to help Harley-Davidson (HOG) survive — for a price. Harley needed a loan so it could keep offering financing to its customers. Berkshire agreed to a $300 million, five-year credit deal. The interest rate: a steep 15%. Buffett might wish he had bought some Harley stock, too. The shares briefly fell below $10 in 2009, then went screaming higher through 2013, peaking at $74.13 in 2014.

Since then, however, the stock has been cut in half as sales and earnings have stagnated. The dollar's strength since the spring of 2014 has given foreign cycle makers a leg up in the competition. And some analysts worry that Harley hasn't done enough to court younger customers, as its core fan group of aging males gets, well, more aged. "Now is the time for us to dial things up," CEO Matt Levatich told investors in October. That dial-up includes a sharp rise in marketing and revved-up spending on new bike models. Wall Street analysts on average see sales of $5.4 billion in 2016 and profit of $3.99 per share, up 8% from last year's depressed results.

Like Coke, Deere and See’s Candies, Harley is the kind of iconic brand that Buffett loves to own, says Berkshire-watcher Kass. Brokerage Robert W. Baird & Co. says that Harley checks another one of Buffett's favorite boxes: The firm is committed to returning capital to shareholders through stock buybacks and dividends. With the March payment, the dividend rate rises 13%. Finally, there's this interesting side note: Berkshire last year bought Detlev Louis Motorrad-Vertriebs, a major German retailer of clothing … for bikers.

• Share price: $88.27
• 52-week low/high: $66.20 - $146.99
• Market capitalization: $6.3 billion
• Price-earnings ratio: 13
• Dividend yield: 1.6%
• Ownership status: Berkshire should buy it
• SEE ALSO: 3 Things You Didn't Know About Warren Buffett

The sound-system giant has a number of key attributes that might attract maestro Buffett. Harman International (HAR) owns a number of well-known brands, including Harman Kardon, JBL and Infinity. But its largest business now is technology systems for the "connected car." That means one platform that integrates high-quality sound, the Internet, safety features, cybersecurity and navigation aids. CEO Dinesh Paliwal expects to double Harman's annual sales, which were $6.2 billion in the fiscal year that ended last June, over the next five years as cars get loaded with more tech. But some investors have gotten cold feet, fearful that despite Harman's relationships with major automakers, it might lose the connected-car race to much bigger players, such as Apple (AAPL, $105.68). As a result, Harman stock has lost more than 40% over the past year

Harman's fans say the drop is a gift to bargain hunters. Analysts on average estimate that Harman will earn $6.46 per share in the fiscal year that ends this June, which would be a 13% gain from fiscal 2015. The stock sells at a modest 13 times estimated-year ahead earnings.

Brokerage William Blair says that mid-priced cars now are the biggest source of orders for Harman's systems, indicating that demand has broadened beyond the luxury-car niche. Brokerage Barclays calls Harman "the best pure-play option to capitalize on growth in infotainment." Why might that appeal to Berkshire? Harman is at the crossroads of two industries Berkshire has favored. One is autos (see Axalta Coating Systems). The other is entertainment. Berkshire has stakes in content providers including Liberty Media (LMCA, $18.72), Twenty-First Century Fox (FOXA, $30.93) and Media General (MEG, $17.26). Harman would be an interesting complement to those lineups.

Owning a home free and clear is an impressive financial milestone. You’ll want to take steps to make sure your final payment is credited quickly and the mortgage lien is cleared from your title so you can sell your home when you want without extra hassles. Plus, your homeowners insurance and property taxes will no longer be paid from an escrow account, so the bills will be your responsibility.

About 30 to 60 days before you expect to make your last payment, ask for a payoff quote from your lender or loan servicer (look for contact information on your monthly statement). Consumers often miss this opportunity to simplify the payoff process, says Bill Pinkerton, a senior vice president at Wells Fargo Home Mortgage. Because you pay your mortgage in arrears, you could owe more than you think: This month’s payment covers last month’s principal and interest, and the tab for interest grows daily while the loan remains open. Or you could owe less than you expect if you occasionally prepaid principal.

The loan servicer generally must deliver a payoff quote within seven days of your request. Your servicer will set an expiration date for the quote, after which interest will again accrue. In addition to the final month’s principal and interest, you’ll pay a fee (usually $25 to $50) to file a request with your county’s real estate recording office to release the mortgage lien from your title. You could also owe a prepayment penalty if required by your loan terms, plus any unpaid late fees. For the final payment, your servicer may require a wire transfer from your bank account (which will cost about $15 to $20) or a cashier’s check ($7 to $10).

In most states, the servicer must file a release request with the county recorder within 30 days of payoff. Servicers sometimes fail to meet the deadline, says Paula E. Meyer, a real estate lawyer in Orange County, Calif. In such cases, she sends a demand letter to the servicer by certified mail, which, depending on the state, may trigger a penalty against the servicer.

Do-it-yourself escrow payments. If the servicer paid your bills for property taxes and homeowners, flood and windstorm insurance from an escrow account, it must send you a refund check for any remaining balance within 20 days of payoff and close the account. Call your insurers and tax department to make sure you’ll receive the bills in the future, and confirm the due dates. Consider setting up automatic payments from your checking or credit card account.

Even if you’ve received a confirmation letter from your servicer and your account shows a zero balance, you won’t hold clear title to your home until the county has recorded the release request, which could take a week to a couple of months. It’s a done deal when you receive a copy of the release showing the recording date and the county’s identifying document number. Either the loan servicer or the county will mail it, or you may have to pick it up from the recorder’s office.

Your insurance policy or policies list your loan servicer as an “additional insured” to protect its interest in your home; ask the insurers to remove the servicer’s name. Before they do, they’ll probably ask you for copies of the recorded release request and your deed.

When you receive the original, now-canceled mortgage note, file it—or frame it. And give yourself a well-deserved pat on the back.

When Janelle Martin and her husband, James, recently received a check for $1,991.62 that appeared to be from Walmart, her jaw dropped. “That’s an awful lot of money to receive in the mail,” she says. But her excitement quickly faded to skepticism when she read the letter that accompanied the check.

The letter asked them to register the check they received online, then deposit it in their bank account and use some of the money to complete a mystery shopping assignment. Although there are legitimate mystery shopping opportunities, the Martins were seeing red flags. The check supposedly was issued by Wachovia, which was bought by Wells Fargo in 2008 and no longer offers accounts under the Wachovia name. And a little searching on the Internet by the Martins turned up complaints about similar checks and letters.

What seemed like a windfall actually was a scam.

Walmart’s corporate site has a mystery shopper scam fraud alert that contains an image of a letter similar to the one the Martins received. It asks consumers to help with the retailer’s mystery shopping efforts by depositing the check to purchase items that they can keep along with a certain dollar amount from the check. The letter then instructs the recipient to wire the balance of the check to an address outside the U.S.

Because the check is a fake, it bounces and consumers are accountable for the amount of the check plus any bank penalties that might be charged, according to the Walmart fraud alert. Or, in some cases, consumers are asked for their bank account information so their secret shopper payment can be deposited into their account. Those who comply become victims of identity theft or have their accounts drained, according to the fraud alert.

“We would never have fallen for this,” Janelle Martin says. But she discovered that others have after she posted an image of the letter and check on Facebook with a message warning people about the scam. Several people sent her messages that they had become victims.

Although a check in the mail or an offer to earn money might seem like a blessing, consider these things before you respond:

A legitimate mystery shopping company will not send you a check prior to completing an assignment or ask you to cash a check and wire funds to someone else, according to the Mystery Shopping Providers Association. For legitimate money-making opportunities, see our 25 Ways to Earn Extra Cash and 10 Great Work-at-Home Jobs slide shows.

Walmart does not use mystery shopping services or mail checks to consumers asking them to make purchases and keep the remainder of the check as payment for services, according to the corporate Walmart site.

Don’t respond to unsolicited e-mails asking you to be a mystery shopper or click on any links within the e-mail, which could lead you to a fraudulent Web site or download malware onto your computer.

If you do receive an e-mail claiming to be from Walmart, forward it to OnlineAbuse@walmart.com. If you suspect that you’re a victim of a scam, file a report with your local law enforcement. Identity theft victims also should file a report with Federal Trade Commission. For more tips on avoiding scams and what to do if you become a victim, see our scams special report.