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  • This dividend-stock ETF has a 12% yield and is beating the S&P 500 by a substantial amount

    This dividend-stock ETF has a 12% yield and is beating the S&P 500 by a substantial amount

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    Most investors want to keep things simple, but digging a bit into details can be lucrative — it can help you match your choices to your objectives.

    The JPMorgan Equity Premium Income ETF
    JEPI,
    +0.20%
    has been able to take advantage of rising volatility in the stock market to beat the total return of its benchmark, the S&P 500
    SPX,
    +1.19%    ,
    while providing a rising stream of monthly income.

    The objective of the fund is “to deliver a significant portion of the returns associated with the S&P 500 Index with less volatility,” while paying monthly dividends, according to JPMorgan Asset Management. It does this by maintaining a portfolio of about 100 stocks selected for high quality, value and low price volatility, while also employing a covered-call strategy (described below) to increase income.

    This strategy might underperform the index during a bull market, but it is designed to be less volatile while providing high monthly dividends. This might make it easier for you to remain invested through the type of downturn we saw last year.

    JEPI was launched on May 20, 2020, and has grown quickly to $18.7 billion in assets under management. Hamilton Reiner, who co-manages the fund with Raffaele Zingone, described the fund’s strategy, and its success during the 2022 bear market and shared thoughts on what may lie ahead.

    Outperformance with a smoother ride

    First, here’s a chart showing how the fund has performed from when it was established through Jan. 20, against the SPDR S&P 500 ETF Trust
    SPY,
    +1.20%    ,
    both with dividends reinvested:

    JEPI has been less volatile than SPY, which tracks the S&P 500.


    FactSet

    Total returns for the two funds since May 2020 pretty much match, however, JEPI has been far less volatile than SPY and the S&P 500. Now take a look at a performance comparison for the period of rising interest rates since the end of 2021:

    Rising stock-price volatility during 2022 helped JEPI earn more income through its covered call option strategy.


    FactSet

    Those total returns are after annualized expenses of 0.35% of assets under management for JEPI and 0.09% for SPY. Both funds have had negative returns since the end of 2021, but JEPI has been a much better performer.

    ““Income is the outcome.””


    — Hamilton Reiner

    The income component

    Which investors JEPI is designed for? “Income is the outcome,” Reiner responded. “We are seeing a lot of people using this as an anchor tenant for income-oriented portfolios.”

    The fund quotes a 30-day SEC yield of 11.77%. There are various ways to look at dividend yields for mutual funds or exchange-traded funds and the 30-day yield is meant to be used for comparison. It is based on a fund’s current income distribution profile relative to its price, but the income distributions that investors actually receive will vary.

    It turns out that over the past 12 months, JEPI’s monthly distributions have ranged between 38 cents a share and 62 cents a share, with a rising trend over the past six months. The sum of the past 12 distributions has been $5.79 a share, for a distribution yield of 10.53%, based on the ETF’s closing price of $55.01 on Jan. 20.

    JEPI invests at least 80% of assets in stocks, mainly selected from those in the S&P 500, while also investing in equity-linked notes to employ a covered call option strategy which enhances income and lowers volatility. Covered calls are described below.

    Reiner said that during a typical year, investors in JEPI should expect monthly distributions to come to an annualized yield in the “high single digits.”

    He expects that level of income even if we return to the low-interest rate environment that preceded the Federal Reserve’s cycle of rate increases that it started early last year to push down inflation.

    JEPI’s approach may be attractive to investors who don’t need the income now. “We also see people using it as a conservative equity approach,” Reiner expects the fund to have 35% less price volatility than the S&P 500.

    Getting back to income, Reiner said JEPI was a good alternative even for investors who were willing to take credit risk with high-yield bond funds. Those have higher price volatility than investment-grade bond funds and face a higher risk of losses when bonds default. “But with JEPI you don’t have credit risk or duration risk,” he said.

    An example of a high-yield bond fund is the iShares 0-5 Year High Yield Corporate Bond ETF
    SHYG,
    -0.10%    .
    It has a 30-day yield of 7.95%.

    When discussing JEPI’s stock selection, Reiner said “there is a significant active component to the 90 to 120 names we invest in.” Stock selections are based on recommendations of JPM’s analyst team for those that are “most attractively priced today for the medium to long term,” he said.

    Individual stock selections don’t factor in dividend yields.

    Covered call strategies and an example of a covered-call trade

    JEPI’s high income is an important part of its low-volatility total-return strategy.

    A call option is a contract that allows an investor to buy a security at a particular price (called the strike price) until the option expires. A put option is the opposite, allowing the purchaser to sell a security at a specified price until the option expires.

    A covered call option is one an investor can write when they already own a security. The strike price is “out of the money,” which means it is higher than the stock’s current price.

    Here’s an example of a covered call option provided by Ken Roberts, an investment adviser with Four Star Wealth Management in Reno, Nev.

    • You bought shares of 3M Co.
      MMM,
      +1.63%
      on Jan. 20 for $118.75.

    • You sold a $130 call option with an expiration date of Jan. 19, 2024.

    • The premium for the Jan. 24, $130 call was $7.60 at the time that MMM was selling for $118.75.

    • The current dividend yield for MMM is 5.03%.

    • “So the maximum gain for this trade before the dividend is $18.85 or 15.87%. Add the divided income and you’ll get 20.90% maximum return,” Roberts wrote in an email exchange on Jan. 20.

    If you had made this trade and 3M’s shares didn’t rise above $130 by Jan. 19, 2024, the option would expire and you would be free to write another option. The option alone would provide income equivalent to 6.40% of the Jan. 20 purchase price in the period of a year.

    If the stock rose above $130 and the option were exercised, you would have ended up with the maximum gain as described by Roberts. Then you would need to find another stock to invest in. What did you risk? Further upside beyond $130. So you would have written the option only if you had decided you would be willing to part with your shares of MMM for $130.

    The bottom line is that the call option strategy lowers volatility with no additional downside risk. The risk is to the upside. If 3M’s shares had doubled in price before the option expired, you would still wind up selling them for $130.

    JEPI pursues the covered call options strategy by purchasing equity-linked notes (ELNs) which “combine equity exposure with call options,” Reiner said. The fund invests in ELNs rather than writing its own options, because “unfortunately option premium income is not considered bona fide income. It is considered a gain or a return of capital,” he said.

    In other words, the fund’s distributions can be better reflected in its 30-day yield, because option income probably wouldn’t be included.

    One obvious question for a fund manager whose portfolio has increased quickly to almost $19 billion is whether or not the fund’s size might make it difficult to manage. Some smaller funds pursuing narrow strategies have been forced to close themselves to new investors. Reiner said JEPI’s 2% weighting limitation for its portfolio of about 100 stocks mitigates size concerns. He also said that “S&P 500 index options are the most liquid equity products in the world,” with over $1 trillion in daily trades.

    Summing up the 2022 action, Reiner said “investing is about balance.” The rising level of price volatility increased options premiums. But to further protect investors, he and JEPI co-manager Raffaele Zingone also “gave them more potential upside by selling calls that were a bit further out of the money.”

    Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders

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  • 10 simple investments that can turn your portfolio into an income dynamo

    10 simple investments that can turn your portfolio into an income dynamo

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    Many people are good at saving up money for retirement. They manage expenses and build up their nest eggs steadily. But when it comes time to begin drawing income from an investment portfolio, they might feel overwhelmed with so many choices.

    Some income-seeking investors might want to dig deeply into individual bonds or dividend stocks. But others will want to keep things simple. One of the easiest ways to begin switching to an income focus is to use exchange-traded funds. Below are examples of income-oriented exchange-traded funds (ETFs) with related definitions further down.

    First, the inverse relationship

    Before looking at income-producing ETFs, there is one concept we will have to get out of the way — the relationship between interest rates and bond prices.

    Stocks represent ownership units in companies. Bonds are debt instruments. A government, company or other entity borrows money from investors and issues bonds that mature on a certain date, when the issuer redeems them for the face amount. Most bonds issued in the U.S. have fixed interest rates and pay interest every six months.

    Investors can sell their bonds to other investors at any time. But if interest rates in the market have changed, the market value of the bonds will move in the opposite direction. Last year, when interest rates rose, the value of bonds declined, so that their yields would match the interest rates of newly issued bonds of the same credit quality.

    It was difficult to watch bond values decline last year, but investors who didn’t sell their bonds continued to receive their interest. The same could be said for stocks. The benchmark S&P 500
    SPX,
    -0.20%
    fell 19.4% during 2022, with 72% of its stocks declining. But few companies cut dividends, just as few companies defaulted on their bond payments.

    One retired couple that I know saw their income-oriented brokerage account value decline by about 20% last year, but their investment income increased — not only did the dividend income continue to flow, they were able to invest a bit more because their income exceeded their expenses. They “bought more income.”

    The longer the maturity of a bond, the greater its price volatility. Depending on the economic environment, you might find that a shorter-term bond portfolio offers a “sweet spot” factoring in price volatility and income.

    And here’s a silver lining — if you are thinking of switching your portfolio to an income orientation now, the decline in bond prices means yields are much more attractive than they were a year ago. The same can be said for many stocks’ dividend yields.

    Downside protection

    What lies ahead for interest rates? With the Federal Reserve continuing its efforts to fight inflation, interest rates may continue to rise through 2023. This can put more pressure on bond and stock prices.

    Ken Roberts, an investment adviser with Four Star Wealth Management in Reno, Nev., emphasizes the “downside protection” provided by dividend income in his discussions with clients.

    “Diversification is the best risk-management tool there is,” he said during an interview. He also advised novice investors — even those seeking income rather than growth — to consider total returns, which combine the income and price appreciation over the long term.

    An ETF that holds bonds is designed to provide income in a steady stream. Some pay dividends quarterly and some pay monthly. An ETF that holds dividend-paying stocks is also an income vehicle; it may pay dividends that are lower than bond-fund payouts and it will also take greater risk of stock-market price fluctuation. But investors taking this approach are hoping for higher total returns over the long term as the stock market rises.

    “With an ETF, your funds are diversified. And when the market goes through periods of volatility, you continue to enjoy the income, even if your principal balance declines temporarily,” Roberts said.

    If you sell your investments into a declining market, you know you will lose money — that is, you will sell for less than your investments were worth previously. If you are enjoying a stream of income from your portfolio, it might be easier for you to wait through a down market. If we look back over the past 20 calendar years — arbitrary periods — the S&P 500 increased during 15 of those years. But its average annual price increase was 9.1% and its average annual total return, with dividends reinvested, was 9.8%, according to FactSet.

    Also see: When can I sell my I-bonds? Are I-bonds taxed? Answers to your questions about Series I bonds.

    In any given year, there can be tremendous price swings. For example, during 2020, the early phase of the Covid-19 pandemic pushed the S&P 500 down 31% through March 23, but the index ended the year with a 16% gain.

    Two ETFs with broad approaches to dividend stocks

    Invesco Head of Factor and Core Strategies Nick Kalivas believes investors should “explore higher-yielding stocks as a way to generate income and hedge against inflation.”

    He cautioned during an interview that selecting a stock based only on a high dividend yield could place an investor in “a dividend trap.” That is, a high yield might indicate that professional investors in the stock market believe a company might be forced to cut its dividend. The stock price has probably already declined, to send the dividend yield down further. And if the company cuts the dividend, the shares will probably fall even further.

    Here are two ways Invesco filters broad groups of stocks to those with higher yields and some degree of safety:

    • The Invesco S&P 500 High Dividend Low Volatility ETF
      SPHD,
      -0.33%
      holds shares of 50 companies with high dividend yields that have also shown low price volatility over the previous 12 months. The portfolio is weighted toward the highest-yielding stocks that meet the criteria, with limits on exposure to individual stocks or sectors. It is reconstituted twice a year in January and July. Its 30-day SEC yield is 4.92%.

    • The Invesco High Yield Equity Dividend Achievers ETF
      PEY,
      -0.70%
      follows a different screening approach for quality. It begins with the components of the Nasdaq Composite Index
      COMP,
      +1.39%      ,
      then narrows the list to 50 companies that have raised dividend payouts for at least 10 consecutive years, whose stocks have the highest dividend yields. It excludes real-estate investment trusts and is weighted toward higher-yielding stocks meeting the criteria. Its 30-day yield is 4.08%.

    The 30-day yields give you an idea of how much income to expect. Both of these ETFs pay monthly. Now see how they performed in 2022, compared with the S&P 500 and the Nasdaq, all with dividends reinvested:


    Both ETFs had positive returns during 2022, when rising interest rates pressured the broad indexes.

    8 more ETFs for income (and some for growth too)

    A mutual fund is a pooling of many investors’ money to pursue a particular goal or set of goals. You can buy or sell shares of most mutual funds once a day, at the market close. An ETF can be bought or sold at any time during stock-market trading hours. ETFs can have lower expenses than mutual funds, especially ETFs that are passively managed to track indexes.

    You should learn about the expenses before making a purchase. If you are working with an investment adviser, ask about fees — depending on the relationship between the adviser and a fund manager, you might get a discount on combined fees. You should also discuss volatility risk with your adviser, to establish a comfort level and to try to match your income investment choices to your risk tolerance.

    Here are eight more ETFs designed to provide income or a combination of income and growth:

    Company

    		 Ticker

    		 30-day SEC yield

    		 Concentration

    		 2022 total return
    iShares iBoxx $ Investment Grade Corporate Bond ETF

    		 LQD,
    -0.36%         		4.98%

    		 Corporate bonds with investment-grade ratings.

    		 -17.9%
    iShares iBoxx $ High Yield Corporate Bond ETF

    		 HYG,
    -0.34%         		7.96%

    		 Corporate bonds with lower credit ratings.

    		 -11.0%
    iShares 0-5 Year High Yield Corporate Bond ETF

    		 SHYG,
    -0.26%         		8.02%

    		 Similar to HYG but with shorter maturities for lower price volatility.

    		 -4.7%
    SPDR Nuveen Municipal Bond ETF

    		 MBND,
    +0.04%         		2.94%

    		 Investment-grade municipal bonds for income exempt from federal taxes.

    		 -8.6%
    GraniteShares HIPS US High Income ETF

    		 HIPS,
    +0.82%         		9.08%

    		 An aggressive equity income approach that includes REITs, business development companies and pipeline partnerships.

    		 -13.5%
    JPMorgan Equity Premium Income ETF

    		 JEPI,
    -0.25%         		11.77%

    		 A covered-call strategy with equity-linked notes for extra income.

    		 -3.5%
    Amplify CWP Enhanced Dividend Income ETF

    		 DIVO,
    -0.55%         		1.82%

    		 Bue chip dividend stocks with some covered-call writing to enhance income.

    		 -1.5%
    First Trust Institutional Preferred Securities & Income ETF

    		 FPEI,
    +0.05%         		5.62%

    		 Preferred stocks, mainly in the financial sector

    		 -8.2%
    Sources: Issuer websites (for 30-day yields), FactSet

    Click the tickers for more about each ETF.

    Read: Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Definitions

    The following definitions can help you gain a better understanding of how the ETFs listed above work:

    30-day SEC yield — A standardized calculation that factors in a fund’s income and expenses. For most funds, this yield gives a good indication of how much income a new investor can be expected to receive on an annualized basis. But the 30-day yields don’t always tell the whole story. For example, a covered-call ETF with a low 30-day yield may be making regular dividend distributions (quarterly or monthly) that are considerably higher, since the 30-day yield can exclude covered-call option income. See the issuer’s website for more information about any ETF that may be of interest.

    Taxable-equivalent yield — A taxable yield that would compare with interest earned from municipal bonds that are exempt from federal income taxes. Leaving state or local income taxes aside, you can calculate the taxable-equivalent yield by dividing your tax exempt yield by 1 less your highest graduated federal income tax bracket.

    Bond ratings — Grades for credit risk, as determined by ratings agencies. Bonds are generally considered Investment-grade if they are rated BBB- or higher by Standard & Poor’s and Fitch, and Baa3 or higher by Moody’s. Fidelity breaks down the credit agencies’ ratings hierarchy. Bonds with below-investment-grade ratings have higher risk of default and higher interest rates than investment-grade bonds. They are known as high-yield or “junk” bonds.

    Call option — A contract that allows an investor to buy a security at a particular price (called the strike price) until the option expires. A put option is the opposite, allowing the purchaser to sell a security at a specified price until the option expires.

    Covered call option — A call option an investor writes when they already own a security. The strategy is used by stock investors to increase income and provide some downside protection.

    Preferred stock — A stock issued with a stated dividend yield. This type of stock has preference in the event a company is liquidated. Unlike common shareholders, preferred shareholders don’t have voting rights.

    These articles dig deeper into the types of securities mentioned above and related definitions:

    Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders

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  • 18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

    18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

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    It may not have been a surprise to see the consumer discretionary sector of the S&P 500 get hammered last year amid talk of a looming recession while the Federal Reserve jacked up interest rates to push back against inflation.

    But the stock market always looks ahead. Following a decline of 19.4% for the S&P 500
    SPX,
    +0.42%
    in 2022 and a 37.6% drop for the benchmark index’s consumer discretionary sector, this may be the time to begin looking for bargains.

    And now, analysts at Jefferies have lifted the sector to a “bullish” rating.

    In a note to clients on Jan. 10, Jefferies’ global equity strategist, Sean Darby, wrote: “A Goldilocks scenario might be unfolding for the U.S. consumer — falling inflation but steady employment conditions.”

    He sees consumer confidence improving, in part because “households are still sitting on [about] $1.4 trillion of Covid savings.”

    Darby pointed to a list of 18 consumer discretionary stocks favored by Jefferies analysts that was published on Jan. 6. Those are listed below, along with three stocks in the sector the analysts rate “underperform.”

    The ratings of the Jefferies analysts for individual stocks is based on their 12-month outlooks for the companies, in keeping with Wall Street tradition.

    So we have added another list further down, showing which companies in the S&P 500 consumer discretionary sector are expected by analysts polled by FactSet to increase sales the most through 2024.

    The Jefferies 18

    Here are the 18 consumer discretionary stocks recommended by Jefferies analysts with “buy” ratings on Jan. 6, sorted by how much upside the firm sees for the shares from closing prices on Jan. 9:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Topgolf Callaway Brands Corp.

    		 MODG,
    -0.22%         		$20.76

    		 $56

    		 170%

    		 32.8%

    		 10.0%
    Bloomin’ Brands Inc.

    		 BLMN,
    +3.87%         		$22.08

    		 $35

    		 59%

    		 2.4%

    		 3.7%
    Coty Inc. Class A

    		 COTY,
    +1.23%         		$9.38

    		 $14

    		 49%

    		 -7.1%

    		 3.7%
    MGM Resorts International

    		 MGM,
    +1.71%         		$37.64

    		 $56

    		 49%

    		 -0.1%

    		 6.6%
    Chewy Inc. Class A

    		 CHWY,
    +1.63%         		$40.13

    		 $57

    		 42%

    		 28.0%

    		 10.6%
    Planet Fitness Inc. Class A

    		 PLNT,
    +0.69%         		$82.36

    		 $115

    		 40%

    		 10.4%

    		 13.9%
    Molson Coors Beverage Co. Class B

    		 TAP,
    +0.67%         		$50.21

    		 $69

    		 37%

    		 0.5%

    		 1.4%
    Fox Factory Holding Corp.

    		 FOXF,
    +3.95%         		$99.90

    		 $135

    		 35%

    		 28.1%

    		 6.6%
    Hasbro Inc.

    		 HAS,
    +0.99%         		$63.70

    		 $85

    		 33%

    		 9.1%

    		 3.6%
    Hostess Brands Inc. Class A

    		 TWNK,
    +0.33%         		$23.10

    		 $30

    		 30%

    		 14.2%

    		 5.0%
    Lowe’s Cos. Inc.

    		 LOW,
    +0.08%         		$199.44

    		 $250

    		 25%

    		 10.6%

    		 -1.9%
    Walmart Inc.

    		 WMT,
    -0.27%         		$144.95

    		 $175

    		 21%

    		 4.9%

    		 3.3%
    Dollar General Corp.

    		 DG,
    -0.26%         		$241.05

    		 $285

    		 18%

    		 10.9%

    		 6.7%
    Church & Dwight Co. Inc.

    		 CHD,
    -1.17%         		$82.25

    		 $97

    		 18%

    		 7.0%

    		 4.6%
    McDonald’s Corp.

    		 MCD,
    +0.39%         		$267.25

    		 $315

    		 18%

    		 2.4%

    		 4.0%
    Estee Lauder Cos. Inc. Class A

    		 EL,
    +0.39%         		$261.63

    		 $304

    		 16%

    		 2.8%

    		 5.8%
    Mondelez International Inc. Class A

    		 MDLZ,
    -0.04%         		$67.24

    		 $75

    		 12%

    		 6.3%

    		 4.1%
    Tapestry Inc.

    		 TPR,
    +0.73%         		$41.25

    		 $45

    		 9%

    		 3.3%

    		 3.2%
    Sources: Jefferies, FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    The two right-most columns on the table show estimated compound annual growth rates (CAGR) for the companies over the past three calendar years and expected sales CAGR for two years through calendar 2024, based on the companies’ financial reports and consensus estimates among analysts polled by FactSet.

    (We used calendar-year numbers, some of which are estimated by FactSet for prior years, because some companies have fiscal years or even months that don’t match the calendar.)

    The stock pick with the highest 12-month upside potential, based on Jefferies’ price target, is Topgolf Callaway Brands Corp.
    MODG,
    -0.22%    .
    This company has the highest estimated three-year sales CAGR on the list, and has the third-highest projected sales CAGR through 2024, after Planet Fitness Inc.
    PLNT,
    +0.69%
    and Chewy Inc.
    CHWY,
    +1.63%    .

    On Jan. 6, the Jefferies analysts also listed three stocks in the sector they rated “underperform.” Here they are, sorted by how much the analysts expect the stocks to decline over the next 12 months:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Lululemon Athletica Inc.

    		 LULU,
    +2.98%         		$298.66

    		 $200

    		 -33%

    		 26.3%

    		 14.6%
    Williams-Sonoma Inc.

    		 WSM,
    +1.75%         		$122.17

    		 $98

    		 -20%

    		 14.1%

    		 -0.3%
    Harley-Davidson Inc.

    		 HOG,
    +0.35%         		$43.25

    		 $39

    		 -10%

    		 -2.8%

    		 4.4%
    Sources: Jefferies, FactSet
    Screen of consumer discretionary sales growth

    A look head at which companies are expected to increase sales the most over the next two years might serve as a good starting point for your own research.

    Bear in mind that some of the companies in travel-related industries suffered declining sales for three years through 2022 because of the coronavirus pandemic. Some of those are on this new list of 20 stocks in the S&P 500 consumer discretionary sector expected to show the highest two-year sales CAGR through calendar 2024:

    Company

    		 Ticker

    		 Two-year estimated sales CAGR through 2024

    		 Three-year estimated sales CAGR through 2022

    		 Share “buy” ratings

    		 Jan. 9 price

    		 Consensus price target

    		 Implied 12-month upside potential
    Las Vegas Sands Corp.

    		 LVS,
    +1.59%         		59.2%

    		 -32.6%

    		 79%

    		 $52.78

    		 $53.53

    		 1%
    Norwegian Cruise Line Holdings Ltd.

    		 NCLH,
    +1.67%         		39.6%

    		 -9.3%

    		 44%

    		 $13.78

    		 $16.96

    		 23%
    Carnival Corp.

    		 CCL,
    +1.64%         		35.2%

    		 -14.7%

    		 30%

    		 $9.47

    		 $10.11

    		 7%
    Tesla Inc.

    		 TSLA,
    -1.83%         		34.3%

    		 49.7%

    		 64%

    		 $119.77

    		 $232.43

    		 94%
    Wynn Resorts Ltd.

    		 WYNN,
    +2.01%         		29.3%

    		 -17.5%

    		 53%

    		 $94.33

    		 $96.07

    		 2%
    Royal Caribbean Group

    		 RCL,
    +2.22%         		28.4%

    		 -6.8%

    		 53%

    		 $57.29

    		 $66.43

    		 16%
    Chipotle Mexican Grill Inc.

    		 CMG,
    -0.17%         		13.4%

    		 15.9%

    		 71%

    		 $1,446.74

    		 $1,778.81

    		 23%
    Amazon.com Inc.

    		 AMZN,
    +2.61%         		12.2%

    		 22.1%

    		 92%

    		 $87.36

    		 $133.76

    		 53%
    Booking Holdings Inc.

    		 BKNG,
    +0.37%         		11.9%

    		 3.9%

    		 63%

    		 $2,208.41

    		 $2,307.67

    		 4%
    Aptiv PLC

    		 APTV,
    +1.66%         		11.9%

    		 6.4%

    		 70%

    		 $97.98

    		 $117.23

    		 20%
    Starbucks Corp.

    		 SBUX,
    +1.28%         		11.2%

    		 7.2%

    		 42%

    		 $104.74

    		 $103.44

    		 -1%
    Etsy Inc.

    		 ETSY,
    +3.56%         		11.1%

    		 45.3%

    		 50%

    		 $120.99

    		 $124.04

    		 3%
    Hilton Worldwide Holdings Inc.

    		 HLT,
    +0.06%         		10.1%

    		 -2.9%

    		 38%

    		 $129.08

    		 $146.17

    		 13%
    Expedia Group Inc.

    		 EXPE,
    +0.39%         		9.0%

    		 -0.9%

    		 50%

    		 $93.77

    		 $125.65

    		 34%
    NIKE Inc. Class B

    		 NKE,
    +0.68%         		8.1%

    		 5.8%

    		 62%

    		 $124.85

    		 $126.15

    		 1%
    Marriott International Inc. Class A

    		 MAR,
    +0.47%         		7.5%

    		 -1.2%

    		 30%

    		 $152.53

    		 $172.81

    		 13%
    BorgWarner Inc.

    		 BWA,
    +1.82%         		7.1%

    		 15.3%

    		 53%

    		 $42.24

    		 $46.93

    		 11%
    Tractor Supply Co.

    		 TSCO,
    +1.06%         		6.8%

    		 19.0%

    		 61%

    		 $217.48

    		 $232.34

    		 7%
    Yum! Brands Inc.

    		 YUM,
    -0.76%         		6.7%

    		 6.4%

    		 47%

    		 $129.76

    		 $137.79

    		 6%
    Dollar General Corp.

    		 DG,
    -0.26%         		6.7%

    		 10.9%

    		 67%

    		 $241.05

    		 $267.54

    		 11%
    Source: FactSet

    Among the companies on this list that didn’t suffer sales declines from 2019 levels, Tesla Inc.
    TSLA,
    -1.83%
    is expected to achieve the highest two-year sales CAGR through 2022.

    Dollar General Corp.
    DG,
    -0.26%
    is the only company to appear on this list based on consensus sales growth estimates and the Jefferies recommended list.

    Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders

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  • The limit for 401(k) contributions will jump nearly 10% in 2023, but it’s not always a good idea to max out your retirement investments

    The limit for 401(k) contributions will jump nearly 10% in 2023, but it’s not always a good idea to max out your retirement investments

    [ad_1]

    The federal government will allow you to save nearly 10% more for retirement in 2023. But it’s not likely that many will take advantage of the tax break. The simple reason: Most people don’t make enough money to save more from their paychecks. 

    The average amount that participants contribute is 7.3% of their salary, according to Vanguard’s How America Saves 2022 report. At that rate, you’d have to make more than $300,000 to hit the $22,500 maximum amount an employee can save in a workplace plan for 2023, up from $20,500 in 2022. To put it another way, to save the max, you’d have to put aside $1,875 per month, or $865 per paycheck if you’re paid biweekly.

    Only 14% of participants saved the maximum amount in 2020. 

    Few people will also likely take advantage of the increase in the catch-up contribution limit, which will allow those 50 and older to contribute an extra $7,500, up by $1,000 from 2022, for a total of $30,000. Vanguard’s report found that only 16% of those eligible participate, even though 98% of plans allow for catch-up contributions. 

    “The max numbers are very high. A lot of people don’t make that kind of money,” says Anqi Chen, assistant director of savings research at the Center for Retirement Research at Boston College. 

    You might not need to max out

    Not everyone needs that kind of money put away for retirement. The key is to save over time to eventually be able to replace your current income in the future, supplemented by Social Security. If you’re making $60,000 now, it wouldn’t make sense to try to save more than a third of your yearly income just because the government says you can.

    “You don’t want to deprive yourself today or later on. You want to balance that over time, to be able to maintain the same standard of living in retirement,” says Chen. 

    The tried-and-true method to get people to contribute to retirement savings is a monetary incentive: matching funds. That “free money” on the table is at the base of every recommendation for how much workers should contribute. Give at least up to the match, everyone says. But almost all company retirement plans offer matching funds, and it hasn’t yet solved the retirement crisis facing most Americans who haven’t saved enough. 

    Trend in deferral rate changes

    Vanguard 2022

    If there’s a takeaway from the new IRS limits, it’s that pushing up the limits every year does help. Retirement contributions have been indexed for inflation since 2001 for good reason, because legislators recognized that the amount you need in the future is constantly going up.

    Ten years ago, the maximum for 401(k) contributions was $17,000 and going back 30 years to 1992, it was $8,728. In today’s dollars, that certainly wouldn’t be enough.

    At the same time, the government has to cap it somewhere to put a limit on tax deferral, so you can’t just shelter all your income from the IRS. 

    “These annual step-ups matter over time, because saving for retirement is a multidecade thing,” says David Stinnett, head of strategic retirement consulting for Vanguard.

    His advice for those who can’t max out, particularly younger workers, is to at least contribute up to the company match and then automatically escalate your savings rate over time to something in the rage of 12% to 15%. 

    It can be helpful to think of the amounts in dollar terms, rather than percentages.

    “By starting small and thinking of it as just ‘3 pennies per dollar’ earned and then adding ‘2 pennies per dollar’ each year going forward, you’ll get on track to those recommended savings rates in no time,” says Tom Armstrong, vice president of customer analytics and insight at Voya Financial.

    Escalating over time does seem to move the needle, according to Vanguard’s study, at least if you look at the rate of people coming to the table. The voluntary participation rate was only 66%, but the participation rate for automatic enrollment was 93%. 

    “What that does is make it easy to save more,” says Stinnett. 

    Related: This easy, free iPhone hack could be the most important estate planning move you make

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  • These 20 stocks were the biggest losers of 2022

    These 20 stocks were the biggest losers of 2022

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    This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.

    Below is a list of the 20 stocks in the S&P 500
    SPX,
    -0.72%
    that have declined the most in 2022.

    First, here’s how the 11 sectors of the benchmark index have performed this year:

    S&P 500 sector

    		 2022 price change

    		 Forward P/E

    		 Forward P/E as of Dec. 31, 2021
    Energy

    		 57.8%

    		 9.6

    		 11.1
    Utilities

    		 -0.5%

    		 18.8

    		 20.4
    Consumer Staples

    		 -2.7%

    		 20.9

    		 21.8
    Healthcare

    		 -3.2%

    		 17.4

    		 17.2
    Industrials

    		 -6.7%

    		 18.0

    		 20.8
    Financials

    		 -12.1%

    		 11.7

    		 14.6
    Materials

    		 -13.4%

    		 15.6

    		 16.6
    Real Estate

    		-27.7%

    		 16.2

    		 24.2
    Information Technology

    		 -28.8%

    		 19.6

    		 28.1
    Consumer Discretionary

    		 -37.4%

    		 20.7

    		 33.2
    Communication Services

    		 -40.4%

    		 14.0

    		 20.8
    S&P 500

    		 -19.2%

    		 16.5

    		 21.4
    Source: FactSet

    The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
    CL.1,
    +0.41%
    has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.

    Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
    TSLA,
    +0.70%
    and Amazon.com Inc.
    AMZN,
    -1.17%    ,
    which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
    META,
    -1.21%    ,
    along with Match Group Inc.
    MTCH,
    +0.50%    ,
    which is down 69% for 2022, and Netflix Inc.
    NFLX,
    -0.44%    ,
    which is down 52% this year.

    There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.

    You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
    SPX,
    -0.72%
    traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.

    Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.

    The worst-performing S&P 500 stocks of 2022

    Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.

    Company

    		 Ticker

    		 2022 price change

    		 Forward P/E

    		 Forward P/E as of Dec. 32, 2021
    Generac Holdings Inc.

    		 GNRC,
    -0.84%         		-71.4%

    		 13.7

    		 30.2
    Match Group Inc.

    		 MTCH,
    +0.50%         		-68.9%

    		 20.1

    		 48.5
    Align Technology Inc.

    		 ALGN,
    -0.52%         		-67.7%

    		 27.4

    		 48.7
    Tesla Inc.

    		 TSLA,
    +0.70%         		-65.4%

    		 21.7

    		 120.3
    SVB Financial Group

    		 SIVB,
    -0.38%         		-65.4%

    		 10.8

    		 23.0
    Catalent Inc.

    		 CTLT,
    -0.40%         		-64.6%

    		 13.0

    		 32.5
    Meta Platforms Inc. Class A

    		 META,
    -1.21%         		-64.2%

    		 14.7

    		 23.5
    Signature Bank

    		 SBNY,
    -0.34%         		-64.1%

    		 6.2

    		 18.6
    PayPal Holdings Inc.

    		 PYPL,
    -0.01%         		-62.6%

    		 14.8

    		 36.0
    V.F. Corp.

    		 VFC,
    +0.15%         		-62.5%

    		 11.9

    		 20.4
    Warner Bros. Discovery Inc. Series A

    		 WBD,
    -1.64%         		-59.9%

    		 N/A

    		 7.5
    Carnival Corp.

    		 CCL,
    -0.23%         		-59.8%

    		 38.1

    		 N/A
    Stanley Black & Decker Inc.

    		 SWK,
    -0.42%         		-59.8%

    		 17.0

    		 15.9
    Lumen Technologies Inc.

    		 LUMN,
    -1.79%         		-57.8%

    		 7.7

    		 7.8
    Zebra Technologies Corp. Class A

    		 ZBRA,
    -0.44%         		-56.7%

    		 14.5

    		 30.1
    Dish Network Corp. Class A

    		 DISH,
    -0.96%         		-56.5%

    		 8.6

    		 10.9
    Caesars Entertainment Inc.

    		 CZR,
    +0.24%         		-55.7%

    		 51.4

    		 144.5
    Lincoln National Corp.

    		 LNC,
    +0.26%         		-55.1%

    		 3.4

    		 6.2
    Advanced Micro Devices Inc.

    		 AMD,
    -0.97%         		-55.0%

    		 17.8

    		 43.1
    Seagate Technology Holdings PLC

    		 STX,
    -0.55%         		-53.1%

    		 15.0

    		 12.4
    Source: FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Another way of measuring the biggest stock-market losers of 2022

    It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.

    Shareholders of these companies have suffered the largest declines in market cap during 2022.

    Company

    		 Ticker

    		 2022 market capitalization change ($bil)

    		 2022 price change
    Apple Inc.

    		 AAPL,
    -0.63%         		-$851

    		 -27.0%
    Amazon.com Inc.

    		 AMZN,
    -1.17%         		-$832

    		 -49.5%
    Microsoft Corp.

    		 MSFT,
    -1.15%         		-$728

    		 -28.3%
    Tesla Inc.

    		 TSLA,
    +0.70%         		-$677

    		 -65.4%
    Meta Platforms Inc. Class A

    		 META,
    -1.21%         		-$465

    		 -64.2%
    Nvidia Corp.

    		 NVDA,
    -1.37%         		-$376

    		 -50.3%
    PayPal Holdings Inc.

    		 PYPL,
    -0.01%         		-$141

    		 -62.6%
    Netflix Inc.

    		 NFLX,
    -0.44%         		-$138

    		 -51.7%
    Walt Disney Co.

    		 DIS,
    -1.62%         		-$123

    		 -43.7%
    Salesforce Inc.

    		 CRM,
    -0.96%         		-$118

    		 -47.8%
    Source: FactSet

    So there is your surprise for today: Apple is this year’s biggest stock-market loser.

    Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

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  • Surprise! CDs are back in vogue with Treasurys and I-bonds as safe havens for your cash

    Surprise! CDs are back in vogue with Treasurys and I-bonds as safe havens for your cash

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    If there’s a silver lining to the current economic situation that features soaring inflation and falling stocks, it’s that savers can get more for their money.

    Even after just a few months of rising interest rates, you can find online savings accounts yielding more than 3%. But that might not be good enough anymore. 

    “Rather than being grateful for yield, that’s going to change quickly into turning your nose up at yield,” says Matt McKay, a certified financial planner and partner at Briaud Financial Advisors in College Station, Texas. 

    The Federal Reserve continued to raise rates through the end of 2022, and yields on savings products are now high enough that they look like a safe haven compared with a stock market that’s in the red this year.

    And that means certificates of deposits, or CDs, are back in the conversation — even if that comes with caveats.

    Advisers still favor Treasury bills and notes and Series I savings bonds for getting the best combination of low risk and high yield, but some are looking more seriously at CDs now. And for the everyday investor doing it on their own, CDs offer an additional boost beyond a savings account without much effort. 

    “It’s good for anyone if they have cash sitting around, if you can pick up something — CDs, T-bills, whatever — it’s good to get something,” says McKay. 

    Remember CDs? 

    If you’re under 50, you might never have invested in a CD and have no memory of how investors used to build ladders of different maturities as a cornerstone of their portfolio. 

    “With younger clients, nobody ever talks about CDs — never, never, never,” says Dennis Nolte, a certified financial planner and financial consultant at Seacoast Investment Services in Orlando, Fla.  

    For some, however, CDs never went out of style. These promissory notes from banks, which have been around in the U.S. since the 1800s, come in maturities generally from three months to five years, in exchange for interest at maturity.

    You’re locked into the time period or face surrender charges that vary, unless you choose a more flexible, lower-interest option. The laddering strategy consists of buying CDs at different maturities and then reinvesting as they each come due. 

    Over the past few years, CDs haven’t been worth it for most savers, who could get as much from a high-yield savings account without restrictions. The average five-year CD would have nabbed you nearly 12% in 1984, but now the average five-year rate is just 0.74%, according to Bankrate.com. Back in 1984, CDs were nearly 50% of deposits at FDIC-insured banks, with $1.24 trillion held in the first quarter of that year. In 2022, there’s nearly the same dollar amount, which amounts to just 6.3% of deposits.

    With rates rising, you can find better-than-average deals, closing in on 4% at some banks or brokerages. Many have a $1,000 minimum purchase, but you can find fractional offers for as little as $100. 

    CDs versus Treasurys and I-bonds

    Treasury bills and notes come in roughly the same maturities as CDs, and are yielding slightly more currently. They also have no state tax burden on gains. 

    You can buy directly at TreasuryDirect.gov, with a $100 minimum, but to sell, you have to transfer holdings to a brokerage. Or you can buy and sell through a brokerage, but your minimums may be $1,000. 

    For I-bonds, you can only buy directly at TreasuryDirect.gov, with a minimum of $25 and a maximum of $10,000 per person a year, with gifts allowed to others up to $10,000 per recipient. I-bonds are indexed for inflation, with rates that reset every six months, and today are yielding 6.89% through April 2023. The biggest caveat is that you are locked into one year, and then face a surrender penalty of three months of interest if you cash out before five years. 

    A strategy for today’s rising rates

    If you are chasing yield and have money you don’t need for a year, then I-bonds are the place for the first $10,000.

    “It makes sense to max out I-bonds before investing in CDs,” says Ken Tumin, founder of DepositAcccounts.com. 

    Just make sure you’re motivated enough to navigate a still-wonky website and keep track of the investment on your own, because it won’t align with any of your other accounts. McKay had a client who was eager to jump into I-bonds, and he was mad at first that McKay hadn’t recommended it. “But then he called to complain, saying this is terrible, it’s so difficult,” he says. 

    If you have funds beyond that for savings, consider Treasury bills or notes because the rates are higher, says Tumin. Then consider CDs. That’s what Nolte is doing with some clients, particularly older ones who have past experience with them.

    “Why not get something guaranteed? It’s maybe not keeping pace with inflation, but you’re not losing principal,” says Nolte. 

    CD rates move more slowly than other products, so even after the next rate hike, this strategy would still apply. But already Tumin sees investors ready to lock into long-term CDs, anticipating a recession and a drop in interest rates. If rates subsequently fall, and CDs lag, they would eventually end up with a price advantage over Treasury investments. Then people like McKay will be advising clients to buy in earnest.

    “That’s when CDs become most attractive — as soon as rates peak or there are cuts [in rates],” says McKay.

    Got a question about the mechanics of investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write me at beth.pinsker@marketwatch.com. 

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  • These 20 energy stocks are worth a look if you think oil prices will soar in 2023

    These 20 energy stocks are worth a look if you think oil prices will soar in 2023

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    Harris Kupperman, the president of Praetorian Capital, made a couple of interesting calls heading into 2022. He predicted that stocks of the giant tech-oriented companies that led the bull market would be sold off, and that oil prices would continue to rise through the end of 2022.

    The first prediction came true, while the second one for oil prices fizzled. After rising to $130 in March, oil prices have fallen back to where they started the year. Then again, that second prediction still could have made you a lot of money because the share prices of oil companies kept rising anyway.

    That leads to a new prediction for 2023 and a related stock screen below.

    Here’s a chart showing the movement of front-month contract prices for West Texas Intermediate (WTI) crude oil
    CL.1,
    -0.62%
    since the end of 2021:


    FactSet

    Even though Kupperman didn’t get his oil price call right, the energy sector of the S&P 500
    SPX,
    -1.20%
    was up 60% for 2022 through Dec. 27, excluding dividends. That is the only one of the 11 S&P 500 sectors to show a gain in 2022. And the energy sector is also cheapest relative to earnings expectations, with a forward price-to-earnings ratio of 9.8, compared with 16.7 for the full S&P 500.

    WTI pulled back from its momentary peak at $130.50 in early March, but that didn’t reverse the long-term trend of low capital spending by oil and natural gas producers, which has given investors confidence that supplies will remain tight.

    Vicki Hollub, the CEO of Occidental Petroleum Corp.
    OXY,
    -3.50%
    — the best-performing S&P 500 stock of 2022 — said during a recent interview that there was “no pressure to increase production right now,” citing a $40 per barrel break-even point for oil prices.

    Kupperman now expects strong demand and low supplies to push oil as high as $200 a barrel in 2023.

    At the end of November, these 20 oil companies stood out as reasonable plays for 2023 based on expectations for free-cash-flow generation and dividend payments.

    For this next screen, we are only looking at ratings and consensus price targets among analysts polled by FactSet.

    There are 23 energy stocks in the S&P 500, and you can invest in that group easily by purchasing shares of the Energy Select SPDR ETF
    XLE,
    -2.24%    .
    We can expand the list of large-cap names by looking at the components of the iShares Global Energy ETF
    IXC,
    -1.91%    ,
    which holds all the energy stocks in the S&P 500 plus large players based outside the U.S.

    The top five holdings of IXC are:

    Company

    		 Ticker

    		 Country

    		 % of portfolio

    		 Share “buy” ratings

    		 Dec. 27 price

    		 Price target

    		 Implied 12-month upside potential
    Exxon Mobil Corp.

    		 XOM,
    -1.64%         		U.S.

    		 16.4%

    		 54%

    		 110.19

    		 118.89

    		 7.89%
    Chevron Corp.

    		 CVX,
    -1.48%         		U.S.

    		 11.5%

    		 54%

    		 179.63

    		 190.52

    		 6.06%
    Shell PLC

    		 SHEL,
    -0.70%         		U.K.

    		 7.8%

    		 83%

    		 23.67

    		 29.82

    		 25.99%
    TotalEnergies SE

    		 TTE,
    -1.40%         		France

    		 5.6%

    		 62%

    		 59.63

    		 64.40

    		 8.00%
    ConocoPhillips

    		 COP,
    -2.67%         		U.K.

    		 5.4%

    		 83%

    		 118.47

    		 140.84

    		 18.88%
    Source: FactSet

    Prices on the tables in this article are in local currencies.

    IXC holds 51 stocks. To expand the list for a stock screen, we added the energy stocks in the S&P 400 Mid Cap Index
    MID,
    -1.24%
    and the S&P Small Cap 600 Index
    SML,
    -1.89%
    to bring the list up to 91 companies, which we then pared to 83 covered by at least five analysts polled by FactSet.

    Here are the 20 companies in the list with at least 75% “buy” or equivalent ratings that have the most upside potential over the next 12 months, based on consensus price targets:

    Company

    		 Ticker

    		 Country

    		 Share “buy” ratings

    		 Dec. 27 price

    		 Price target

    		 Implied 12-month upside potential
    EQT Corp.

    		 EQT,
    -7.82%         		U.S.

    		 83%

    		 36.34

    		 59.14

    		 63%
    Green Plains Inc.

    		 GPRE,
    -2.72%         		U.S.

    		 80%

    		 29.80

    		 43.40

    		 46%
    Cameco Corp.

    		 CCO,
    +0.33%         		Canada

    		 100%

    		 30.48

    		 44.25

    		 45%
    Talos Energy Inc.

    		 TALO,
    -8.40%         		U.S.

    		 86%

    		 19.77

    		 28.67

    		 45%
    Ranger Oil Corp. Class A

    		 ROCC,
    -6.22%         		U.S.

    		 100%

    		 41.33

    		 58.00

    		 40%
    Tourmaline Oil Corp.

    		 TOU,
    -4.92%         		Canada

    		 100%

    		 71.40

    		 98.83

    		 38%
    Civitas Resources Inc.

    		 CIVI,
    -4.06%         		U.S.

    		 100%

    		 58.82

    		 80.83

    		 37%
    Inpex Corp.

    		 1605,
    -2.08%         		Japan

    		 88%

    		 1,477.00

    		 1,965.56

    		 33%
    Diamondback Energy Inc.

    		 FANG,
    -2.26%         		U.S.

    		 84%

    		 137.58

    		 181.90

    		 32%
    Santos Limited

    		 STO,
    -3.12%         		Australia

    		 100%

    		 7.20

    		 9.26

    		 29%
    Matador Resources Co.

    		 MTDR,
    -3.98%         		U.S.

    		 79%

    		 57.59

    		 73.75

    		 28%
    Targa Resources Corp.

    		 TRGP,
    -2.63%         		U.S.

    		 95%

    		 73.89

    		 94.05

    		 27%
    Cenovus Energy Inc.

    		 CVE,
    -2.55%         		Canada

    		 84%

    		 26.24

    		 33.22

    		 27%
    Shell PLC

    		 SHEL,
    -0.70%         		U.K.

    		 83%

    		 23.67

    		 29.82

    		 26%
    Ampol Limited

    		 ALD,
    -2.89%         		Australia

    		 85%

    		 28.29

    		 35.01

    		 24%
    EOG Resources Inc.

    		 EOG,
    -3.54%         		U.S.

    		 79%

    		 132.08

    		 157.52

    		 19%
    ConocoPhillips

    		 COP,
    -2.67%         		U.S.

    		 83%

    		 118.47

    		 140.84

    		 19%
    Repsol SA

    		 REP,
    -0.66%         		Spain

    		 75%

    		 15.05

    		 17.88

    		 19%
    Halliburton Co.

    		 HAL,
    -3.03%         		U.S.

    		 86%

    		 39.27

    		 45.95

    		 17%
    Marathon Petroleum Corp.

    		 MPC,
    -1.97%         		U.S.

    		 76%

    		 116.82

    		 132.56

    		 13%
    Source: FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

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  • Here are MarketWatch’s most popular Moneyist advice columns of 2022

    Here are MarketWatch’s most popular Moneyist advice columns of 2022

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    What fresh shenanigans and money dilemmas enthralled readers in 2022?

    Another year of broken promises, dodgy dealings and moving letters about how to get back on one’s feet after divorce, unemployment and even a 15-year abusive relationship. 

    The most widely-read Moneyist of 2022, however, was actually one of the shortest letters from someone called ‘Surprised Sister.” The answer, as is often the case, was not so simple, nor so short.

    Here is the No. 1 Moneyist column of the year: ‘We are surprised and bewildered’: My brother passed away and left his house, cash and possessions to charity. Can his siblings contest his will?

    My response: There are times to contest a will: a parent who was being controlled by a new friend or greedy child, and/or someone who was forced to change their will when they were not of sound mind.

    But her own legal advice notwithstanding, I suggested she should accept your brother’s wishes. Feeling aggrieved that she did not inherit his estate is not enough to break his will. 

    Separate the emotions from the finance, and the answer often reveals itself. But there were others that ran the gamut from romance to stocks. They other most-read columns are an eclectic bunch:

    Here are the 5 runner-ups:

    1. I had a date with a great guy. I didn’t drink, but his wine added $36 to our bill. We split the check evenly. Should I have spoken up?

    It would be nice to offer to take the booze off the check, you were a non-drinker, would you speak up at one drink or two or three, if your date split the entire bill 50/50? 

    The financial intricacies of dating are like an onion that can be peeled ad infinitum. We’ve had plenty to chew over. Paying for one of your date’s drinks is OK, paying for two is pushing it.

    1. My father offered his 3 kids equal monetary gifts. My siblings took cash. I took stock. It’s soared in value — now they’re crying foul

    “The Other Brother” wrote that his father offered three children a choice: stocks or cash. The other two siblings took the cash. He took the cash. The stock soared. Dems are the breaks.

    Her siblings could have chosen stocks over cash, but they wanted immediate gratification. That was their decision, and they are going to have to take ownership of their choice and live with it.

    1. I’m an unmarried stay-at-home mother in a 20-year relationship, but my boyfriend won’t put my name on the deed of our house. Am I unreasonable?

    They have been in a 20-year relationship and have a 10-year-old child. “Not on the Deed” said she and her partner have had several tense “discussions” about adding me to the deed.

    I told her that her contribution to your partnership is valuable, her sense of worth is valuable, and her role as a homemaker and a mother is also valuable. Yes, he should add her.

    1. My friend got us free theater tickets. When I got home, she texted me, ‘Can you get our next meal or activity?’ Am I obliged to treat her?

    Even amidst the fights over inheritances, some breaches of social and financial etiquette seem so bizarre some people might think, ‘That behavior is too outrageous to be believable.” 

    The letter writer received free theater tickets, they split the bill 50/50 even though her friend had a cocktail, and she paid $10 for parking. Is he obliged to take her out again? No-can-do.

    1. My date chose an exclusive L.A. restaurant. After dinner, he accepted my credit card — and we split a $600 bill. Shouldn’t he have paid?

    Another dating story, this time where the guy chose a fancy restaurant and, as the date wore on, things took a turn for the worst, at least in the letter writer’s eyes: She was asked to split the bill.

    What if they didn’t get along? What if he was an abortion-rights supporter and she was anti-abortion? What if he was a Republican and she was a Democrat? Or vice-versa?  Always be prepared to pay.

    Follow Quentin Fottrell on Twitter.

    You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

    Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

    The Moneyist regrets he cannot reply to questions individually.

    More from Quentin Fottrell:

    ‘I’m left with a $100 Bûche de Noël for 10 people — and no place to go’: My friends canceled Christmas dinner. Should I end the 30-year friendship?

    I met my wife in 2019 and we married in 2020. I put her name on the deed of my $998,000 California home. Now I want a divorce. What can I do?

    I want to meet someone rich. Is that so wrong?’ I’m 46, earn $210,000, and own a $700,000 home. I’m tired of dating ‘losers.’

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  • 5 things not to buy in 2023

    5 things not to buy in 2023

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    It’s been a year of contradictions.

    The recession drum beats on, interest rates are rising, and the stock market has taken a tumble, and yet retail sales have risen 6.5% in the last 12 months, trailing a 7.1% increase in the cost of living.

    There are other reasons people should consider cutting back on spending in 2023. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — hit 2.4% in the third quarter from 3.4% in the prior quarter, the Bureau of Economic Analysis said.

    “There are signs that people are pulling back on certain expenditures. ”

    That is the lowest level since the Great Recession and the eighth-lowest quarterly rate on record (since 1947). Adjusted for inflation, savings are down 88% from their 2020 peak and 61% lower than before the pandemic, according to government data. The personal saving rate hit 2.4% in November vs. 2.2% in October. 

    Are people buying stocks during a bearish market, and/or have they run out of their pandemic-era savings? Whatever the reasons, more judicious investing and spending decisions seem to be the most prudent approach — especially given the uncertain economic outlook for 2023.

    There are signs that people are already pulling back on certain expenditures. Although retail sales are up on the year, they did decline 0.6% month-on-month in November to mark their biggest decline in almost a year, largely because of weak car sales.

    About those new cars: New-vehicle total sales for 2022 are projected to reach 13,687,000 units, down 8.4% on the year, according to a joint forecast from J.D. Power and LMC Automotive. MarketWatch reporter Philip van Doorn explains all the reasons why you may wish to skip buying a new car in 2023, in addition to their rising prices.

    So what else should you save your money on in 2023? MarketWatch writers give their verdict below.

    SPACs

    During the pandemic, people loved to buy special purpose acquisitions companies, known as SPACs. In 2021, 613 SPACs listed on U.S. stock exchanges through initial public offerings, according to SPAC Insider. The year before, there were 248 SPAC IPOs. There had never been more than 100 of these before in a single year. There were SPACs associated with Donald Trump and Serena Williams. There were so many, that one was called Just Another Acquisition Corp. 

    SPACs exist as a means to take private companies public, and theoretically give these shell companies a faster and less regulatory burdensome means to access public capital. The U.S. Securities and Exchange Commission warned investors last April that so-called advantages of the SPAC process, such as reduced legal liability, may not prove to be so solid if tested in court.

    The SPACs raised money even though they had no commercial operations or business, and tried to use the cash to buy something that did exist. But investors who bought SPACs that merged with private companies since 2015 have suffered losses of 37%, on average, a year after the merger, according to a recent study.  The SPAC and New Issue ETF 
    SPCX,
    +0.37%
    has slipped 12% this year. The frenzy for SPACs has predictably gone bust. But if you see one, just stay away from it.

    — Nathan Vardi

    Crypto 

    There are two main reasons not to invest in cryptocurrency in 2023, and neither has to do with the precipitous drop in value for most of the major coins in the last year, including but not limited to bitcoin
    BTCUSD,
    -1.11%    ,
    ethereum
    ETHE,
    -2.71%
    and tether
    USDTUSD,
    -0.02%    .
    Investors have long been conditioned to buy the dip and find value where others fear to tread, and then make money on the upswing. 

    Crypto is different because there’s no correlation to long-held market theories, and buying it amounts more to speculation than to investing. That might seem semantic, but if you look at financial planning holistically, then you treat investing as an exercise in risk tolerance — and crypto is all risk. 

    Which leads to the other main reason to avoid crypto in the next year: If you do buy it, there’s really no safe way to store it. There’s no federal insurance covering exchange failures and little cyber-theft protection for individuals. That leaves you on your own, which is not a good place to be with your money.

    — Beth Pinsker

    Meta Quest headsets

    On the consumer front, if you’re really into virtual reality, there is nothing wrong with jumping on the new Meta Quest two and Meta Quest Pro headsets that were introduced in 2022 by Meta Platforms Inc. 
    META,
    -0.78%    .

    The problem is that you might feel like you bought a BlackBerry
    BB,
    -3.42%
    phone in early 2007. Apple Inc.
    AAPL,
    -1.40%
    is expected to finally show off what engineers at the Silicon Valley giant have been cooking up in a years-long project to jump into augmented and virtual reality, and consumers are expected to at least get a glimpse at Apple’s attempt this year, if not a chance to buy whatever the company produces. 

    The headsets don’t come cheap: Meta said earlier this year it was raising the price of Meta Quest 2 headsets by $100 to $399.99 (128GB) and $499.99 (256GB). The iPhone’s introduction 15 years ago changed the way people look at smartphones, and Apple’s expected jump into this field in 2023 could leave anyone who spent their money on a Meta Quest headset wishing for a new reality.

    — Jeremy Owens

    Meme stocks 

    Struggling companies with business models that appear to some to be dying and/or struggling do not generally perform well in the stock market. But during the pandemic these companies often had stocks that soared. What drove them was social media sentiment, driven on platforms like Reddit, by a swarm of retail investors. 

    There was video game retailer GameStop
    GME,
    -7.42%    ,
    movie theater chain AMC
    AMC,
    -8.43%    ,
    and smartphone dinosaur Blackberry. AMC recently announced the sale of another $110 million in stock, adding to a total that has already exceeded $2 billion since the theater chain got swept up into meme-stock madness. CEO Adam Aron wrote on Twitter that the move put the company “in a much stronger cash position.”

    GameStop recently reported its seventh consecutive quarterly loss and reiterated its goal of returning to profitability in the near term, but analysts have signaled that many challenges lie ahead. During the company’s recent third-quarter conference call, Chief Executive Officer Matt Furlong said that GameStop would be open to exploring acquisitions of a strategic asset or complimentary business if they were available “in the right price range.”

    Buying meme companies like this worked for some in a booming stock market fueled by ultra-low interest rates. But we are now in a bear market with interest rates that are elevated. Corporate fundamentals are back in vogue. So are quaint investment ideas like cashflow. More likely than not, the days of buying meme stocks are over.

    — Nathan Vardi

    Tesla cars

    In recent years, Tesla Inc.
    TSLA,
    -8.25%
    has stood alone as the best option for electric vehicles, while other manufacturers struggled to get production running. But in 2023, there should be many more types of electric cars available, at prices that are expected to trend downward as the year goes along. Teslas range in price from $46,990 for the Tesla Model 3 to $138,880 for the Tesla Model X Plaid. 

    With major manufacturers such as General Motors Co.
    GM,
    -0.73%    ,
    Ford Motor Co.
    FORD,
    -2.68%    ,
    Toyota Corp. and Volkswagen
    VOW,
    -0.77%
    VLKAF,
    -1.15%
    jumping into the fray, and young Tesla wannabes like Rivian Automotive Inc.
    RIVN,
    -7.11%    ,
    Lucid Group Inc.
    LCID,
    -7.24%
    and FIsker Inc.
    FSR,
    -6.19%
     expected to start producing cars, consumers will have many more options for EVs. 

    Meanwhile, Tesla has done little to update the Model 3 since it was introduced in 2017, and has increased prices at a level that Chief Executive Elon Musk has admitted is “embarrassing” for a company that claimed to have a goal of mass-market pricing for EVs. 

    The average price of a new EV is $64,249, while a new gas car is $48,281, according to​​ Liz Najman, a climate scientist and communications and research manager at Recurrent Auto, an EV research and analytics firm focused on the used-vehicle market. After years of not having much choice beyond Tesla for EVs, 2023 appears to be the year that changes.

    — Jeremy Owens

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  • This company has wiped out more investor wealth in 2022 than Tesla

    This company has wiped out more investor wealth in 2022 than Tesla

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    Elon Musk has been trying this week to defend Tesla’s abysmal stock performance in 2022. The electric vehicle giant has seen its stock plummet by 61% this year, making it the 11th-worst performing stock in the S&P 500 in 2022.

    “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop,” Musk tweeted.

    You might expect that Tesla’s stock drop has wiped out more investor wealth than any other stock in the world this year. But you would be wrong.

    If we look at declines in market capitalization — the value of companies’ common-shares outstanding — Tesla
    TSLA,
    -1.76%
    has been the fourth worst-performing stock in the benchmark S&P 500 this year, as of 1 p.m. ET on Dec. 21:

    Company

    		 Ticker

    		 2022 market cap change ($bil)

    		 Intraday market cap on Dec. 21 ($bil)

    		 Dec. 31, 2021 market cap ($bil)

    		 2022 price change
    Amazon.com Inc.

    		 AMZN,
    +1.74%         		-$805

    		 $886

    		 $1,691

    		 -48%
    Apple Inc.

    		 AAPL,
    -0.28%         		-$753

    		 $2,160

    		 $2,913

    		 -24%
    Microsoft Corp.

    		 MSFT,
    +0.23%         		-$700

    		 $1,825

    		 $2,525

    		 -27%
    Tesla Inc.

    		 TSLA,
    -1.76%         		-$622

    		 $439

    		 $1,061

    		 -61%
    Meta Platforms Inc. Class A

    		 META,
    +0.79%         		-$466

    		 $318

    		 $784

    		 -64%
    Nvidia Corp.

    		 NVDA,
    -0.87%         		-$329

    		 $406

    		 $735

    		 -44%
    PayPal Holdings Inc.

    		 PYPL,
    +0.67%         		-$143

    		 $79

    		 $222

    		 -63%
    Netflix Inc.

    		 NFLX,
    -0.94%         		-$134

    		 $133

    		 $267

    		 -51%
    Walt Disney Co.

    		 DIS,
    +1.55%         		-$122

    		 $160

    		 $282

    		 -44%
    Salesforce Inc.

    		 CRM,
    +0.19%         		-$119

    		 $131

    		 $250

    		 -49%
    Source: FactSet

    On a percentage basis, all these stocks have performed worse than the full S&P 500, which has fallen 19%, excluding dividends.

    Amazon.com Inc.
    AMZN,
    +1.74%
    has erased more shareholder wealth than any other publicly traded company in 2022. In total, investors in Amazon have lost $804.6 billion this year. The stock is down 48% in 2022.

    Apple Inc.
    AAPL,
    -0.28%
    and Microsoft Corp.
    MSFT,
    +0.23%
    have also suffered larger market-cap declines than Tesla, by virtue of their sheer size.

    The companies have different fiscal and annual period ends, but if we look at data for the past three reported quarters and compare to the same period a year earlier, here’s how the four stack up:

    Company

    		 Ticker

    		 Change in sales for three quarters from year-earlier period

    		 Change in EPS for three quarters from year-earlier period
    Amazon.com Inc.

    		 AMZN,
    +1.74%
     

    		 10%

    		 N/A
    Apple Inc.

    		  
    AAPL,
    -0.28%         		6%

    		 2%
    Microsoft Corp.

    		  
    MSFT,
    +0.23%         		14%

    		 -2%
    Tesla Inc.

    		  
    TSLA,
    -1.76%         		58%

    		 169%
    Source: FactSet

    Amazon showed a net loss of $3 billion for the first three quarters of 2022 as the company neared the end of its extraordinary multiyear effort to build out its warehouse and fulfillment infrastructure. For the first three quarters of 2021, the company booked $19 billion in profits. When announcing Amazon’s third-quarter results CEO Andy Jassy said the company was working methodically toward “a stronger cost structure for the business moving forward.”

    The incredible growth of Amazon’s cloud business has stalled and disappointed the expectations the company had nurtured on Wall Street. The Amazon Web Services business is facing increasing competition from the likes of Microsoft and its customers are pulling back. Meanwhile, retail sales have also come in weak going into the Christmas and holiday season. 

    Amazon’s stock has declined 22% since it closed at $110.96 on Oct. 27, right before it disappointed investors not only with its third-quarter results, but with its outlook: It expects to break even during the holiday quarter. Analysts polled by FactSet had previously expected a profit of more than $5 billion.

    Tesla stands in contrast to Amazon, as you can see on the table above. Its sales grew by 58% during the first three quarters of 2022 from the year-earlier period and its earnings per share rose nearly threefold.

    This has been a year of significant declines for shares of giant tech-oriented companies, especially those that had traded at lofty price-to-earnings valuations — that group includes Amazon and Tesla. In fact, these companies have given up all their pandemic era gains int he stock market.

    But with Tesla’s results so outstanding through the first three quarters of 2022, it raises the question: How much of the drop in the electric car makers share price was tied to Musk’s actions as CEO of Twitter, which he acquired on Oct. 27 after a monthslong saga? And how much of a relief rally, if any, might there be for Tesla if Musk, as expected, steps down as Twitter CEO?

    How about some bottom-feeding?

    Here’s the same list of 10 stocks in the S&P 500 that have seen the largest declines in market cap this year, with a summary of analysts’ ratings, consensus price targets and declines in their forward price-to-earnings ratios:

    Company

    		 Ticker

    		 Share “buy” ratings

    		 Dec. 21 closing price

    		 Cons. price target

    		 Implied 12-month upside potential

    		 Forward P/E as of Dec. 20

    		 Forward P/E as of Dec. 31, 2021
    Amazon.com Inc.

    		 AMZN,
    +1.74%         		91%

    		 $85.19

    		 $134.85

    		 58%

    		 49.3

    		 64.9
    Apple Inc.

    		 AAPL,
    -0.28%         		74%

    		 $132.30

    		 $173.44

    		 31%

    		 21.4

    		 30.2
    Microsoft Corp.

    		 MSFT,
    +0.23%         		91%

    		 $241.80

    		 $293.06

    		 21%

    		 23.7

    		 34.0
    Tesla Inc.

    		 TSLA,
    -1.76%         		63%

    		 $137.80

    		 $272.64

    		 98%

    		 24.6

    		 120.3
    Meta Platforms Inc. Class A

    		 META,
    +0.79%         		63%

    		 $117.09

    		 $145.45

    		 24%

    		 14.5

    		 23.5
    Nvidia Corp.

    		 NVDA,
    -0.87%         		68%

    		 $160.85

    		 $195.72

    		 22%

    		 39.2

    		 58.0
    PayPal Holdings Inc.

    		 PYPL,
    +0.67%         		71%

    		 $68.76

    		 $104.32

    		 52%

    		 14.5

    		 36.0
    Netflix Inc.

    		 NFLX,
    -0.94%         		47%

    		 $288.19

    		 $302.89

    		 5%

    		 28.4

    		 45.6
    Walt Disney Co.

    		 DIS,
    +1.55%         		82%

    		 $87.02

    		 $119.60

    		 37%

    		 19.8

    		 34.2
    Salesforce Inc.

    		 CRM,
    +0.19%         		78%

    		 $128.45

    		 $195.18

    		 52%

    		 23.4

    		 53.5
    Source: FactSet

    A majority of analysts see a golden path ahead for 2023 for all of these stocks except for Netflix.

    For more information about any of these companies, click the tickers.

    Click here for a detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Don’t miss: 11 high-yield dividend stocks that are Wall Street’s favorites for 2023

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  • If you think a Santa Claus rally is coming to the stock market, this is how to play it

    If you think a Santa Claus rally is coming to the stock market, this is how to play it

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    The benchmark S&P 500 Index has finally fallen below the 3900- to 4100-point trading range.

    The move prompted an immediate reaction down to 3800, the next support level. (To see my suggestion for a so-called Santa Claus rally, please see the next item, below.)

    Frankly, I would have expected more selling after the S&P 500
    SPX,
    -2.32%
    broke a support level of that magnitude (perhaps a move to 3700).

    So, 3700 is the next support level, and then there is support at the yearly lows near 3500. On the upside, there is now resistance in the 3900-3940 area.

    The larger picture is that SPX is still in a downtrend, and that the last rally failed in early December right at the downtrend line that defines this bear market. The declining 200-day moving average (MA) was also in that same area, near 4100.

    We are closing our positions in the McMillan Volatility Band (MVB) buy signal that occurred in early October, and we will now wait for a new signal to set up. If SPX were to close below the lower -4σ Band (currently at 3760 and declining), that would be the first step toward a new buy signal. That does not appear to be imminent.

    Equity-only put-call ratios continue to rise and, thus, remain on sell signals. There has been some relatively heavy put buying in stock options over the past few weeks, and that has been a major contributing factor in the rise in the put-call ratios. These ratios are rather high on their charts, so they are considered to be in oversold territory. However, “oversold” does not mean “buy.”

    After the market broke below 3900, breadth was poor for the next two days. That pushed the breadth oscillators — which were already on sell signals dating back to December 5th — into oversold territory. We are now watching to see if they can generate buy signals. In fact, the NYSE breadth oscillator did generate a buy signal as of December 21st, but the “stocks only” oscillator has not. We generally require that any signal from this indicator (which is subject to whipsaws) persist for at least two consecutive days before considering it to be an actionable signal.

    New 52-week highs on the New York Stock Exchange have lagged for some time again, and thus the “new highs vs. new lows” indicator remains on a sell signal.

    So, the above indicators are relatively negative, but that is contrasted by the CBOE Volatility Index
    VIX,
    +15.50%
    indicators, which are more bullish. The VIX “spike peak” buy signal of December 13th remains in place. Moreover, the trend of VIX buy signal, which is a more intermediate-term signal, remains in place. VIX would have to rise above 26 to cancel out these buy signals.

    The construct of volatility derivatives remains bullish. That is, the term structures of the VIX futures and of the CBOE Volatility Indices slope upward. Moreover, the VIX futures are all trading at a premium to VIX. January VIX futures are now the front month, so we are watching for a warning sign, which would come if Jan VIX futures rose above the price of Feb VIX futures. That is not in danger of happening at this time.

    The seasonal patterns that supposedly “rule” between Thanskgiving and the beginning of the new trading year have not worked out this year. The last of those patterns is yet to come, though — the Santa Claus rally — and it may still be able to salvage something for the bulls.

    In summary, we continue to maintain a “core” bearish position and will continue to do so as long as SPX is in a downtrend. We will trade confirmed signals from our other indicators around that “core” position.

    New recommendation: Santa Claus rally

    The Santa Claus rally is a term and market seasonal pattern defined by Yale Hirsch over 60 years ago. It has a strong track record. The system is simple: The market rises over the last five trading days of one year and the first two trading days of the next year — a seven-day period.

    This year the system begins at the close of trading on Thursday, December 22nd (today). However, if that period does not produce a gain by SPX, that would be a further negative for stocks going forward.

    At the close of trading on Thursday, December 22nd,

    Buy 2 SPY Jan (13th) at-the-money calls

    And Sell 2 SPY Jan (13th) calls that are 15 points out of the money.

    There is no stop for this trade, except for time. If the SPDR S&P 500 ETF Trust
    SPY,
    -2.29%
    trades at the higher strike while the position is in place, then roll the entire spread up 15 points on each side. In any case, exit your spreads at the close of trading on Wednesday, January 4th (the second trading day of the new year).

    Follow-up action

    All stops are mental closing stops unless otherwise noted.

    We are using a “standard” rolling procedure for our SPY spreads: in any vertical bull or bear spread, if the underlying hits the short strike, then roll the entire spread. That would be roll up in the case of a call bull spread, or roll down in the case of a bear put spread. Stay in the same expiration, and keep the distance between the strikes the same unless otherwise recommended.

    Long 2 SPY Jan (20th) 375 puts and Short 2 Jan (20th) 355 puts: this is our “core” bearish position. As long as SPX remains in a downtrend, we want to maintain a position here.

    Long 1 SPY Jan (6th) 408 call and short 1 SPY Jan (6th) 423 call: this trade is based on the MVB buy signal, which was established on October 4th. We have already rolled up a couple of times and taken some profit out of the position. Close the remaining spread now.

    Long 2 KMB Jan (20th) 135 calls: we rolled this position up last week. The closing stop remains at 135.

    Long 2 IWM Jan (20th) 185 at-the-money calls and Short 2 IWM Jan (20th) 205 calls: this is our position based on the bullish seasonality between Thanksgiving and the second trading day of the new year. We will adjust this position if IWM rallies during the holding period, but initially there is no stop for the position, so the entire debit is at risk.

    Long 2 PSX Jan (20th) 105 puts: we intended to hold these puts as long as the weighted put-call ratio remains on a sell signal. However, the put-call ratio has rolled over to a buy signal, so exit these puts now.

    Long 2 AJRD Jan (20th) 52.5 calls: AJRD received an all-cash takeover offer of $56, so exit these calls now. Do not sell them below parity.

    Long 1 SPY Jan (20th) 402 call and Short 1 SPY Jan (20th) 417 calls: this spread was bought at the close on December 13th, when the latest VIX “spike peak” buy signal was generated. Stop yourself out if VIX subsequently closes above 25.84. Otherwise, we will hold for 22 trading days.

    Long 1 SPY Jan (20th) 389 put and Short 1 SPY Jan (20th) 364 put: this was an addition to our “core” bearish position, established when SPX closed below 3900 on December 15th. Stop yourself out of this spread if SPX closes above 3940.

    Long 2 PCAR Feb (17th) 97.20 puts: these puts were bought on December 20th, when they finally traded at our buy limit. We will continue to hold these puts as long as the weighted put-call ratio is on a sell signal.

    Send questions to: lmcmillan@optionstrategist.com.

    Lawrence G. McMillan is president of McMillan Analysis, a registered investment and commodity trading advisor. McMillan may hold positions in securities recommended in this report, both personally and in client accounts. He is an experienced trader and money manager and is the author of the best-selling book, Options as a Strategic Investment. www.optionstrategist.com

    Disclaimer: ©McMillan Analysis Corporation is registered with the SEC as an investment advisor and with the CFTC as a commodity trading advisor. The information in this newsletter has been carefully compiled from sources believed to be reliable, but accuracy and completeness are not guaranteed. The officers or directors of McMillan Analysis Corporation, or accounts managed by such persons may have positions in the securities recommended in the advisory.

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  • 11 high-yield dividend stocks that are Wall Street’s favorites for 2023

    11 high-yield dividend stocks that are Wall Street’s favorites for 2023

    [ad_1]

    Investors love dividend stocks but there are different ways to look at them, including various “quality” approaches. Today we are focusing on high yields.

    A high dividend yield can be a warning that investors have lost confidence in a company’s ability to maintain its dividend payout. But there are always exceptions, some of which can be brought about by market events — some investors remain skeptical of energy stocks, for example, after so much pain before this year’s outstanding performance for the sector.

    Below is a screen of stocks that have high dividend yields and are favored by analysts. The screen has no financial quality filters.

    For investors who are interested in dividend stocks but wish to focus on quality and total returns, this recent look at the S&P Dividend Aristocrats (companies that have raised dividends consistently for many years) might be of interest. For those looking for income but also worried about dividend cuts, here is a list of stocks with dividend yields of at least 5% whose payouts are expected to be well-covered by free cash flow in 2023.

    If you are looking for higher yields with moderate risk, you should at also learn about funds that use covered-call option strategies to enhance income.

    Removing the filters for a high-yield dividend-stock screen

    For a broad screen of stocks with high dividend yields that are favored by analysts, we began with the S&P Composite 1500 Index
    SP1500,
    +1.42%    ,
    which is made up of the S&P 500
    SPX,
    +1.42%    ,
    the S&P 400 Mid Cap Index
    MID,
    +1.48%    ,
    and the S&P 600 Small Cap Index
    SML,
    +1.49%    .

    The S&P indexes exclude energy partnerships, so we added the 15 stocks held by the Alerian MLP ETF
    AMLP,
    +1.81%
    to the list. Energy partnerships tend to have high distribution yields, in part because they pass most earnings through to investors. But they also can make tax preparation more complicated. They can also be volatile as oil
    CL00,
    +2.96%
    CL00 and natural-gas
    NG00,
    +1.58%
    prices swing.

    The S&P indexes also exclude business development companies, or BDCs, so we expanded our initial screen to include the 24 stocks held by the VanEck BDC income ETF
    BIZD,
    +0.76%    .
    BDCs are specialized leveraged lenders that make loans with high interest rates, mainly to middle-market companies. They often take equity stakes in the companies they lend to, for a venture-capital-type of investment style. The BDC space features several stocks with very high dividend yields, but is also known for volatility.

    You have been warned — this particular stock screen focuses only on high yields and favorable ratings among analysts working for brokerage firms. There is no look back at dividend cuts and no cash-flow analysis as featured in other dividend-stock articles. If you see anything of interest resulting from the screen, you need to do your own research to consider whether or not a long-term commitment to one or more of these companies is worth the risk as you seek high income.

    The screen

    Starting with the S&P Composite 1500 and the components of AMLP and BIZD, there are 68 stocks with dividend yields of at least 8%, according to data provided by FactSet.

    Among the 68 companies, 55 made the first screen, because they are covered by at least five analysts polled by FactSet.

    Among the 55 companies, 11 have “buy” or equivalent ratings among at least 70% of analysts.

    Here they are, ranked by upside potential implied by analysts’ consensus price targets:

    Company

    		 Ticker

    		 Dividend yield

    		 Share “buy” ratings

    		 Dec. 20 price

    		 Consensus price target

    		 Implied 12-month upside potential
    Energy Transfer LP

    		 ET,
    +2.35%         		9.08%

    		 95%

    		 $11.68

    		 $16.24

    		 39%
    Enterprise Products Partners LP

    		 EPD,
    +0.88%         		8.12%

    		 79%

    		 $23.39

    		 $31.69

    		 35%
    Barings BDC Inc.

    		 BBDC,
         		11.67%

    		 86%

    		 $8.14

    		 $10.75

    		 32%
    Redwood Trust Inc.

    		 RWT,
    +2.70%         		13.45%

    		 80%

    		 $6.84

    		 $8.92

    		 30%
    Crestwood Equity Partners LP

    		 CEQP,
    +0.78%         		9.75%

    		 100%

    		 $26.86

    		 $35.00

    		 30%
    KKR Real Estate Finance Trust Inc.

    		 KREF,
    +1.38%         		11.90%

    		 71%

    		 $14.45

    		 $18.50

    		 28%
    Owl Rock Capital Corp.

    		 ORCC,
    +0.38%         		11.21%

    		 91%

    		 $11.78

    		 $14.73

    		 25%
    Sixth Street Specialty Lending Inc.

    		 TSLX,
    +1.89%         		10.48%

    		 82%

    		 $17.18

    		 $20.90

    		 22%
    Oaktree Specialty Lending Corp.

    		 OCSL,
    -0.37%         		9.97%

    		 100%

    		 $6.77

    		 $7.75

    		 14%
    Ares Capital Corp.

    		 ARCC,
    +1.22%         		10.45%

    		 93%

    		 $18.38

    		 $20.87

    		 14%
    BlackRock TCP Capital Corp.

    		 TCPC,
    +1.76%         		10.25%

    		 71.43%

    		 $12.49

    		 $14.00

    		 12%
    Source: FactSet

    One way to begin your own research into any company listed here is to click on the ticker for more information.

    You should also read Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

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  • This is the only stock market prediction for 2023 that you need to know

    This is the only stock market prediction for 2023 that you need to know

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    When you hear or read about an investing expert’s outlook for the year ahead, bear one thing in mind: Every forecast about 2022 was wrong.

    Not just a bit amiss, but complete, total busts.

    Oh, some strategists will claim victory for saying the stock market
    SPX,
    -1.11%
    would be down in 2022 or that Treasury bonds
    TMUBMUSD10Y,
    3.488%
    would have yields north of 3%. Or that the yield curve would invert or that inflation would be stickier than anticipated. But they don’t deserve laurels for that.

    No one said the market would peak on the first day of the calendar year and go downhill from there and, ultimately, that’s the only tale of 2022 that investors will remember.

    Expect forecasts for 2023 to be equally miscalculated.

    That doesn’t mean investors should ignore or dismiss the exercise of experts offering outlooks, but it’s why you should question the motives of the soothsayers and revisit one of the greatest market forecasts of all time that’s well on its way to becoming true no matter what the market dishes out next year.

    Face it, market strategists and economists don’t make forecasts because they want to, but rather because they have to. Keeping their jobs depends on making mostly lame predictions.

    Say something memorable, and the expert and firm might be held accountable for it; pabulum, however, gets overlooked when it’s wrong.

    Obvious observations

    Thus, forecasts lack insight, gravitating toward the middle ground, to obvious observations on the effect of economic and stock market cycles.

    “It looks bad if they don’t have an opinion, but worse when they get something wrong, so most forecasts say as little as possible,” said Jeff Rosenkranz, a fixed-income portfolio manager at Shelton Capital Management, after we finished an interview last week for my podcast, “Money Life with Chuck Jaffe.” “You’re not getting much insight — if they have really valuable insights, this isn’t where they want to tell the world — so most forecasts just aren’t worth much.”

    Adds Howard Yaruss, a New York University professor and author of the recent book “Understandable Economics”: “If you are talking about a fine-tuned forecast about stocks and asset values, I don’t see how anyone could go there; accurate predictions aren’t going to happen, or will be luck if they turn out true. Their statements are more about marketing than the market.”

    One of Wall Street’s best-known prognosticators says credibility is impossible without accountability, but he acknowledges the tightrope experts walk if they say too much.

    Bob Doll, chief investment officer at Crossmark Global Investments, started making forecasts — 10 specific prognostications covering markets, the economy, politics and more — in the 1990s while working for Oppenheimer. He carried the exercise with him during well-chronicled career stops at BlackRock
    BLK,
    +0.29%    ,
    Nuveen and elsewhere, and historically has been right on north of 70% of his calls.

    ‘Wordsmithing’

    “There’s wordsmithing going on; you word them so that you have a noticeably higher than 50% chance of getting them right, and then say a few things you truly believe in that will make you look really smart if they happen without making you look dumb for believing it,” Doll says.

    Good forecasts are not just an academic, rote exercise, Doll says, provided that they’re relevant, prompt thoughtful reactions from the audience and that the expert stands by them. Doll revisits his forecasts every quarter and doesn’t alter them in response to current events.

    “You call the beast as you see it,” he says, “and then you stand by it and live with it, and you don’t worry about getting them all right because if you haven’t gotten something wrong, you’ve only said the obvious.”

    Wildest market forecast

    Which leads to what I think is the best, wildest market forecast of all time, even if it’s more obvious than it appears: Dow
    DJIA,
    -0.85%
    116,200.

    If that sounds far-fetched with the Dow Jones Industrial Average standing at roughly 33,500 — and down about 8% since the start of the year — consider that the prognostication was made in 1995 with the index hovering around 4,500.

    Also, the call was for the benchmark to hit that level in 2040.

    Bill Berger, founder of the Berger Funds — which merged into the Janus funds in 2002 — made the call at the first Society of American Business Editors & Writers Conference on Personal Finance in Boston, giving one of the best talks I’ve ever heard, mostly railing against forecasting and the habit of making too much of market milestones.

    (If the Dow 116,200 prediction rings familiar to you, chances are you learned about it from me, as I raised it periodically while working as senior columnist for MarketWatch between 2003 and 2017. Today marks the return of my column to this site, and I’m glad to be back.)

    Berger cited what he called “the two rules of forecasting.”

    Rule 1: For each forecast, there is an equal and opposite forecast.

    Rule 2: Both of them are wrong.

    Ironically, 116,200 sounds implausible, but looks dead solid perfect.

    By 1995, Berger had worked in investments for 45 years; when he got started, the Dow was below 200. Mathematically, he saw the Dow’s future as reflecting the past; repeating the growth he’d lived through would push the benchmark to 116,200 over the next 45 years.

    A septuagenarian at the time, Berger wryly suggested that if he was proved wrong, people come find him to discuss it; sadly, he died a few years later.

    The long game

    Despite the outlandishness of the forecast, Morningstar calculates that hitting the target would have required an annualized gain of roughly 7.35% over the 45 years. When the Dow peaked on Jan. 4, 2022, the necessary gain was down to 6.33% annualized.

    As of Dec. 1, Morningstar calculates that hitting 116,200 in the fall of 2040 will take a 7.07% annualized gain, which feels like a safe bet.

    Thus, 2022’s disappointments haven’t derailed long-term investors any more than they’ve crashed the greatest-ever market forecast.

    That’s the lesson to remember when confronted with 2023 forecasts; neither the market’s issues nor experts’ ability to diagnose them will derail long-term financial plans or make lifetime goals unreachable.

     That’s a prediction worth betting on.

    Chuck Jaffe is a MarketWatch columnist and host of the “Money Life with Chuck Jaffe” podcast.

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  • These are the top 10 mistakes people make when planning for retirement

    These are the top 10 mistakes people make when planning for retirement

    [ad_1]

    We all make mistakes in planning for our golden years. But which are the worst, which are the most common, and which ones do we all need to watch out for?

    Financial planners have weighed in with the top 10 they see among clients. It’s emerged in a survey conducted by money managers Natixis and just released. And it’s a terrific checklist for anyone who wants to see how they’re doing, and what they need to change.

    The…

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  • Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

    Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

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    Following a sharp and sustained rise in interest rates, U.S. stocks have taken a broad beating this year.

    But 2023 may bring very different circumstances.

    Below are lists of analysts’ favorite stocks among the benchmark S&P 500
    SPX,
    the S&P 400 Mid Cap Index
    MID
    and the S&P Small Cap 600 Index
    SML
    that are expected to rise the most over the next year. Those lists are followed by a summary of opinions of all 30 stocks in the Dow Jones Industrial Average
    DJIA.

    Stocks rallied on Dec. 13 when the November CPI report showed a much slower inflation pace than economists had expected. Investors were also anticipating the Federal Open Market Committee’s next monetary policy announcement on Dec. 14. The consensus among economists polled by FactSet is for the Federal Reserve to raise the federal funds rate by 0.50% to a target range of 4.50% to 4.75%.

    Read: 5 things to watch when the Fed makes its interest-rate decision

    A 0.50% increase would be a slowdown from the four previous increases of 0.75%. The rate began 2022 in a range of zero to 0.25%, where it had sat since March 2020.

    A pivot for the Fed Reserve and the possibility that the federal funds rate will reach its “terminal” rate (the highest for this cycle) in the near term could set the stage for a broad rally for stocks in 2023.

    Wall Street’s large-cap favorites

    Among the S&P 500, 92 stocks are rated “buy” or the equivalent by at least 75% of analysts working for brokerage firms. That number itself is interesting — at the end of 2021, 93 of the S&P 500 had this distinction. Meanwhile, the S&P 500 has declined 16% in 2022, with all sectors down except for energy, which has risen 53%, and the utilities sector, which his risen 1% (both excluding dividends).

    Here are the 20 stocks in the S&P 500 with at least 75% “buy” or equivalent ratings that analysts expect to rise the most over the next year, based on consensus price targets:

    Company

    		 Ticker

    		 Industry

    		 Closing price – Dec. 12

    		 Consensus price target

    		 Implied 12-month upside potential

    		 Share “buy” ratings

    		 Price change – 2022 through Dec. 12
    EQT Corp.

    		 EQT Oil and Gas Production

    		 $36.91

    		 $59.70

    		 62%

    		 78%

    		 69%
    Catalent Inc.

    		 CTLT Pharmaceuticals

    		 $45.50

    		 $72.42

    		 59%

    		 75%

    		 -64%
    Amazon.com Inc.

    		 AMZN Internet Retail

    		 $90.55

    		 $136.02

    		 50%

    		 91%

    		 -46%
    Global Payments Inc.

    		 GPN Misc. Commercial Services

    		 $99.64

    		 $147.43

    		 48%

    		 75%

    		 -26%
    Signature Bank

    		 SBNY Regional Banks

    		 $122.73

    		 $180.44

    		 47%

    		 78%

    		 -62%
    Salesforce Inc.

    		 CRM Software

    		 $133.11

    		 $195.59

    		 47%

    		 80%

    		 -48%
    Bio-Rad Laboratories Inc. Class A

    		 BIO Medical Specialties

    		 $418.28

    		 $591.00

    		 41%

    		 100%

    		 -45%
    Zoetis Inc. Class A

    		 ZTS Pharmaceuticals

    		 $152.86

    		 $212.80

    		 39%

    		 87%

    		 -37%
    Delta Air Lines Inc.

    		 DAL Airlines

    		 $34.77

    		 $48.31

    		 39%

    		 90%

    		 -11%
    Diamondback Energy Inc.

    		 FANG Oil and Gas Production

    		 $134.21

    		 $182.33

    		 36%

    		 84%

    		 24%
    Caesars Entertainment Inc

    		 CZR Casinos/ Gaming

    		 $50.27

    		 $67.79

    		 35%

    		 81%

    		 -46%
    Alphabet Inc. Class A

    		 GOOGL Internet Software/ Services

    		 $93.31

    		 $125.70

    		 35%

    		 92%

    		 -36%
    Halliburton Co.

    		 HAL Oilfield Services/ Equipment

    		 $34.30

    		 $45.95

    		 34%

    		 86%

    		 50%
    Alaska Air Group Inc.

    		 ALK Airlines

    		 $45.75

    		 $61.08

    		 34%

    		 93%

    		 -12%
    Targa Resources Corp.

    		 TRGP Gas Distributors

    		 $70.42

    		 $93.95

    		 33%

    		 95%

    		 35%
    Charles River Laboratories International Inc.

    		 CRL Misc. Commercial Services

    		 $201.94

    		 $269.25

    		 33%

    		 88%

    		 -46%
    ServiceNow Inc.

    		 NOW Information Technology Services

    		 $401.64

    		 $529.83

    		 32%

    		 92%

    		 -38%
    Take-Two Interactive Software Inc.

    		 TTWO Software

    		 $102.61

    		 $135.04

    		 32%

    		 79%

    		 -42%
    EOG Resources Inc.

    		 EOG Oil and Gas Production

    		 $124.06

    		 $158.24

    		 28%

    		 82%

    		 40%
    Southwest Airlines Co.

    		 LUV Airlines

    		 $38.94

    		 $49.56

    		 27%

    		 76%

    		 -9%
    Source: FactSet

    Most of the companies on the S&P 500 list expected to soar in 2023 have seen large declines in 2022. But the company at the top of the list, EQT Corp.
    EQT,
    is an exception. The stock has risen 69% in 2022 and is expected to add another 62% over the next 12 months. Analysts expect the company’s earnings per share to double during 2023 (in part from its expected acquisition of THQ), after nearly a four-fold EPS increase in 2022.

    Shares of Amazon.com Inc.
    AMZN
    are expected to soar 50% over the next year, following a decline of 46% so far in 2022. If the shares were to rise 50% from here to the price target of $136.02, they would still be 18% below their closing price of 166.72 at the end of 2021.

    Read: Here’s why Amazon is Citi’s top internet stock idea

    You can see the earnings estimates and more for any stock in this article by clicking on its ticker.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Mid-cap stocks expected to rise the most

    The lists of favored stocks are limited to those covered by at least five analysts polled by FactSet.

    Among components of the S&P 400 Mid Cap Index, there are 84 stocks with at least 75% “buy” ratings. Here at the 20 expected to rise the most over the next year:

    Company

    		 Ticker

    		 Industry

    		 Closing price – Dec. 12

    		 Consensus price target

    		 Implied 12-month upside potential

    		 Share “buy” ratings

    		 Price change – 2022 through Dec. 12
    Arrowhead Pharmaceuticals Inc.

    		 ARWR Biotechnology

    		 $31.85

    		 $69.69

    		 119%

    		 83%

    		 -52%
    Lantheus Holdings Inc.

    		 LNTH Medical Specialties

    		 $54.92

    		 $102.00

    		 86%

    		 100%

    		 90%
    Progyny Inc.

    		 PGNY Misc. Commercial Services

    		 $31.21

    		 $55.57

    		 78%

    		 100%

    		 -38%
    Coherent Corp.

    		 COHR Electronic Equipment/ Instruments

    		 $35.41

    		 $60.56

    		 71%

    		 84%

    		 -48%
    Exelixis Inc.

    		 EXEL Biotechnology

    		 $16.08

    		 $26.07

    		 62%

    		 81%

    		 -12%
    Darling Ingredients Inc.

    		 DAR Food: Specialty/ Candy

    		 $61.17

    		 $97.36

    		 59%

    		 93%

    		 -12%
    Perrigo Co. PLC

    		 PRGO Pharmaceuticals

    		 $31.83

    		 $49.25

    		 55%

    		 100%

    		 -18%
    Mattel Inc.

    		 MAT Recreational Products

    		 $17.39

    		 $26.58

    		 53%

    		 87%

    		 -19%
    ACI Worldwide Inc.

    		 ACIW Software

    		 $20.75

    		 $31.40

    		 51%

    		 83%

    		 -40%
    Topgolf Callaway Brands Corp.

    		 MODG Recreational Products

    		 $21.99

    		 $32.91

    		 50%

    		 83%

    		 -20%
    Dycom Industries Inc.

    		 DY Engineering and Construction

    		 $86.03

    		 $128.13

    		 49%

    		 100%

    		 -8%
    Travel + Leisure Co.

    		 TNL Hotels/ Resorts/ Cruiselines

    		 $37.98

    		 $56.00

    		 47%

    		 75%

    		 -31%
    Frontier Communications Parent Inc.

    		 FYBR Telecommunications

    		 $25.21

    		 $36.18

    		 44%

    		 82%

    		 -15%
    Manhattan Associates Inc.

    		 MANH Software

    		 $120.06

    		 $171.80

    		 43%

    		 88%

    		 -23%
    MP Materials Corp Class A

    		 MP Other Metals/ Minerals

    		 $31.39

    		 $44.79

    		 43%

    		 92%

    		 -31%
    Lumentum Holdings Inc.

    		 LITE Electrical Products

    		 $54.45

    		 $76.44

    		 40%

    		 76%

    		 -49%
    Tenet Healthcare Corp.

    		 THC Hospital/ Nursing Management

    		 $44.22

    		 $62.00

    		 40%

    		 80%

    		 -46%
    Repligen Corp.

    		 RGEN Pharmaceuticals

    		 $166.88

    		 $233.10

    		 40%

    		 82%

    		 -37%
    STAAR Surgical Co.

    		 STAA Medical Specialties

    		 $59.57

    		 $82.67

    		 39%

    		 82%

    		 -35%
    Carlisle Cos. Inc.

    		 CSL Building Products

    		 $251.99

    		 $348.33

    		 38%

    		 75%

    		 2%
    Source: FactSet
    Wall Street’s favorite small-cap names

    Among companies in the S&P Small Cap 600 Index, 91 are rated “buy” or the equivalent by at least 75% of analysts. Here are the 20 with the highest 12-month upside potential indicated by consensus price targets:

    Company

    		 Ticker

    		 Industry

    		 Closing price – Dec. 12

    		 Consensus price target

    		 Implied 12-month upside potential

    		 Share “buy” ratings

    		 Price change – 2022 through Dec. 12
    UniQure NV

    		 QURE Biotechnology

    		 $22.99

    		 $51.29

    		 123%

    		 95%

    		 11%
    Cara Therapeutics Inc.

    		 CARA Biotechnology

    		 $11.34

    		 $23.63

    		 108%

    		 88%

    		 -7%
    Vir Biotechnology Inc.

    		 VIR Biotechnology

    		 $25.50

    		 $53.00

    		 108%

    		 75%

    		 -39%
    Dynavax Technologies Corp.

    		 DVAX Biotechnology

    		 $11.22

    		 $23.20

    		 107%

    		 100%

    		 -20%
    Thryv Holdings Inc.

    		 THRY Advertising/ Marketing Services

    		 $18.40

    		 $36.75

    		 100%

    		 100%

    		 -55%
    Artivion Inc.

    		 AORT Medical Specialties

    		 $12.93

    		 $23.13

    		 79%

    		 83%

    		 -36%
    Cytokinetics Inc.

    		 CYTK Pharmaceuticals

    		 $38.33

    		 $67.43

    		 76%

    		 100%

    		 -16%
    Harsco Corp.

    		 HSC Environmental Services

    		 $7.17

    		 $12.30

    		 72%

    		 80%

    		 -57%
    Ligand Pharmaceuticals Inc.

    		 LGND Pharmaceuticals

    		 $64.80

    		 $110.83

    		 71%

    		 100%

    		 -35%
    Corcept Therapeutics Inc.

    		 CORT Pharmaceuticals

    		 $20.84

    		 $34.20

    		 64%

    		 80%

    		 5%
    Payoneer Global Inc.

    		 PAYO Misc. Commercial Services

    		 $5.70

    		 $9.33

    		 64%

    		 100%

    		 -22%
    Xencor Inc.

    		 XNCR Biotechnology

    		 $28.69

    		 $46.71

    		 63%

    		 93%

    		 -28%
    Pacira Biosciences Inc.

    		 PCRX Pharmaceuticals

    		 $45.50

    		 $72.90

    		 60%

    		 80%

    		 -24%
    BioLife Solutions Inc.

    		 BLFS Chemicals

    		 $19.72

    		 $31.38

    		 59%

    		 89%

    		 -47%
    Customers Bancorp Inc.

    		 CUBI Regional Banks

    		 $30.00

    		 $47.63

    		 59%

    		 75%

    		 -54%
    ModivCare Inc.

    		 MODV Other Transportation

    		 $92.22

    		 $145.83

    		 58%

    		 100%

    		 -38%
    Stride Inc.

    		 LRN Consumer Services

    		 $32.56

    		 $51.25

    		 57%

    		 100%

    		 -2%
    Ranger Oil Corp. Class A

    		 ROCC Oil and Gas Production

    		 $36.98

    		 $58.00

    		 57%

    		 100%

    		 37%
    Outfront Media Inc.

    		 OUT Real Estate Investment Trusts

    		 $17.59

    		 $27.00

    		 53%

    		 83%

    		 -34%
    Walker & Dunlop Inc.

    		 WD Finance/ Rental/ Leasing

    		 $82.22

    		 $125.20

    		 52%

    		 100%

    		 -46%
    Source: FactSet
    The Dow

    Here are all 30 components of the Dow Jones Industrial Average ranked by how much analysts expect their prices to rise over the next year:

    Company

    		 Ticker

    		 Industry

    		 Closing price – Dec. 12

    		 Consensus price target

    		 Implied 12-month upside potential

    		 Share “buy” ratings

    		 Price change – 2022 through Dec. 12
    Salesforce Inc.

    		 CRM Software

    		 $133.11

    		 $195.59

    		 47%

    		 80%

    		 -48%
    Walt Disney Co.

    		 DIS Movies/ Entertainment

    		 $94.66

    		 $119.60

    		 26%

    		 82%

    		 -39%
    Apple Inc.

    		 AAPL Telecommunications Equipment

    		 $144.49

    		 $173.70

    		 20%

    		 74%

    		 -19%
    Verizon Communications Inc.

    		 VZ Telecommunications

    		 $37.95

    		 $44.60

    		 18%

    		 21%

    		 -27%
    Visa Inc. Class A

    		 V Misc.s Commercial Services

    		 $214.59

    		 $249.33

    		 16%

    		 86%

    		 -1%
    Microsoft Corp.

    		 MSFT Software

    		 $252.51

    		 $293.06

    		 16%

    		 91%

    		 -25%
    Chevron Corp.

    		 CVX Integrated Oil

    		 $169.75

    		 $191.20

    		 13%

    		 54%

    		 45%
    Cisco Systems Inc.

    		 CSCO Information Technology Services

    		 $49.30

    		 $53.76

    		 9%

    		 44%

    		 -22%
    UnitedHealth Group Inc.

    		 UNH Managed Health Care

    		 $545.86

    		 $593.30

    		 9%

    		 85%

    		 9%
    Goldman Sachs Group Inc.

    		 GS Investment Banks/ Brokers

    		 $363.18

    		 $392.63

    		 8%

    		 59%

    		 -5%
    Walmart Inc.

    		 WMT Specialty Stores

    		 $148.02

    		 $159.86

    		 8%

    		 72%

    		 2%
    JPMorgan Chase & Co.

    		 JPM Banks

    		 $134.21

    		 $143.84

    		 7%

    		 59%

    		 -15%
    Home Depot Inc.

    		 HD Home Improvement Chains

    		 $327.98

    		 $346.61

    		 6%

    		 61%

    		 -21%
    American Express Co.

    		 AXP Finance/ Rental/ Leasing

    		 $157.31

    		 $164.57

    		 5%

    		 43%

    		 -4%
    McDonald’s Corp.

    		 MCD Restaurants

    		 $276.62

    		 $288.67

    		 4%

    		 72%

    		 3%
    Johnson & Johnson

    		 JNJ Pharmaceuticals

    		 $177.84

    		 $185.35

    		 4%

    		 36%

    		 4%
    Coca-Cola Co.

    		 KO Beverages: Non-Alcoholic

    		 $63.97

    		 $66.62

    		 4%

    		 73%

    		 8%
    Boeing Co.

    		 BA Aerospace and Defense

    		 $186.27

    		 $192.69

    		 3%

    		 77%

    		 -7%
    Intel Corp.

    		 INTC Semiconductors

    		 $28.69

    		 $29.54

    		 3%

    		 13%

    		 -44%
    Walgreens Boots Alliance Inc.

    		 WBA Drugstore Chains

    		 $41.06

    		 $42.24

    		 3%

    		 17%

    		 -21%
    Merck & Co. Inc.

    		 MRK Pharmaceuticals

    		 $108.97

    		 $110.62

    		 2%

    		 65%

    		 42%
    Caterpillar Inc.

    		 CAT Trucks/ Construction/ Farm Machinery

    		 $233.06

    		 $236.23

    		 1%

    		 41%

    		 13%
    Honeywell International Inc.

    		 HON Aerospace and Defense

    		 $214.50

    		 $217.35

    		 1%

    		 54%

    		 3%
    Nike Inc. Class B

    		 NKE Apparel/ Footwear

    		 $112.07

    		 $112.58

    		 0%

    		 64%

    		 -33%
    3M Co.

    		 MMM Industrial Conglomerates

    		 $126.85

    		 $127.30

    		 0%

    		 5%

    		 -29%
    Procter & Gamble Co.

    		 PG Household/ Personal Care

    		 $152.47

    		 $150.22

    		 -1%

    		 59%

    		 -7%
    Travelers Companies Inc.

    		 TRV Multi-Line Insurance

    		 $187.11

    		 $184.24

    		 -2%

    		 18%

    		 20%
    Amgen Inc.

    		 AMGN Biotechnology

    		 $276.78

    		 $264.79

    		 -4%

    		 24%

    		 23%
    Dow Inc.

    		 DOW Chemicals

    		 $51.11

    		 $48.73

    		 -5%

    		 15%

    		 -10%
    International Business Machines Corp.

    		 IBM Information Technology Services

    		 $149.21

    		 $140.29

    		 -6%

    		 33%

    		 12%
    Source: FactSet

    Don’t miss: 10 Dividend Aristocrat stocks expected by analysts to rise up to 54% in 2023

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  • This fund beats the S&P 500 by using just 75 of its components. Here’s how it works.

    This fund beats the S&P 500 by using just 75 of its components. Here’s how it works.

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    What worked well during the years-long bull market through 2021 — a focus on growth, regardless of price — has ground to a halt this year. The rebirth of the value style of investing — and modest valuations overall — has taken hold.

    The approach taken by the Invesco S&P 500 GARP ETF has paid off through both bull and bear markets.

    Let’s begin with a 10-year chart comparing total returns with dividends reinvested for the Invesco S&P 500 GARP ETF
    SPGP,
    +0.67%
    and the SPDR S&P 500 ETF Trust
    SPY,
    +0.78%    ,
    which tracks the benchmark S&P 500:


    FactSet

    So far this year, SPGP is down 12%, while SPY is down 16%. But the long-term chart shows significant and consistent outperformance for SPGP, even during the bull market.

    The S&P 500 GARP Index

    GARP stands for “growth at a reasonable price.” SPGP tracks the S&P 500 GARP Index, which is reconstituted and rebalanced twice a year, on the third Fridays of June and December. The next change occurs Dec. 16.

    S&P Dow Jones Indices assigns a growth score to each component of the S&P 500 by averaging the three-year compound annual growth rate (CAGR) for earnings and sales per share.

    The top 150 components of the S&P 500 by growth score are eligible for inclusion in the GARP index. Those 150 are ranked by “quality/value composite score,” which is the average of these three ratios:

    • Financial leverage — total debt to book value.

    • Return on equity — trailing 12 months’ earnings per share divided by book value per share.

    • Earnings-to-price — 12 months’ earnings per share divided by the share price.

    The top 75 of the 150 by QV rankings are then included in the GARP index and weighted by the growth score, with portfolio weightings ranging from 0.5% to 5%.

    There is a weighting limitation of 40% to any one of the 11 S&P sectors.

    Addressing concentration risk

    The benchmark S&P 500 Index
    SPX,
    +0.75%
    is weighted by market capitalization, which means it is more heavily concentrated than you might expect — success is rewarded, with rising stocks more heavily weighted over time.

    That can backfire during a bear market, with Amazon.com Inc.
    AMZN,
    +2.14%
    down 47% and Tesla Inc.
    TSLA,
    -0.34%
    down 51% this year, to name two prominent examples.

    Looking at the SPDR S&P 500 ETF Trust
    SPY,
    +0.78%    ,
    which is the first and largest exchange traded fund and tracks the benchmark index by holding all of its components, six companies (Apple Inc.
    AAPL,
    +1.21%    ,
    Microsoft Corp.
    MSFT,
    +1.24%    ,
    Amazon, both common share classes of Alphabet Inc.
    GOOGL,
    -1.30%
     
    GOOG,
    -1.26%
    and Berkshire Hathaway Inc.
    BRK.B,
    +0.06%
    ) make up 19.2% of the portfolio.

    That percentage has come down this year, but a lot of risk remains concentrated in a handful of companies. (Apple alone makes up 6.4% of the SPY portfolio. Tesla is now the ninth-largest holding, making up 1.4% of the portfolio.)

    One way to address high concentration in an index fund is to use an equal-weighted approach, which Mark Hulbert recently discussed.

    For the Invesco S&P 500 GARP ETF, the underlying index’s selection methodology has resulted in much less portfolio concentration than we see in SPY, with the top five holdings making up 10.9% of the portfolio.

    Here are the 10 largest holdings of SPGP:

    Company

    		 Ticker

    		 Share of portfolio
    Regeneron Pharmaceuticals, Inc.

    		 REGN,
    +0.15%         		2.49%
    Cigna Corporation

    		 CI,
    +0.39%         		2.26%
    Everest Re Group, Ltd.

    		 RE,
    +0.24%         		2.21%
    Vertex Pharmaceuticals Incorporated

    		 VRTX,
    +1.18%         		1.98%
    D.R. Horton, Inc.

    		 DHI,
    -0.39%         		1.97%
    Expeditors International of Washington, Inc.

    		 EXPD,
    +0.23%         		1.96%
    Incyte Corporation

    		 INCY,
    +0.10%         		1.92%
    Goldman Sachs Group, Inc.

    		 GS,
    -0.51%         		1.83%
    Ebay Inc.

    		 EBAY,
    +1.67%         		1.81%
    Pfizer Inc.

    		 PFE,
    +3.07%         		1.73%
    Source: FactSet

    Click on the tickers for more information about any company, ETF or index in this article.

    You should also read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

    Don’t miss: 10 Dividend Aristocrat stocks expected by analysts to rise up to 54% in 2023

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  • ‘Gaslighters have two signature moves’: Are you being gaslighted at work? Here’s how to recognize the signs.

    ‘Gaslighters have two signature moves’: Are you being gaslighted at work? Here’s how to recognize the signs.

    [ad_1]

    Are you less happy at work since you befriended that new recruit? Have they told you stories about how colleagues have constantly undermined them? Or do you have a boss who excludes you from key meetings — and then asks why you did not attend a meeting even though you are pretty sure you were not invited to begin with? If so, you may be working with a gaslighter.

    Gaslighters, as the name suggests, cast themselves in a positive light — friend or confidante who is here to help — but actually operate much more effectively in the shadows. Merriam-Webster named “gaslighting” the word of the year. Searches for the word on merriam-webster.com surged 1,740% in 2022 over the prior year year, despite there not being an event that the publisher — known for its dictionaries — could point to as a cause of the spike.

    It defines gaslighting as “psychological manipulation of a person usually over an extended period of time that causes the victim to question the validity of their own thoughts, perception of reality, or memories and typically leads to confusion, loss of confidence and self-esteem, uncertainty of one’s emotional or mental stability, and a dependency on the perpetrator.”

    Perhaps the reasons were more personal — or professional — than political. My social media feed is now full of thought pieces on how to spot one of these saboteurs. The comments sections read like the show notes of a True Crime podcast — gruesome yet hard to turn away from. 

    The term was coined in a 1938 play, “Gas Light,” a psychological thriller set in Victorian London and written by Patrick Hamilton.

    The term was further popularized after George Cukor’s 1944 film, “Gaslight,” based on the play, in which Gregory (Charles Boyer) tries to convince his wife Paula (Ingrid Bergman) that she has lost her reason. While he turns on the lights in the attic while searching for hidden jewels, the gaslight flickers in the rest of the house. He tells Paula that she is merely imagining the dimming of the lights.

    The workplace is fertile ground for such behavior, given what’s at stake: money, power, status, promotion, rivalry and the intrigue that often comes with office politics. 

    I’m in the business of helping people work out their conflicts at work. None of this surprises me. In fact, I dedicated a whole chapter in my book, “Jerks at Work,” to gaslighters. 

    “‘For gaslighters, slow and steady wins the race, and the best ones make friends with their victims first.’”

    What has surprised me is how wide-ranging the definition of “gaslighting” has become. Everything from “not respecting personal boundaries” to “talking so much shit about me I couldn’t get hired for two years” seems to fall under the umbrella. 

    What I’ve learned from my doom scrolling is that the word “gaslighter” — probably the worst name to bestow on a colleague or boss — seems to refer to anyone who’s done a whole bunch of bad things to us at work, especially things that involve humiliation. 

    So what really is a gaslighter, and why is it important to distinguish one from, say, a demeaning boss with a chip on their shoulder and a penchant for public shaming?

    If we stick to the clinical definition, gaslighters have two signature moves: They lie with the intent of creating a false reality, and they cut off their victims socially. 

    They position themselves as both savior and underminer, creating a negative and fearful atmosphere, spreading gossip and taking credit for other people’s work. They are often jealous and resentful, and aim to undercut others in order to further their own position.

    You may also be an unwitting pawn in the gaslighting of another colleague. The gaslighter might try to convince you that Johnny is trying to steal your leadership role on a project, and encourage you to freeze him out in the cafeteria at lunch time, or simply be extra wary about sharing important information.

    For gaslighters, slow and steady wins the race, and the best ones make friends with their victims first. For this reason, it could also be considered a form of workplace harassment.

    They often flatter them, make them feel special. Others create a fear of speaking up in their victims by making their position at work seem more precarious than it is. And the lies are complex, coming at you in layers. It takes a long time to realize your status as a victim of gaslighting, and social isolation is a necessary part of this process. 

    “‘It takes a long time to realize your status as a victim of gaslighting, and social isolation is a necessary part of this process.’”

    But there’s a difference between an annoying coworker or micromanaging boss, and a gaslighter, who lies and conspires to undermine your position. “The gaslighter doesn’t want you to improve or succeed — they’re out to sabotage you,” according to the careers website Monster.com. “They will accuse you of being confused or mistaken, or that you took something they said the wrong way because you are insecure. They might even manipulate paper trails to “prove” they are right.”

    Examples cited by Monster.com: “You know you turned in a project, but the gaslighter insists you never gave it to them. You can tell someone has been in your space, moving things around, or even on your computer, but you don’t have proof. You are the only one not included in a team email or meeting invite, or intentionally kept out of the loop. Then when you don’t respond or show up, you are reprimanded.”

    Knowing this, what can you do to prevent yourself from becoming a target? First, recognize that gaslighters don’t wear their strategy on their sleeve. Flattery, making you feel like you’re a part of a special club, or questioning your expertise are not things that raise gaslighting alarm bells. 

    Rather than looking out for mean behavior by a boss or coworker, look out for signs of social isolation. A boss who wants to cut you off from coworkers and other leaders should raise red flags, even if the reason is that “you’re better than them.” 

    Second, recognize that lie detection is a precarious — and from a scientific perspective, almost impossible — business. Don’t try to become a lie detector, instead take notes, so you can put your “gaslighter” on notice that you are wise to their tactics. You can also use the notes as evidence if you decide to later raise the situation with Human Resources. 

    Here are some ways to beat the gaslighter: Send emails with “a summary of today’s meeting” so you can document the origin of ideas and make sure they don’t steal credit from you. Furthermore, document things that happened in person, and share it with your would-be gaslighter. And speak up at meetings. Don’t allow yourself to be browbeaten into submission. 

    The more you document, the more difficult it will be to be victimized. But a word of warning: Don’t try to confront gaslighters — instead, go to your social network to build your reality back up. Trying to beat these folks at their own game is a losing strategy. But these small things, done early in a working relationship, can work wonders. 

    Tessa West is a New York University social psychology professor with a particular interest in workplace behavior, and author of “Jerks at Work: Toxic Coworkers and What to Do About Them.“

    Related stories:

    ‘We’re like rats in a cage’: Sick and tired of their jobs, American workers strive to regain their agency, their time — and their sanity‘

    People are seeking a genuine connection with their colleagues’ — one that goes beyond ‘Hollywood Squares’ Zoom meetings. Not all workers are happy with remote work.‘

    The backlash to quiet quitting smacks of another attempt by the ruling class to get workers back under their thumbs:’ Am I wrong?

    We want to hear from readers who have stories to share about the effects of increasing costs and a changing economy. If you’d like to share your experience, write to readerstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch.

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  • 20 dividend stocks with high yields that have become more attractive right now

    20 dividend stocks with high yields that have become more attractive right now

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    Income-seeking investors are looking at an opportunity to scoop up shares of real estate investment trusts. Stocks in that asset class have become more attractive as prices have fallen and cash flow is improving.

    Below is a broad screen of REITs that have high dividend yields and are also expected to generate enough excess cash in 2023 to enable increases in dividend payouts.

    REIT prices may turn a corner in 2023

    REITs distribute most of their income to shareholders to maintain their tax-advantaged status. But the group is cyclical, with pressure on share prices when interest rates rise, as they have this year at an unprecedented scale. A slowing growth rate for the group may have also placed a drag on the stocks.

    And now, with talk that the Federal Reserve may begin to temper its cycle of interest-rate increases, we may be nearing the time when REIT prices rise in anticipation of an eventual decline in interest rates. The market always looks ahead, which means long-term investors who have been waiting on the sidelines to buy higher-yielding income-oriented investments may have to make a move soon.

    During an interview on Nov 28, James Bullard, president of the Federal Reserve Bank of St. Louis and a member of the Federal Open Market Committee, discussed the central bank’s cycle of interest-rate increases meant to reduce inflation.

    When asked about the potential timing of the Fed’s “terminal rate” (the peak federal funds rate for this cycle), Bullard said: “Generally speaking, I have advocated that sooner is better, that you do want to get to the right level of the policy rate for the current data and the current situation.”

    Fed’s Bullard says in MarketWatch interview that markets are underpricing the chance of still-higher rates

    In August we published this guide to investing in REITs for income. Since the data for that article was pulled on Aug. 24, the S&P 500
    SPX,
    -0.29%
    has declined 4% (despite a 10% rally from its 2022 closing low on Oct. 12), but the benchmark index’s real estate sector has declined 13%.

    REITs can be placed broadly into two categories. Mortgage REITs lend money to commercial or residential borrowers and/or invest in mortgage-backed securities, while equity REITs own property and lease it out.

    The pressure on share prices can be greater for mortgage REITs, because the mortgage-lending business slows as interest rates rise. In this article we are focusing on equity REITs.

    Industry numbers

    The National Association of Real Estate Investment Trusts (Nareit) reported that third-quarter funds from operations (FFO) for U.S.-listed equity REITs were up 14% from a year earlier. To put that number in context, the year-over-year growth rate of quarterly FFO has been slowing — it was 35% a year ago. And the third-quarter FFO increase compares to a 23% increase in earnings per share for the S&P 500 from a year earlier, according to FactSet.

    The NAREIT report breaks out numbers for 12 categories of equity REITs, and there is great variance in the growth numbers, as you can see here.

    FFO is a non-GAAP measure that is commonly used to gauge REITs’ capacity for paying dividends. It adds amortization and depreciation (noncash items) back to earnings, while excluding gains on the sale of property. Adjusted funds from operations (AFFO) goes further, netting out expected capital expenditures to maintain the quality of property investments.

    The slowing FFO growth numbers point to the importance of looking at REITs individually, to see if expected cash flow is sufficient to cover dividend payments.

    Screen of high-yielding equity REITs

    For 2022 through Nov. 28, the S&P 500 has declined 17%, while the real estate sector has fallen 27%, excluding dividends.

    Over the very long term, through interest-rate cycles and the liquidity-driven bull market that ended this year, equity REITs have fared well, with an average annual return of 9.3% for 20 years, compared to an average return of 9.6% for the S&P 500, both with dividends reinvested, according to FactSet.

    This performance might surprise some investors, when considering the REITs’ income focus and the S&P 500’s heavy weighting for rapidly growing technology companies.

    For a broad screen of equity REITs, we began with the Russell 3000 Index
    RUA,
    -0.04%    ,
    which represents 98% of U.S. companies by market capitalization.

    We then narrowed the list to 119 equity REITs that are followed by at least five analysts covered by FactSet for which AFFO estimates are available.

    If we divide the expected 2023 AFFO by the current share price, we have an estimated AFFO yield, which can be compared with the current dividend yield to see if there is expected “headroom” for dividend increases.

    For example, if we look at Vornado Realty Trust
    VNO,
    +1.03%    ,
    the current dividend yield is 8.56%. Based on the consensus 2023 AFFO estimate among analysts polled by FactSet, the expected AFFO yield is only 7.25%. This doesn’t mean that Vornado will cut its dividend and it doesn’t even mean the company won’t raise its payout next year. But it might make it less likely to do so.

    Among the 119 equity REITs, 104 have expected 2023 AFFO headroom of at least 1.00%.

    Here are the 20 equity REITs from our screen with the highest current dividend yields that have at least 1% expected AFFO headroom:

    Company

    		 Ticker

    		 Dividend yield

    		 Estimated 2023 AFFO yield

    		 Estimated “headroom”

    		 Market cap. ($mil)

    		 Main concentration
    Brandywine Realty Trust

    		 BDN,
    +2.12%         		11.52%

    		 12.82%

    		 1.30%

    		 $1,132

    		 Offices
    Sabra Health Care REIT Inc.

    		 SBRA,
    +2.41%         		9.70%

    		 12.04%

    		 2.34%

    		 $2,857

    		 Health care
    Medical Properties Trust Inc.

    		 MPW,
    +2.53%         		9.18%

    		 11.46%

    		 2.29%

    		 $7,559

    		 Health care
    SL Green Realty Corp.

    		 SLG,
    +2.25%         		9.16%

    		 10.43%

    		 1.28%

    		 $2,619

    		 Offices
    Hudson Pacific Properties Inc.

    		 HPP,
    +1.41%         		9.12%

    		 12.69%

    		 3.57%

    		 $1,546

    		 Offices
    Omega Healthcare Investors Inc.

    		 OHI,
    +1.23%         		9.05%

    		 10.13%

    		 1.08%

    		 $6,936

    		 Health care
    Global Medical REIT Inc.

    		 GMRE,
    +2.55%         		8.75%

    		 10.59%

    		 1.84%

    		 $629

    		 Health care
    Uniti Group Inc.

    		 UNIT,
    +0.55%         		8.30%

    		 25.00%

    		 16.70%

    		 $1,715

    		 Communications infrastructure
    EPR Properties

    		 EPR,
    +0.86%         		8.19%

    		 12.24%

    		 4.05%

    		 $3,023

    		 Leisure properties
    CTO Realty Growth Inc.

    		 CTO,
    +2.22%         		7.51%

    		 9.34%

    		 1.83%

    		 $381

    		 Retail
    Highwoods Properties Inc.

    		 HIW,
    +0.99%         		6.95%

    		 8.82%

    		 1.86%

    		 $3,025

    		 Offices
    National Health Investors Inc.

    		 NHI,
    +2.59%         		6.75%

    		 8.32%

    		 1.57%

    		 $2,313

    		 Senior housing
    Douglas Emmett Inc.

    		 DEI,
    +0.87%         		6.74%

    		 10.30%

    		 3.55%

    		 $2,920

    		 Offices
    Outfront Media Inc.

    		 OUT,
    +0.89%         		6.68%

    		 11.74%

    		 5.06%

    		 $2,950

    		 Billboards
    Spirit Realty Capital Inc.

    		 SRC,
    +1.15%         		6.62%

    		 9.07%

    		 2.45%

    		 $5,595

    		 Retail
    Broadstone Net Lease Inc.

    		 BNL,
    -0.30%         		6.61%

    		 8.70%

    		 2.08%

    		 $2,879

    		 Industial
    Armada Hoffler Properties Inc.

    		 AHH,
    +0.00%         		6.38%

    		 7.78%

    		 1.41%

    		 $807

    		 Offices
    Innovative Industrial Properties Inc.

    		 IIPR,
    +1.42%         		6.24%

    		 7.53%

    		 1.29%

    		 $3,226

    		 Health care
    Simon Property Group Inc.

    		 SPG,
    +1.03%         		6.22%

    		 9.55%

    		 3.33%

    		 $37,847

    		 Retail
    LTC Properties Inc.

    		 LTC,
    +1.42%         		5.99%

    		 7.60%

    		 1.60%

    		 $1,541

    		 Senior housing
    Source: FactSet

    Click on the tickers for more about each company. You should read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

    The list includes each REIT’s main property investment type. However, many REITs are highly diversified. The simplified categories on the table may not cover all of their investment properties.

    Knowing what a REIT invests in is part of the research you should do on your own before buying any individual stock. For arbitrary examples, some investors may wish to steer clear of exposure to certain areas of retail or hotels, or they may favor health-care properties.

    Largest REITs

    Several of the REITs that passed the screen have relatively small market capitalizations. You might be curious to see how the most widely held REITs fared in the screen. So here’s another list of the 20 largest U.S. REITs among the 119 that passed the first cut, sorted by market cap as of Nov. 28:

    Company

    		 Ticker

    		 Dividend yield

    		 Estimated 2023 AFFO yield

    		 Estimated “headroom”

    		 Market cap. ($mil)

    		 Main concentration
    Prologis Inc.

    		 PLD,
    +1.63%         		2.84%

    		 4.36%

    		 1.52%

    		 $102,886

    		 Warehouses and logistics
    American Tower Corp.

    		 AMT,
    +0.75%         		2.66%

    		 4.82%

    		 2.16%

    		 $99,593

    		 Communications infrastructure
    Equinix Inc.

    		 EQIX,
    +0.80%         		1.87%

    		 4.79%

    		 2.91%

    		 $61,317

    		 Data centers
    Crown Castle Inc.

    		 CCI,
    +0.93%         		4.55%

    		 5.42%

    		 0.86%

    		 $59,553

    		 Wireless Infrastructure
    Public Storage

    		 PSA,
    +0.19%         		2.77%

    		 5.35%

    		 2.57%

    		 $50,680

    		 Self-storage
    Realty Income Corp.

    		 O,
    +0.72%         		4.82%

    		 6.46%

    		 1.64%

    		 $38,720

    		 Retail
    Simon Property Group Inc.

    		 SPG,
    +1.03%         		6.22%

    		 9.55%

    		 3.33%

    		 $37,847

    		 Retail
    VICI Properties Inc.

    		 VICI,
    +0.81%         		4.69%

    		 6.21%

    		 1.52%

    		 $32,013

    		 Leisure properties
    SBA Communications Corp. Class A

    		 SBAC,
    +0.27%         		0.97%

    		 4.33%

    		 3.36%

    		 $31,662

    		 Communications infrastructure
    Welltower Inc.

    		 WELL,
    +3.06%         		3.66%

    		 4.76%

    		 1.10%

    		 $31,489

    		 Health care
    Digital Realty Trust Inc.

    		 DLR,
    +0.63%         		4.54%

    		 6.18%

    		 1.64%

    		 $30,903

    		 Data centers
    Alexandria Real Estate Equities Inc.

    		 ARE,
    +1.49%         		3.17%

    		 4.87%

    		 1.70%

    		 $24,451

    		 Offices
    AvalonBay Communities Inc.

    		 AVB,
    +0.98%         		3.78%

    		 5.69%

    		 1.90%

    		 $23,513

    		 Multifamily residential
    Equity Residential

    		 EQR,
    +1.46%         		4.02%

    		 5.36%

    		 1.34%

    		 $23,503

    		 Multifamily residential
    Extra Space Storage Inc.

    		 EXR,
    +0.31%         		3.93%

    		 5.83%

    		 1.90%

    		 $20,430

    		 Self-storage
    Invitation Homes Inc.

    		 INVH,
    +2.15%         		2.84%

    		 5.12%

    		 2.28%

    		 $18,948

    		 Single-family residental
    Mid-America Apartment Communities Inc.

    		 MAA,
    +1.83%         		3.16%

    		 5.18%

    		 2.02%

    		 $18,260

    		 Multifamily residential
    Ventas Inc.

    		 VTR,
    +2.22%         		4.07%

    		 5.95%

    		 1.88%

    		 $17,660

    		 Senior housing
    Sun Communities Inc.

    		 SUI,
    +2.12%         		2.51%

    		 4.81%

    		 2.30%

    		 $17,346

    		 Multifamily residential
    Source: FactSet

    Simon Property Group Inc.
    SPG,
    +1.03%
    is the only REIT to make both lists.

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  • ‘We’re headed for a family feud’: My father offered his 3 kids equal monetary gifts. My siblings took cash. I took stock. It’s soared in value — now they’re crying foul

    ‘We’re headed for a family feud’: My father offered his 3 kids equal monetary gifts. My siblings took cash. I took stock. It’s soared in value — now they’re crying foul

    [ad_1]

    Dear Quentin,

    Several years before my father’s death, he offered me and my two siblings each an early “cash gift” from his estate in the amount of whatever the maximum non-taxable amount was at the time. He was an active investor and offered the gift in the form of the stock instead of cash. My siblings took the cash and I decided to take it in stock valued the same as the cash amount.  

    Fast forward five years: My father just passed away and my siblings bought expensive toys and luxury automobiles with their cash, while my stock is worth many times what it was when it was given to me. His will states that the three of us should share in equal parts of his estate, but my siblings are arguing that my now very valuable stock should be included as an asset to be split among the estate.

    Legally, they have no leg to stand on, but both are insistent that I’m taking money that is morally theirs. There’s no changing their mind and I’m convinced that we’re headed for a family feud. I’m not sure what I should do. Had the stock value gone to zero in that time, they wouldn’t be arguing that I should get extra to compensate for my “bad gamble.”

    The Other Brother

    Dear Other Brother,

    Them’s the breaks — in this case, the sudden screeching of car brakes.

    Your siblings could have chosen stocks over cash, but they wanted immediate gratification. That was their decision, and they are going to have to take ownership of their choice and live with it. Buying stocks are more likely to pay off if you hold on to them over the long term. You did just that. Instead of buying a Ferrari or a Tesla
    TSLA,
    -0.19%    ,
    you effectively chose to invest your gift.

    Show the same certainty now, and don’t cave to your siblings’ demands. Don’t allow them to bully you into selling.

    Investing is all about delaying your gratification — the ability to live for today and save for a more comfortable tomorrow, as opposed to having everything today and to hell with tomorrow. The gamification of stock trading with apps such as Robinhood
    HOOD,
    -0.74%    ,
    which has extended its trading hours beyond the market’s official hours, is in part about getting that dopamine hit. (However, trading after hours comes with risks — chief among them warped stock prices.)

    This dispute is about choice. If you had taken the cash, those stocks would still be part of your father’s estate, but you made the choice to take the stock. Your siblings had the same option and chose not to exercise it. Tell them, “I know it must be frustrating for you, but we all had the same opportunity. I took it. You took the cash.”

    There is only one reason they missed out — and if they look in the rearview mirror of their respective luxury cars, they will see that reason staring right back at them.

    You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

    Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

    The Moneyist regrets he cannot reply to questions individually.

    By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

    More from Quentin Fottrell:

    • My girlfriend says I should tip in restaurants. I say waitstaff are just like construction and fast-food workers. Who’s right?
    • ‘He was infatuated with her’: My brother had a drinking problem and took his own life. He left $6 million to his former girlfriend who used to buy him alcohol
    • ‘She had a will, but it was null and void’: My friend and her sister are fighting over their mother’s life-insurance policy and bank account. Who should win out?

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  • ‘There are plenty of storm clouds on the horizon’: 5 things not to buy on Black Friday

    ‘There are plenty of storm clouds on the horizon’: 5 things not to buy on Black Friday

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    It’s a year for shopping prudently.

    Americans will spend between $942.6 billion and $960.4 billion this holiday season, according to projections from the National Retail Federation. That’s up from last year when holiday sales hit a record $889.3 billion, the trade association said.

    However, people are not willing to go as crazy this Black Friday compared to previous years: that 6% to 8% year-over-year growth expectation is slower than the 13.5% annual increase in holiday season spending in 2021 when consumers had pandemic-era government benefits to spend.

    Once again, millions of people will also be shopping from the comfort of their home and avoiding the Black Friday crowds. Online and other non-store sales are predicted to rise 10% to 12% (to between $262.8 billion and $267.6 billion).

    “People have reason to be concerned about their spending. ”

    “The economy is probably doing better than it feels right now, but that’s not true for everyone of course,” said Ted Rossman, senior industry analyst at Bankrate.com. “There are plenty of storm clouds on the horizon.” He cited rising interest rates, 40-year high inflation and tech layoffs. 

    People have reason to be concerned about their spending. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — fell to 3.3% in the third quarter from 3.4% in the prior quarter, the government said last month. 

    Despite a strong labor market and unemployment hovering at 3.7% in October, Rossman said, “it still seems like a recession is likely in 2023, although the best guess is that it will be a mild one.”

    So what should you not buy this Black Friday? Quite a lot, if you don’t believe in living large. Here are 5 things to think about avoiding:

    — Quentin Fottrell

    Tech accessories

    For tech accessories — like earbuds and headphones — waiting until December may be a better way to score better deals, added Ryan McGonagill, director, industry research at Savings.com, another site that aggregates discounts.

    The most popular electronic products like Apple AAPL iPads, MacBooks and iPhones have scant Black Friday deals. “For a limited time, get an Apple Gift Card to use on a later purchase when you buy an eligible iPhone, Apple Watch, Mac, AirPods, and more,” according to Apple’s Black Friday offer.

    Computer makers and retailers, however, are coming off the work-from-home boom and may have inventory they need to thin before year’s end. Holiday discounts on computers, at least through October, were at 10% off the base price, according to analysis from Adobe
    ADBE,
    +2.92%    .
     

    The software and analytics provider said computer discounts could go much steeper, up to 32% off the base price before the end of the year. Cyber Monday could be the best day for bargains on computers, Adobe said, but computer deals may stick around for the rest of 2022.

    Pay attention to early deals, if you desperately need a new laptop. “Many retailers offer the same pricing on Black Friday and Cyber Monday,” said Kristin McGrath, editor at RetailMeNot.com, a site that promotes deals. “So start looking on Black Friday and use Cyber Monday as a second chance to snag what you missed.”

    — Andrew Keshner

    Seasonal items

    Winter wear is usually not going to be on sale before Christmas, so it’s best to shop for your puffy jackets and snow boots in the New Year, if you can. The same goes for white linen, tools and holiday decorations, said Charles Lindsey, associate professor in the Marketing School of Management at the University at Buffalo.

    Most stores put their coats, hats, scarves and flannel pajamas on sale — with discounts on big-name brands of 50% or more in January — to make room for their spring collections. Similarly, buy summer clothes in the fall and winter. 

    “The best time to buy holiday decor is immediately after said holidays,” according to DealNews, a site offering shopping advice. “After Christmas sales are generally your best bet for snagging deeply discounted ornaments, lights, and inflatables in order to be well prepared for next year.” 

    Fashion-conscious shoppers inclined to snap up discounted items may want to practice patience on Black Friday. Apparel may have even deeper discounts after the holidays. If you feel compelled to buy something new to wear to the office party, invest in quality pieces. Fast fashion has a cost: It has contributed to a waste crisis, in part because such items are not meant to last very long in your closet.

    But that does not mean you should not keep your eyes peeled for some seasonal goods on Black Friday. Walmart
    WMT,
    +0.34%    ,
    for instance, is pushing out the boat early with some discounts on toys, including hoverboards, bicycles, remote-control cars, and karaoke machines. Similarly, Kohl’s
    KSS,
    +4.17%
    has discounts on a range of doll’s houses.

    — Quentin Fottrell and Emma Ockerman

    Appliances and white goods

    There might be tempting Black Friday deals on appliances, mattresses and furniture. Discounts on appliances may reach up to an 18% from the base price, Adobe said. Still, “you’re going to get another shot at them during New Year’s Eve sales and again during Presidents Day sales in February,” McGrath said.

    If Black Friday is “too chaotic …you’ll have plenty of opportunities to save,” she added. Department stores usually run very attractive discounts on houseware in the days following Christmas. “Stores know they’ll be getting a lot of traffic with so many people returning gifts — and hope to convince shoppers to make an impulse self-gifting purchase or two,” McGrath said.

    If you can’t wait, Costco
    COST,
    +1.64%
    is already rolling out deals on white goods and appliances, including $70 off a Sonos
    SONO,
    +1.87%
    WiFi speaker. However, Consumer Reports cautions consumers against falling for big deals without checking out the reliability of the brand first, as you could end up paying more in repairs down the road. 

    You might be tempted by offers and rebates on matching kitchen suites — typically a refrigerator, range, dishwasher, and microwave — from the same maker,” Consumer Reports said. “But price is only part of the equation when you’re purchasing appliances. Reliability is key, and it can vary within a brand’s offerings.”

    — Andrew Keshner

    Fitness equipment

    One of the best times to buy exercise equipment is around the New Year, when people are making resolutions to improve their health, said Regina Conway, who researches sales and promotions for Slickdeals, a site that tracks retail discounts.

    When you make your purchase, think twice before buying equipment that runs on proprietary technology, like Peloton
    PTON,
    -1.13%
    or Lululemon’s
    LULU,
    +1.79%
    Mirror exercise products, mainly because the at-home fitness boom faces an uncertain future post-pandemic, Conway noted.

    However, this Black Friday is a little different than previous years, and there are some deals in categories that traditionally don’t have good Black Friday discounts, including exercise equipment. “This year we’re seeing strong Black Friday deals from industry stalwarts like NordicTrack,” Conway said.

    Peloton Interactive, which is facing a challenging time since people are no longer stuck at home due to the pandemic, is currently offering $600 off this fitness bike package. However, consumers will still have to fork over $2,195 for the machine and exercise regime.

    “We think consumers are likely to continue to prefer out-of-home experiences in the near-term and believe Peloton is still working through pandemic pull-forward,” Cowen & Co. analyst John Blackledge wrote in an analyst note on Tuesday, citing “limited visibility” on Peloton’s fiscal 2023 performance.

    — Leslie Albrecht and Quentin Fottrell

    Big-ticket items like TVs 

    Does Amazon
    AMZN,
    +0.80%
    founder Jeff Bezos have a point about the dangers of splurging this year? In something of a Black Friday surprise, Bezos offered some shocking spending tips as Americans gear up for the holiday shopping season — amid four-decade-high inflation. Or, to be more accurate, he offered tips on what not to spend your money on.

    ‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table,” Bezos said in a recent interview on CNN
    WBD,
    +2.27%    .
    The remarks drew a significant amount of scorn on social media, with some critics advising people to avoid shopping on Amazon too.

    About those TVs: “They’re normally not going to be a high-end TV brand,” Lindsey said. “It will be a lower to mid-tier brand. Companies utilize these TVS as doorbusters to get people in the store and people clicking on their website. You’re probably better off shopping around the Superbowl in late January.”

    Rossman said consumers are becoming more judicious about their Black Friday splurging. “People seem to be pulling back on some big-ticket purchases,” he told MarketWatch. “For example, sellers of appliances, electronics and furniture all posted disappointing results in the most recent retail sales report.”

    “Yet discretionary sectors such as travel and dining are seeing sharp increases in spending,” he added. “I think the main explanation is pent-up demand. People are prioritizing experiences over things right now, largely due to the pandemic. There was also a pull-forward in demand for many physical goods the past couple of years as many out-of-home activities were curtailed.”

    — Quentin Fottrell

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