investment

Reviewed by Margaret James
Fact checked by Suzanne Kvilhaug

Walt Disney (DIS) is one of the most successful companies in one of the most powerful sectors of any economy: entertainment. Before it became the empire it is today, Disney was more closely associated with the vision of the man after whom it was named. It was this vision that laid the groundwork for the company to become the media giant it is today.

In this article, we’ll look at the rise of Walt Disney – both the man and the company – and why Disney was so successful. No doubt, his life can teach entrepreneurs lessons even today.

Key Takeaways

• Walt Disney – the man and the company – is one of the most successful and powerful entertainment companies in the world, with a market cap of $187 billion.
• Only by constantly innovating and pushing the boundaries of both animation and business, was the company able to go from a moderately successful animation studio to a complete entertainment experience – with theme parks, merchandising, cruise ships, and more.
• After its acquisition of 21st Century Fox in March 2019, Disney became the largest media powerhouse on the planet.

Setting Forth, Again and Again

Like many creative talents, Walt Disney started his career working for others. In 1919, Walt was back from driving for the American Ambulance Corps in World War I and looking for work as an artist. He found it at Pesmen-Rubin Commercial Art Studio, where he met and befriended Ubbe Iwwerks. Iwwerks proved to be one of the most talented animators in the world and a key to Walt’s later success.

At the start of 1920, Walt and Iwwerks were both out of a job, so they tried to open up their own studio. This first business promptly failed and the pair left for paying work, doing animation at Film Ad Co., where they worked on the advertising shorts that were shown before the features. Before too long, they were working together on side projects that grew into Laugh-O-Grams, a series of comedic shorts. Walt and Iwwerks set forth together again and turned Laugh-O-Grams into a business. However, once again, the venture ended belly-up in 1923, after which time Walt left for Hollywood.

The Disney Brothers

Perhaps Walt’s least appreciated skill was convincing others to buy into his vision. In Hollywood without Iwwerks, Walt convinced his brother Roy to help him start Disney Brothers Studio, later renamed Walt Disney Studio. Sure enough, Walt soon had Iwwerks, who was no spelling his name Iwerks, convinced to come back to work with him, as well.

Walt Disney Studio was no more profitable than the previous incarnations, but it was staying afloat. The company was doing work for Universal Pictures, creating a character called Oswald the Lucky Rabbit. In 1928, Walt and Roy had the unpleasant surprise of finding out that all of their animators, with the exception of Iwerks and a few others, had been hired away by one of the people he was dealing with at Universal. To add salt to the wound, the rights to Oswald belonged to Universal.

The experience embittered Walt and made him swear to only work for himself. Walt began looking to deliver his films directly to distributors, but he needed a new character.

The Mouse

There is some controversy over where Mickey Mouse came from; theories range from a wastepaper basket in Kansas to Iwerks flipping through animal photos and sketching. However he originated, Mickey Mouse represents the start of Disney as we now know it.

Walt assembled a new team to work with Iwerks on this new character. The first two films were not hits, but the third, “Steamboat Willie,” was a huge success. It was also the finest early example of a film that synchronized sound and animation.

Being on the cutting edge of technology became par for the course, as the company pushed the boundaries of animation. The next decades, including the Great Depression, saw Disney create the first color cartoons, as well as the first animated feature-length film, “Snow White and The Seven Dwarfs.”

Disney’s IPO

The costs of these groundbreaking films were so high, and the margins so low, that a poor box office could still sink the studio. Walt and Roy started 1940 with great films, but a lot of debt. From 1923 to 1938, the Disney Brothers partnership was actually split into four companies that were successful in varying degrees, before being absorbed into one in 1938.

The company name that lived on was Walt Disney Productions and, on April 2, 1940, Walt Disney Studios issued 155,000 shares of 6% convertible preferred stock. This issue was in the over-the-counter market and raised around $3.875 million for the company.

The brothers soon found themselves back in debt, however, as the box offices continued to be slack for films that we now consider masterpieces, namely “Bambi,” “Fantasia,” and “Cinderella.” This isn’t to say they weren’t successful, they were just very expensive to make.

Instead of slowing down, Walt looked to do more. The brothers set up their own distribution company, Buena Vista, and began producing high-margin nature documentaries. Walt also began to have visions of the ultimate amusement park, but it was a gamble his company couldn’t afford. Still, little by little, Walt diversified the history of Disney adding business units to its core animation studio.

Disneyland

In order to create the “happiest place on earth,” a lot of financial maneuvering needed to take place, and Walt made it happen. Even after funding a private company, using a loan from his own life insurance, Walt needed much more capital. He had himself to offer, but he was clever about it. Walt set up another private company that owned the merchandising rights to his name. Incidentally, Walt Disney Productions paid $46.2 million in shares to buy the company back, in 1981.

He then offered to create a TV series for a TV network that would invest in Disneyland; ABC jumped at the chance. Walt had his funding and ABC had a show that turned into a cultural phenomenon, watched by millions. Originally named “Disneyland,” but wearing different titles over the years, the show ran for 29 years.

In 1955, Disneyland finally opened and became a huge success. Over the next five years, Walt Disney Productions purchased Disneyland by buying Walt’s private company. Over these same five years, the gross income at Walt Disney Productions, which had been at $6 million in 1950, grew from $27 million to $70 million.

Merchandising, branding, and expansion were all coming together for Walt Disney Productions. Sadly, though, it was destined to go on without one of its founders, as Walt died in 1966. One of his last features, “Mary Poppins,” was the top-earning film in 1964. His brother Roy took over.

Beyond Walt and Roy

After the death of Walt and his brother Roy, Disney struggled. The company was listed in 1957, and despite its past successes and several profitable theme parks, the rise in its stock price was nominal.

In the 1980s, the company was thought to be so undervalued in terms of brand assets, which included the film catalog and the theme parks, that hostile takeover artists began circling. The company fended off the takeovers and began to focus on profiting from its vast brand equity.

From the 1980s to the 1990s, the stock grew in leaps and bounds, making Disney the largest entertainment empire in the world. The company has continued to prosper and grew to be a favored dividend-paying investment. This growth was helped in no small part by the foundation that Walt and Roy laid for the company.

Modern Day Disney

Over the years, The Walt Disney Company has navigated a rapidly changing media landscape, adapting its business strategy to shifting consumer habits and industry challenges. As streaming became the dominant force in entertainment, Disney positioned itself at the forefront through Disney+, ESPN+, and Hulu.

Beyond streaming, Disney has strengthened its position through its theme parks, experiences, and consumer products. Disney has continued investing in expansion, immersive storytelling, and new attractions at its theme parks around the world. The cruise line business also saw growth as Disney introduced new ships (now up to 7 cruise ships).

Disney’s leadership has also undergone notable changes, with a renewed focus on efficiency and strategic decision-making. The return of CEO Bob Iger marked a pivotal moment, as he spearheaded initiatives to streamline operations, reduce costs, and refocus the company’s creative efforts.

Iger has publicly stated the company’s strategic initiatives and financial outlook. He’s discussed priorities such as achieving sustained profitability in streaming, evolving ESPN into a leading digital sports platform, enhancing film studio output, and expanding the Experiences sector. He also expressed confidence in the streaming business reaching and maintaining profitability, with the integration of Hulu content into Disney+ expected to boost engagement and reduce subscriber churn.

How Many Theme Parks Does Disney Have?

Disney operates 12 theme parks across six resorts worldwide: Disneyland Resort (California), Walt Disney World Resort (Florida), Disneyland Paris, Tokyo Disney Resort, Hong Kong Disneyland, and Shanghai Disney Resort.

Who Founded Disney?

The company was founded in 1923 by brothers Walt and Roy O. Disney as the Disney Brothers Studio, which later became The Walt Disney Company.

What Streaming Services Does Disney Own?

Disney owns Disney+, ESPN+, and a majority stake in Hulu.

What Is The Disney Vault?

The Disney Vault was a marketing strategy where Disney would periodically release animated classics on home video for a limited time before discontinuing them. With Disney+, most of these films are now always available for streaming.

The Bottom Line

Financial history is full of outsized personalities and towering figures. Many of the richest people in history got there by building empires of fur, oil, steel, rails, and, yes, software. All of these are tangible products with a simple formula: keep the costs down and sell more. Disney, the man and the company, were birds of a different feather.

Only by constantly innovating and pushing the boundaries of not just animation but also what Disney became as a business was the company able to go from a moderately successful animation studio to a complete entertainment experience – with theme parks, merchandising, cruise ships, and so forth.

In a quote often attributed to Walt Disney, a Disney Imagineer once said, “If you can dream it, you can do it.” The story of Walt’s life and the creation of his company reminds us that once you dream it, you must continually re-dream and re-imagine it to succeed.

They can provide income for life, though often at a high price

Reviewed by Charlene Rhinehart
Fact checked by Amanda Jackson

Insurance agents and financial advisors have been investing their clients’ retirement money in annuities for decades. This practice has its detractors, with the criticism usually focusing on the high commissions paid to annuity salespeople and stiff fees charged to annuity owners year after year. In fact, when comparing the costs of an annuity versus a mutual fund, there can be a big difference, with a mutual fund being less expensive. It pays to know the details about annuities before you invest.

Here’s a rundown of the pros and cons of annuities, compared with other ways to invest for retirement.

Key Takeaways

• Annuities can provide a reliable income stream in retirement, but if you die too soon, you may not get your money’s worth.
• Annuities often have high fees compared to mutual funds and other investments.
• You can customize an annuity to fit your needs, but you might need to pay more or accept a lower monthly income.

How Annuities Work

An annuity is a contract between an individual and an insurance company. The investor contributes a sum of money—either all up-front or in payments over time—and the insurer promises to pay them a regular stream of income in return.

With an immediate annuity, that income begins almost right away. With a deferred annuity, it starts at some point in the future, typically during retirement. The dollar amount of the income payments are determined by such factors as the balance in the account and the age of the investor.

Annuities can be structured to pay income for a set number of years, such as 10 or 20, or for the life of the annuity owner. When the owner dies, any money remaining in the account typically belongs to the insurance company; however, if they live happily to, say, 120 years old, the insurance company still has to keep those regular payments coming.

Annuities can also be fixed or variable. In a fixed annuity, the insurance company pays a specified rate of return on the investor’s money. In a variable annuity, the insurer invests the money in a portfolio of mutual funds, or “subaccounts,” chosen by the investor, and the return will fluctuate based on their performance.

Pros

• Guaranteed income

• Customizable features

• Money-management assistance

Cons

• High commissions

• High fees

• Surrender charges

The Pros of Annuities

Despite the criticisms, annuities do offer some advantages for investors who are looking toward retirement.

Guaranteed Income

The insurance company is responsible for paying the income it has promised, wether for a finite period or the rest of the person’s life, however, that promise is only as good as the insurance company behind it. This is one reason investors should only do business with insurers that receive high ratings for financial strength from the major independent ratings agencies.

Customizable Features

Annuity contracts can often be adapted to match the buyer’s needs. For example, a death benefit provision can ensure that the annuity owner’s heirs will receive at least something when the owner dies.

A guaranteed minimum income benefit rider promises a certain payout regardless of how well the mutual funds in a variable annuity perform. A joint and survivor annuity can provide continued income for a surviving spouse. All of these features come at an additional price, however.

Money-Management Assistance

Variable annuities may offer a number of professional money-management features, such as periodic portfolio rebalancing, for investors who’d rather leave that work to someone else.

The Cons of Annuities

High Commissions

When it comes to the commissions made for selling annuities versus mutual funds, the former is almost always higher than the latter. Say an investor rolls a $500,000 balance in a 401(k) into an individual retirement account (IRA). If the money is invested in mutual funds, the financial advisor might make a commission of about 2%. If it is invested in an annuity that holds the same or similar mutual funds, the advisor could make a commission of 6% to 8% or even higher.

Therefore, a $500,000 rollover into mutual funds would pay the advisor a $10,000 commission at most, while the same rollover into an annuity could easily pay the advisor $25,000 to $35,000 in commission. Not surprisingly, many advisors will direct their clients into the annuity.

High Fees

Most annuities do not assess sales charges upfront. That may make them look like no-load investments, but it doesn’t mean they don’t have plenty of fees and expenses.

Annuity contracts impose annual maintenance and operational charges that often cost considerably more than the expenses associated with comparable mutual funds. This has been changing somewhat in recent years, and some insurers are now offering annuities with comparatively low annual expense ratios. Still, as always, investors should scrutinize the fine print before they sign.

Surrender Charges

If an annuity owner needs to get money out of the annuity before a certain period of time has elapsed (typically six to eight years, but sometimes longer), they may be subject to hefty surrender fees charged by the insurer.

No Added Tax Benefits for IRAs

Annuities are tax-sheltered. The investment earnings grow tax-free until the owner begins to draw income. If the annuity is a qualified annuity, the owner is also eligible for a tax deduction for the money they contribute to it each year.

A traditional IRA or 401(k) has the same tax benefits—and if it’s invested in conventional mutual funds, it’s typically at a much lower cost. Placing an annuity in a 401(k), as investors may be urged to do by some salespeople, is redundant and needlessly expensive.

Important

If you’re planning to buy an annuity, make sure you’re dealing with a financially solid insurance company that’s likely to be around—and able to make good on its promises—when you start drawing income.

A Compromise Solution

One practical option for investors is to stick with mutual funds until retirement and then move some of their money into an annuity, especially one with a downside protection rider. That keeps the fees to a minimum during the investor’s working years but guarantees a steady income in retirement.

Can You Lose Money With Annuities?

You can’t lose money with annuities in the traditional sense that you can with other investments tied to the market. You can, however, lose money on annuities if the insurance company that issued the annuity goes out of business and defaults on its obligation. There is a degree of regulatory protection for investors in case this happens.

Why Are Annuities a Poor Investment Choice?

Annuities are considered poor investments for many reasons. Depending on the annuity, these include a variety of high fees, with little to no interest earned, an inability to keep up with inflation, and limited liquidity.

What Is Better Than an Annuity for Retirement?

There are a variety of options that are better than an annuity for retirement, depending on your financial situation and goals. These include deferred compensation plans, such as a 401(k), IRAs, dividend-paying stocks, variable life insurance, and retirement income funds.

The Bottom Line

Though annuities are one of the most established retirement savings options, they aren’t necessarily for everyone. Annuities work for people who are looking for simple, fixed payments—and who don’t mind the disadvantages, such as high fees.

When considering an annuity, make sure to pay attention to all of the details in the contract. Evaluate all of the pros and the cons.

Reviewed by Robert C. Kelly
Fact checked by Kirsten Rohrs Schmitt

A severance package is compensation a company offers to employees who face layoffs. It can include money and other benefits, such as continuing insurance coverage, job placement assistance, or a performance bonus.

A severance agreement, signed by the employee, outlines the financial terms on which the employee will leave the company.

Key Takeaways

• A severance package can include payment, continuation of insurance coverage, and job placement assistance.
• A severance agreement defines the financial terms for an employee when their employment is terminated.
• Severance packages are not required by law, but employers tend to offer them as gestures of goodwill or to be competitive in their industries.

What’s Included

• Severance Pay: Employers may offer one to weeks of severance pay for every year the employee worked for the company. Middle managers and executives may receive a higher amount. A considerable lump-sum severance payment could push the employee into a higher tax bracket.
• Insurance Coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) guarantees temporary group health coverage, typically for 18 months, for employees, former employees, spouses, and dependent children when health coverage is lost due to a layoff. However, most former employees must pay the employer’s portions of the premium with the amount they paid while employed.
• Job Placement or Training: Many employers provide outplacement services, one-on-one counseling, or retraining opportunities.
• Unemployment Insurance: Employees commonly contribute to an unemployment insurance fund through their pay. The Federal-State Unemployment Compensation Program provides temporary financial assistance for unemployed workers. The taxable benefits usually last around 26 weeks, but a state may extend them when unemployment is high.

Important

Federal and state laws in the U.S. do not mandate severance pay. According to the U.S. Department of Labor, “severance pay is a matter of agreement between an employer and an employee.”

Prepare and Negotiate

Employees facing a layoff often have a termination meeting with a manager or company representative to discuss and sign the severance agreement and are allowed time to review the information. They should create a list of benefits they’d like to receive and, if necessary, negotiate. Employees may even research to find out what former colleagues have received. Some negotiation strategies include:

• Hire a Lawyer: Employees may consult an attorney if there is evidence of discrimination, if the language in the package is too complicated or broad, or if the agreement is extensive. The lawyer can validate state laws governing severance agreements and if there are specific stipulations regarding timing and payment amounts.
• Negotiate Payment: Employees may talk to the local placement and recruitment agencies to determine how long it may take them to get a new job at the same level and salary. The right severance package can ease a laid-off worker’s transition to a new job, relieve stress, and provide some financial cushion.
• Negotiate Benefits: Employees can ask if the company can cover life insurance and disability income insurance premiums if they were offered during employment after the layoff. Although employees will have access to COBRA, they can negotiate with the employer for covered health care premiums after the layoff.
• Perks: Employees may be able to keep or buy used company equipment, such as a laptop. Have the employer acknowledge this in writing. Some other perks to consider negotiating include extending an employee’s use of the company car or a company-sponsored health club membership.

Warning

When rumors of layoffs are circulating, employees may be tempted to quit. Quitting prevents employees from claiming unemployment insurance and receiving a severance package.

Retirement Plans After a Layoff

What happens to an employee’s retirement plan or pension plan varies by employer. The outcome of a 401(k) depends on how much money the employee had in the account and if the employee was vested when the layoff occurred. A vested balance is a combination of an employee’s contributions plus the contributions of the employer that cannot be taken back when the employee leaves.

Employees can cash out their balances, leave the money in the account without further contributions, or roll over the money into an Individual Retirement Account (IRA) that the employee controls.

In a defined pension plan scenario, an employer may end the pension agreement and offer the employee an annuity from an insurance company or issue a lump-sum payment for the entire benefit.

What Laws Regulate Severance Packages?

Severance packages are usually calculated based on an employee’s length of service with the company. Employers are not required by law to offer severance packages to laid-off workers.

What Happens When a Lay Off Includes Multiple Workers?

Employees facing a group reduction-in-force may or may not have more opportunities to negotiate the terms within the agreement. A standardized package may be offered in a mass layoff, and an employer is less likely to deviate from this contract. Still, numbers carry weight, and employees can band together to ask for a revision in terms.

Why Should Employees Negotiate a Severance Package?

Employees should attempt to negotiate a severance package. This may help increase the severance pay, alleviate health care costs after the layoff, or extend the employee’s termination date.

The Bottom Line

A severance package offers compensation and other benefits to laid-off employees. Individuals should research company policies to maximize their severance pay and benefits. An employment law attorney may be able to advise employees or help decipher lengthy paperwork.

Reviewed by Anthony Battle

The Thrift Savings Plan (TSP) offered to all U.S. government employees is one of the simplest and most efficient retirement plans in use today. But while thousands of civilian and military employees defer a portion of their earnings into the plan each year, many participants do not understand the actual fund options available or are unsure which funds are appropriate for them.

This article breaks down the five core investment funds available in the TSP along with the Lifecycle funds and their proper use.

Key Takeaways

• Thrift Savings Plans (TSPs) are direct-contribution retirement plans offered to U.S. government employees.
• Similar to the 401(k) plans offered by private-sector employers, TSPs offer five core mutual funds to invest in, four of which are diversified index funds.
• Each index fund specializes in a different asset class or market segment, such as U.S. equities, international equities, and corporate bonds.
• The fifth core fund, the G Fund, invests in very low-risk, low-yield government bonds and guarantees principal protection to investors. The G Fund is intended for very conservative investors.
• A Lifecycle (L) Fund serves as the default fund for new plan participants who don’t specify a contribution allocation when they make their contribution.

Core TSP Funds

The five core funds offered in the Thrift Savings Plan loosely cover the basic range of publicly traded debt and equity securities. All five funds are managed by Blackrock Capital Advisers and State Street Global Advisors and are available only to TSP participants. None of them trade on any public exchange, although Blackrock does offer publicly traded equivalents of some TSP funds through iShares, its subsidiary company, which offers a comprehensive range of ETFs.

Four of the five funds are index funds, which hold securities exactly matching a broad market index. The money participants place in the F and C Funds is invested in separate accounts, while the S and I Fund monies are invested in trust funds commingled with other tax-exempt pension and endowment funds.

All of the funds, except for the G Fund, are 100% invested in their respective indexes, and they do not take into account the current or overall performance of either the specific index or the economy as a whole. Each TSP fund’s share price is calculated daily and reflects investment returns minus administrative and trading costs. The five funds are broken down below.

Government Securities Investment Fund (G Fund)

This is the only core fund that does not invest in an index. The G Fund invests in a special non-marketable treasury security issued specifically for the TSP by the U.S. government. This fund is the only one in the TSP that guarantees the return of the investor’s principal.

This fund thus has the lowest risk of the five funds, and, until Sept. 15, 2015, money contributed into the TSP by new plan participants was placed into this fund by default unless the participant specified otherwise (as of that date, the default investment fund changed to the Lifecycle (L) Fund most appropriate for the participant’s age). It pays an interest rate based on nonmarketable short-term treasury securities with a maturity of 4 years or more.

The G Fund has historically provided the lowest rate of return of any of the core funds.

Fixed-Income Investment Index Fund (F Fund)

This fund represents the next step up the risk/reward ladder in the TSP. This index invests in a wide range of debt instruments, including publicly traded treasury and government agency securities, corporate and non-corporate bonds, and asset-backed securities (ABS).

This fund also pays monthly interest typically exceeding that paid by the G Fund. However, it does not guarantee the return of the investor’s principal. The BlackRock iShares equivalent ETF is the iShares Core U.S. Aggregate Bond Market ETF (AGG).

Common Stock Index Investment Fund (C Fund)

This fund is the most conservative of the three stock funds available in the TSP. The C Fund invests in the 500 large and mid-cap companies that comprise the Standard and Poor’s 500 Index. This fund has experienced greater volatility than either the G or F Funds and has posted commensurately higher returns over time. The BlackRock iShares equivalent ETF is the iShares Core S&P 500 (IVV).

Small-Capitalization Stock Index Fund (S Fund)

The S Fund holds the same securities as the Dow Jones U.S. Completion Total Stock Market Index. This index is composed of almost 4,000 companies and “designed to measure all U.S. equities with readily available prices.”

As the fund name indicates, these companies are smaller and less established than the S&P 500 companies and have greater potential for growth than those in the C Fund. The S Fund is considered one of two funds with the greatest risk in the TSP. It has outperformed the C Fund with proportionately greater volatility over time.

The BlackRock iShares has no exact S Fund equivalents. Those who wish to duplicate this fund outside the TSP could use the following four funds to cover many of the companies in the S Fund (and some that are not):

• iShares Russell Midcap ETF (IWR)
• iShares Russell 2000 Index ETF (small caps only) (IWM)
• iShares Core S&P Total U.S. Stock Market ETF (ITOT)
• iShares Russell 3000 ETF (IWV)

International Stock Index Investment Fund (I Fund)

This fund invests in securities mirroring the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index. This is one of the broader international indexes investing in larger, more established companies located in 21 developed countries around the world. It is regarded as the other high-risk fund in the TSP and has historically posted a higher average annual return than the C Fund.

This fund is the only one in the TSP that invests in companies outside the U.S. The BlackRock iShares equivalent ETF is the iShares MSCI EAFE ETF (EFA).

Important

New plan participants who don’t feel qualified or neglect to designate an asset allocation for their contributions can feel confident that the default Lifecycle (L) Fund that they’re assigned will invest their money in an allocation that’s appropriate for their age and years until retirement.

Lifecycle Funds (L Funds)

The Lifecycle funds are composite funds that invest in a combination of the five core funds and act like target-date funds by nature. They function as “automatic pilot” funds for participants who do not wish to make their own asset allocations. They invest primarily in the stock funds when they are issued and are then slowly reallocated by the fund managers into the two bond funds every 90 days until they mature.

The L Income fund’s asset allocations include 77% invested in the bond funds, and the remaining 23% divided between the three stock funds.

Participants should take care to match the maturity date of the L Fund they choose with the time they actually begin receiving distributions, instead of when they merely separate from government service. Each is designed to provide income for those who will begin taking distributions within five years of the maturity date.

They also offer the best possible mix of growth versus reward during both the growth and income phases of each fund. The L Income Fund can be used by those who have already retired and need a conservative stream of income at the present time.

Role as Default Fund

Since Sept. 15, 2015, an age-appropriate L Fund has been the default fund for new civilian TSP participants as well as the spouse beneficiaries of civilian participants who have passed away. An age-appropriate default L Fund is assigned unless the new participant/beneficiary specifies an allocation when they make their contribution to the plan. The retirement age of 63 is used to determine which L Fund is selected for a participant.

TSP Investment Programs

Although the L Funds provide one avenue of professional portfolio management for TSP participants, some privately managed TSP investment programs may provide additional clout for aggressive investors. Tsptalk.com offers several levels of market-timing strategies, and TSPCenter.com provides additional commentary and ideas. 

Those who seek higher returns and are willing to take on additional risk can search online for other proprietary market-timing strategies that may beat the indexes over time. Of course, many of these programs charge a quarterly or annual fee for their services, and they cannot guarantee their results.

The Bottom Line

The Thrift Savings Plan offers participants the options of growth, income, and capital preservation. The annual investment expenses in this plan are among the lowest in the industry, and all of the funds are fully transparent. There are no hidden fees in this plan, and participants should think carefully before rolling their plan assets elsewhere when they retire.

These are the top AI stocks based on best value, fastest growth, and most momentum.

March saw a slew of major developments in the artificial intelligence (AI) space. OpenAI projected its revenue will reach $12.7 billion in 2025 and exceed $125 billion by 2029. However, the private company cautioned that it does not expect to be cash-flow positive for the next four years. While OpenAI remained bullish on the industry’s prospects, Microsoft (MSFT) took a more cautious stance, canceling two gigawatts of data center projects in the U.S. and Europe due to lower demand projections. The move came just ahead of the initial public offering (IPO) of CoreWeave, a leading high-performance computing and AI infrastructure firm, which cut the size of its IPO by 25%, signaling waning investor enthusiasm.

All data are current as of March 27, 2025.

Best-Value AI Stocks

Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing and the stock price will rise. Investors often use price-to-earnings (P/E) ratio to find stocks that are undervalued, as a lower P/E ratio can indicate that a company is valued at less than its fundamental value.

However, it may take multiple quarters or years before a turnaround materializes.  Some stocks may also remain cheap for a reason, falling into a “value trap,” continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation. Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value opportunity.

Best-Value AI Stocks
	Price ($)	Market Capitalization ($B)	12-Month Trailing P/E Ratio
Yiren Digital Ltd. (YRD)	7.39	0.6	3.0
Hut 8 Corp. (HUT)	12.32	1.3	3.8
Consensus Cloud Solutions, Inc. (CCSI)	23.56	0.5	5.1

• Yiren Digital Ltd: An AI-powered fintech company based in China, Yiren Digital offers payment processing, loan services, insurance, and ecommerce products. On March 27, Yiren announced it had formed a strategic joint venture to deliver AI-powered financial services in Indonesia.
• Hut 8 Corp: Hut 8 is a digital infrastructure company focused on high-performance computing hosting and Bitcoin mining. As of March 6, the company owns over 1 gigawatt of energy infrastructure across Canada and the U.S., with 3 megawatts dedicated to high-performance computing and AI.
• Consensus Cloud Solutions, Inc. Consensus Cloud Solutions provides a secure, cloud-based fax service that helps businesses, especially in health care, exchange and manage documents digitally. Consensus’s Clarity platform can extract critical information from unstructured data using natural language processing (NLP), with use cases in patient record keeping for health care customers.

Fastest-Growing AI Stocks

Growth investors look for companies with increasing revenue and earnings per share (EPS), believing these metrics signal strong business fundamentals and potential for value appreciation. However, relying on just one of these indicators can present an incomplete picture, as factors like tax law changes, mergers, or one-time gains can distort the numbers.

For a more balanced assessment, we screen AI growth stocks by looking at the most recent year-over-year percentage growth for both revenue and EPS, giving each equal weighting. We also excluded companies with growth rates in either category of 1,000% or more on the grounds that these are likely outliers.

Fastest-Growing AI Stocks
	Price ($)	Market Cap ($B)	EPS Growth (%)	Revenue Growth (%)
InterDigital, Inc. (IDCC)	215.79	5.5	189	140
Innodata Inc. (INOD)	40.09	1.3	493	127
SoundHound AI, Inc (SOUN)	8.88	3.5	101	53

• InterDigital, Inc: InterDigital is a research and development company specializing in wireless, video, and AI technologies for smartphones, consumer electronics, vehicles, and cloud services. In early March, the company signed a new multi-year licensing deal with a major Chinese smartphone vendor, increasing its annualized recurring revenue outlook by $40 million.
• Innodata, Inc: Innodata Inc. is a data engineering company specializing in delivering high-quality training data for use in generative AI models. Recently the company reported record Q4 and full-year 2024 results, with Q4 revenue up 127% year-over-year to $59.2 million and full-year revenue nearly doubling to $170.5 million.
• SoundHound AI, Inc: SoundHound’s proprietary technology offers fast, accurate voice recognition across various industries, including automotive, TV, Internet of Things (IoT), and customer service. On Feb. 27, SoundHound announced 2024 revenue of $84.7 million, up 85% year-over-year, as the company expanded across major sectors including automotive, restaurants, health care, and telecom.

AI Stocks With the Most Momentum

Momentum investing is a strategy that seeks to capitalize on existing market trends by investing in stocks that have recently outperformed their peers or the broader market. The core idea is that stocks on an upward trajectory are likely to continue rising as long as the fundamental drivers
behind their growth remain intact.

The momentum strategy has become synonymous with AI, owing to the fast growth of this sector. AI names can generate returns that far outpace established tech names, driven mostly by investor sentiment. While it’s a viable strategy for those with a higher risk tolerance, investors should also focus on the company’s underlying financials to ensure the anticipated growth prospects will materialize.

Here are the AI stocks with the highest total return in the last 12 months.

	Price ($)	Market Cap ($B)	12-Month Trailing Total Return (%)
Quantum Computing, Inc. (QUBT)	7.87	1.1	622
Innodata, Inc. (INOD)	40.09	1.3	562
VNET Group, Inc. (VNET)	9.01	2.4	453

• Quantum Computing, Inc: Quantum Computing is an integrated photonics and quantum technology company focused on developing accessible and affordable quantum computing solutions. Despite skepticism surrounding the near-term viability of quantum computing, the company has partnered with agencies such as NASA.
• Innodata, Inc: Innodata is a data engineering company specializing in delivering high-quality training data for use in generative AI models. Recently the company reported record fourth-quarter and full-year 2024 results, with fourth-quarter revenue up 127% year-over-year to $59.2 million and full-year revenue nearly doubling to $170.5 million.
• VNET Group, Inc: VNET operates high-performance internet data centers across China, providing server hosting, cloud computing, and secure virtual private network (VPN) services. The company wrapped up a successful 2024 with revenues increasing 11% year-over-year to $1.13 billion with 468 megawatts of total data center capacity.

Advantages of AI Stocks

Mass Disruption

AI is a rapidly evolving sector with applications across nearly every industry, from health care to finance and cybersecurity. As adoption accelerates, AI companies have significant room for revenue expansion and market dominance. Furthermore, ongoing advancements in research and development are enhancing AI models’ reasoning and adaptability, unlocking even greater disruptive potential.

Innovation

AI-driven automation enhances efficiency, leading to reduced costs for businesses. Companies leading in AI development can secure long-term competitive advantages, making them attractive investments in both the short and long term.

Investor Enthusiasm

AI stocks often experience strong investor enthusiasm, driving rapid price appreciation. With ongoing advancements in machine learning, automation, and generative AI, market sentiment remains highly bullish, fueling momentum-driven gains.

Disadvantages of AI Stocks

High Valuations and Market Speculation

Many AI stocks trade at high valuations due to investor enthusiasm and growth expectations. While the AI sector has strong long-term potential, some companies may be overvalued, leading to the risk of significant price corrections. Speculative investments, particularly in early-stage AI companies, can result in inflated valuations that may not be supported by actual revenue or profitability.

Regulatory Risks

AI technology is increasingly facing scrutiny from governments and regulatory bodies worldwide. Concerns over data privacy, algorithmic bias, job displacement, and national security risks could lead to stricter regulations that impact operations and growth prospects. The legal landscape around AI is still in its early stages, and new laws around transparency, intellectual property rights, and ethical AI development are being fleshed out.

Stiff Competition

The AI industry is highly competitive, with major players such as Alphabet (GOOGL), Microsoft (MSFT), Nvidia (NVDA), and OpenAI continuously advancing their technologies. This rapid pace of innovation means that companies that fail to stay ahead may become obsolete. Additionally, emerging AI startups such as DeepSeek can disrupt established players seemingly overnight, making it difficult for investors to predict long-term trends.

The Bottom Line

AI stocks offer significant growth potential, fueled by rapid technological advancements and strong investor enthusiasm. However, high valuations, regulatory uncertainties, and intense competition pose risks that investors must carefully navigate. While AI remains a compelling long-term investment, careful scrutiny of a company’s financials and thorough risk management are essential to avoid speculative bubbles and hype.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

These are the top tech stocks based on best value, fastest growth, and most momentum.

Tech stocks continued to retreat in March as markets grappled with heightened volatility following the Trump Administration’s announcement of tariffs targeting major trading partners. Economic data during the month offered a mixed view of the Federal Reserve’s outlook on potential rate cuts—consumer sentiment appeared to be weakening, yet the labor market remained robust, with unemployment holding steady at 4.1%. Amid the geopolitical and macroeconomic uncertainty, the Technology Select Sector SPDR Fund (XLK) declined 4% in March.

All data are current as of March 27, 2025.

Best-Value Tech Stocks

Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing. Investors often use price-to-earnings (P/E) ratio, looking for stocks with a low P/E ratio to uncover value. Typically, a lower P/E ratio signals an undervalued stock because it means the company is valued less than its fundamental value. These stocks may offer a stronger return after the market adjusts.

However, bargain hunters must exercise patience, as it may take multiple quarters (or years) before a turnaround materializes. Some stocks may also remain cheap for a reason, falling into a “value
trap,” continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation. Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value
opportunity.

Best-Value Tech Stocks
	Price ($)	Market Capitalization ($B)	12-Month Trailing P/E Ratio
Yiren Digital Ltd. (YRD)	7.39	0.6	3.0
Hut 8 Corp. (HUT)	12.32	1.3	3.8
Yalla Group Limited (YALA )	5.79	0.9	7.8

• Yiren Digital Ltd: An AI-powered fintech company based in China, Yiren Digital offers payment processing, loan services, insurance and ecommerce products. On March 27, Yiren announced it had formed a strategic joint venture to deliver AI-powered financial services in Indonesia.
• Hut 8 Corp: Hut 8 is a digital infrastructure company focused on high-performance computing hosting and Bitcoin mining. As of March 6, the company owns over 1 gigawatt of energy infrastructure across Canada and the U.S.
• Yalla Group Limited: Yalla Group is the leading online social networking and gaming platform in the Middle East and North Africa region. The company ended its fiscal year 2024 with 41 million monthly active users and 12 million paying users, generating $340 million in revenue.

Fastest-Growing Tech Stocks

Growth investors look for companies with increasing revenue and earnings per share (EPS), believing these metrics signal strong business fundamentals and potential for value appreciation. However, relying on just one of these indicators can present an incomplete picture, as factors like tax law changes, mergers, or one-time gains can distort the numbers.

While growth investing offers the potential for high returns, it also comes with risks, such as inflated valuations, market volatility, and companies failing to sustain rapid expansion. Investors should
be cautious of excessive hype, unsustainable growth rates, and external economic factors that could impact performance. For a more balanced assessment, we employ a dual-metric approach. We equally weight the most recent year-over-year (YOY) percentage growth in both revenue and earnings per share (EPS), giving each consideration to provide a clearer view of each company’s true growth trajectory. In addition, we exclude companies that exhibit extraordinarily high growth rates—specifically, those with quarterly growth exceeding 1,000%—since these are outliers not likely on a sustainable trendline.

Fastest-Growing Tech Stocks
	Price ($)	Market Cap ($B)	EPS Growth (%)	Revenue Growth (%)
InterDigital, Inc. (IDCC)	215.79	5.5	189	140
Innodata Inc. (INOD)	40.09	1.3	493	127
CleanSpark, Inc. (CLSK)	7.92	2.2	735	19.5

• InterDigital, Inc: InterDigital is a research and development company specializing in wireless, video, and AI technologies for smartphones, consumer electronics, vehicles, and cloud services. In early March, the company signed a new multi-year licensing deal with a major Chinese smartphone vendor, increasing its annualized recurring revenue outlook by $40 million.
• Innodata, Inc.: Innodata is a data engineering company specializing in delivering high-quality training data for use in generative AI models. Recently the company reported record Q4 and full-year 2024 results, with Q4 revenue up 127% year-over-year to $59.2 million and full-year revenue nearly doubling to $170.5 million.
• CleanSpark, Inc: Self-described as “America’s Bitcoin Miner,” CleanSpark develops bitcoin mining infrastructure across the U.S. As of Feb. 28, the company owns or operates 915 megawatts of mining sites and holds 11,177 bitcoins.

Tech Stocks With the Most Momentum

Momentum investing is a strategy that seeks to capitalize on existing market trends by investing in stocks that have recently outperformed their peers or the broader market. The core idea is that stocks on an upward trajectory are likely to continue rising as long as the fundamental drivers
behind their growth remain intact.

This strategy is particularly popular in the tech sector, where innovation, product launches, and market disruptions often lead to rapid stock price appreciation. However, investors must carefully monitor stock valuations, as fast-rising stocks often outpace their fundamentals. When valuations become overstretched, they can form speculative bubbles that are vulnerable to sharp selloffs if market sentiment shifts. Here are the tech stocks with the highest total return in the last 12 months.

Tech Stocks With the Most Momentum
	Price ($)	Market Cap ($B)	12-Month Trailing Total Return (%)
Red Cat Holdings, Inc. (RCAT)	6.00	0.5	660
Quantum Computing, Inc. (QUBT)	7.87	1.1	622
Innodata, Inc. (INOD)	40.09	1.3	572

• Red Cat Holdings, Inc: Red Cat is a drone technology company specializing in integrating robotic hardware and software for military, government, and commercial applications. While the Pentagon faces projected budget cuts of $50 billion over the next five years, drone technology remains a top defense priority, positioning Red Cat to benefit from continued investment in the sector.
• Quantum Computing, Inc: Quantum Computing is an integrated photonics and quantum technology company focused on developing accessible and affordable quantum computing solutions. Despite skepticism surrounding the near-term viability of quantum computing, the company has partnered with agencies such as NASA, working “to support NASA’s advanced imaging and data processing demands.”
• Innodata, Inc: Innodata is a data engineering company specializing in delivering high-quality training data for use in generative AI models. Recently the company reported record Q4 and full-year 2024 results, with Q4 revenue up 127% year-over-year to $59.2 million and full-year revenue nearly doubling to $170.5 million.

Advantages of Tech Stocks

Growth Potential

Tech companies, especially those in emerging sectors like artificial intelligence, cloud computing, and cybersecurity, often experience rapid revenue and earnings growth. Many tech firms have scalable business models that allow them to expand globally, while maintaining high gross margins.

Innovation

The tech industry is constantly evolving, with companies pioneering groundbreaking innovations that reshape entire industries. Investors in leading tech firms can benefit from major technological shifts, such as AI, and automation, creating long-lasting competitive advantages.

Recurring Revenues

Many tech companies, particularly those in software, cloud computing, and digital services, operate on subscription-based or recurring revenue models, ensuring more stable and predictable cash flows. These models provide businesses with greater revenue visibility, reduce dependence on one-time sales, and enhance customer retention through long-term contracts and service integrations. Additionally, recurring revenue helps mitigate economic downturns by offering consistent income streams, while also enabling companies to reinvest in research, development, and expansion

Disadvantages of Tech Stocks

Volatility

Tech stocks are known for their high volatility because rapid technological changes and competitive pressures can lead to significant price fluctuations. They often carry high valuations based on growth expectations, making them susceptible to market corrections if they fail to meet these
projections. Furthermore, regulatory challenges and geopolitical tensions can impact the sector, introducing additional risks and uncertainties for investors.

Valuation Risks

Owing to their high growth potential, many tech companies trade at high earnings or revenue multiples, making them susceptible to overvaluation. If growth expectations do not materialize, these stocks can experience sharp declines, leading to potential losses for investors. Moreover,
early-stage tech companies often allocate a significant portion of their capital to staffing and marketing to sustain their high growth rates. As a result, they tend to remain unprofitable in their initial stages, often relying on outside capital to fund expansion, despite achieving higher gross margins than companies in non-technology sectors.

Regulatory and Competitive Challenges

The tech industry faces increasing scrutiny from regulators on issues like data privacy,
antitrust concerns, and cybersecurity. Tech giants such as Meta Platforms (META)
and Alphabet Inc (GOOGL) are no strangers to regulatory probes and fines.  Additionally, competition is fierce, with companies constantly innovating to maintain their market position, which can erode profitability and market share over time.

The Bottom Line

Tech stocks offer compelling investment opportunities due to their high growth potential, continuous innovation, and recurring revenue models, making them a dominant force in the global economy. AI is set to be a major driver of technological advancements in 2025, with the potential to
disrupt all major industries. However, the sector can be volatile, with regulatory scrutiny expected to increase along with innovation. Investors should exercise caution, ensuring that even the most promising tech stocks are evaluated critically to avoid getting caught up in market bubbles or
speculative hype.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

ETFs can help investors diversify their portfolio through a single investment product

Exchange-traded funds (ETFs) are investment funds that trade on stock exchanges, similar to individual stocks, and typically track an index, sector, commodity, or asset class. They offer investors diversification, as a single ETF can hold a broad mix of securities, reducing risk compared to investing in individual stocks. ETFs also tend to have lower expense ratios than actively managed mutual funds and provide liquidity, allowing investors to buy and sell shares throughout the trading day at market prices.

Key Takeaways

• Leading ETFs offer investors an opportunity to broadly diversify their holdings through a single investment with a low expense ratio and/or higher returns compared to competitors.
• We screened for the equity, bond, fixed income, commodities, and currency ETFs providing the highest one-month total returns for April 2025.
• These funds include SILJ, ISHG, SPSK, CPER, FXE

Below, we outline the top equity, bond, fixed income, commodities, and currency ETFs that generated the highest returns over the last month. We have excluded leveraged and inverse ETFs, as well as funds with less than $50 million in assets under management (AUM).

All data are current as of March 27, 2025.

Equity ETF with the Best 1-Month Return: Amplify Junior Silver Miners ETF (SILJ)

• One-month performance: 13.9%
• Expense Ratio: 0.65%
• Annual Dividend Yield: 5.8%
• 30-Day Average Daily Volume: 3,327,081
• Assets Under Management (AUM): $1.14 billion
• Inception Date: Nov. 28, 20212
• Issuer: Amplify Investments​

SILJ is the first and only ETF focused on small-cap silver miners, offering targeted exposure to a unique segment of the precious metals market. As of March 27, its top holding was shares of First Majestic Silver Corp (AG). Silver, much like gold, has rallied in 2025 as investors chase safe-haven
assets in the face of heightened geopolitical uncertainty.

Bond ETF with the Best 1-Month Return: iShares 1-3 Year International Treasury Bond ETF (ISHG)

• One-month performance: 1.6%    
• Expense Ratio: 0.35%
• Annual Dividend Yield: 2.46%
• 30-Day Average Daily Volume: 22,052
• AUM: $87.8 million
• Inception Date: Jan. 21, 2009
• Issuer: BlackRock, Inc.

The iShares 1-3 Year International Treasury Bond ETF provides exposure to short-term government bonds from developed markets outside the U.S., focusing on maturities between one and three years. The ETF has rallied over the past month as central banks look to cut interest rates (which drives up short-term bond prices) due to slowing economic growth.

Fixed Income ETF with the Best 1-Month Return: SP Funds Dow Jones Global Sukuk ETF (SPSK)

• One-month performance: 0.89%
• Expense Ratio: 0.5%
• Annual Dividend Yield: 3.5%
• 30-Day Average Daily Volume: 148,710
• AUM: $293.9 million
• Inception Date: Dec. 30, 2019
• Issuer: Tidal Financial Group

SPSK is a Sharia-compliant ETF that provides exposure to a diversified portfolio of asset-backed sukuk. A sukuk is a Sharia-compliant financial instrument similar to a bond, but instead of paying
interest (which is prohibited in Islam), it gives investors partial ownership of an underlying asset and pays returns from that asset’s profits.

Commodities ETF with the best 1-Month Return: United States Copper Index Fund (CPER)

• One-month performance: 15.5% 
• Expense Ratio: 0.97% 
• Annual Dividend Yield: N/A
• 30-Day Average Daily Volume: 145,575 
• AUM: $205.3 million 
• Inception Date: Nov. 15, 2011
• Issuer: Marygold

The United States Copper Index Fund (CPER) is an ETF designed to track the daily performance of the SummerHaven Copper Index Total Return, which invests in copper futures contracts. Copper prices have soared in recent days as the ongoing trade war between the U.S. and its trading partners threatens to disrupt supplies of the vital metal, while fiscal stimulus in China is expected to drive copper demand.

Currency ETF with the Best 1-Month Return: Invesco Currency Shares Euro Trust (FXE)

• One-month performance: 2.36% 
• Expense Ratio: 0.40% 
• Annual Dividend Yield: 2.12%
• 30-Day Average Daily Volume: 117,795
• AUM: $224.4 million
• Inception Date: Dec. 9, 2005
• Issuer: Invesco

The Invesco Currency Shares Euro Trust is an ETF designed to track the price of the euro through physical euro holdings. The euro is the currency of 19 European Union countries.

How We Chose the Best ETFs

We selected the best ETFs across five areas of focus—equities, bonds, fixed-income, commodities, and currencies—utilizing a screener by VettaFi. In each case, we sorted ETFs according to the specified category and ranked them by highest one-month returns. We then filtered out any ETFs that employ a leveraged or inverse strategy, as well as any with less than $50 million in assets under management. Finally, for currencies ETFs, we excluded any funds focused on cryptocurrencies from our screen.

How to Invest in ETFs

To invest in ETFs, start by researching and selecting an ETF that aligns with your financial goals, risk tolerance, and investment strategy—whether it tracks a broad market index, a specific sector, or a commodity. Open a brokerage account with a platform that offers ETF trading, then place an order
just like you would for a stock. Consider factors such as expense ratios, liquidity, and tracking accuracy to ensure you’re getting the best value for your money. Depending on your time horizon and risk tolerance, ETFs typically require minimal maintenance and are often considered long-term, buy-and-hold investments.

The Bottom Line

ETFs are versatile and cost-effective investment options that provide diversification, liquidity, and tax efficiency, making them ideal for both new and experienced investors. With minimal maintenance required, they offer a simple way to gain exposure to broad markets or specific sectors while managing risk.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above ETFs.

These are some of the penny stocks with interesting charts using technical analysis that performed well over the past month

Once a stock price is below $5 per share, it is categorized as a penny stock. Frequently, but not always, penny stocks have small market capitalizations and are prone to high volatility due to low liquidity and trading volumes. Penny stocks can, therefore, provide an opportunity for large, quick gains because a small movement in the price of a penny stock can produce a large percentage gain. But they also carry significant risks compared to more established stocks. To guard against the risks associated with investing in penny stocks, the stocks discussed in this article have a minimum price and volume criteria, along with clear chart patterns and other technical analysis indicators.

Below is an analysis of developing bullish patterns in penny stocks for April 2025, pulled from a screen showing positive one-month performance, a minimum price of $1.50, and 30-day average daily volume of 200,000 shares.

All charts and data are current as of March 27, 2025.

EMX Royalty Corporation (EMX)

• Price: $2.11
• One-month return: 17.9%
• Average daily trading volume: 386,000
• Exchange: New York Stock Exchange

EMX Royalty Corporation (EMX) is in the industrial metals and mining industry and explores for and receives royalties from mineral and mining properties. The company’s stock has formed a large potential head and shoulders bullish reversal pattern that recently tested resistance around the neckline with a high of $2.15. Resistance was seen at the exact swing high from May 2024 that led to a decline and establishment of the right shoulder of the pattern. During the advance, a breakout above the 200-week moving average was triggered. A new breakout of the head and shoulders pattern would further confirm the strength indicated by the moving average breakout. A daily or weekly close above either line will provide further evidence for improving underlying demand that could lead to a new bullish reversal and the beginning of an uptrend.

New Gold Inc. (NGD)

• Price: $3.62
• One-month return: 33.0%
• Average daily trading volume: 22.0 million
• Exchange: NYSE

The stock of New Gold Inc. (NGD) triggered a decisive bullish breakout of a seven-month basing pattern recently and it looks poised to move higher. Signs of strength include the fact that support for the consolidation pattern was seen above $2.40. That price level was previously resistance at the January 2021 swing high. Notice that a breakout of the $2.40 high triggered in August 2024, and it was quickly followed by a successful test of that price area as support. That pullback was followed by a spike higher. The breakout triggered a continuation of the advance from the March 2020 low. Also, during the sideways correction, NGD stock stayed above the prior resistance at $2.40, indicating it as an area of support. During the correction, the low was $2.43. In the short-term, the stock of NGD is extended, but following a pullback, it should establish new price patterns to consider.

Protara Therapeutics, Inc. (TARA)

• Price: $4.54
• One-month return: 21.4%
• Average daily trading volume: 301,400
• Exchange: Nasdaq

After establishing a swing low of $1.60 in October of last year, the stock of Protara Therapeutics, Inc. (TARA) advanced by $8.89 or 557% in eight weeks. A bearish correction followed, resulting in a higher swing low at $3.19 in early March. Support was seen at the 50-week moving average. That was the first test of support since the 50-week moving average, currently at $3.18, was reclaimed in late November. During the rally, the stock broke out above the 200-week moving average for the first time and then closed above it for 11 weeks. This is long-term bullish behavior that signals the potential for a continuation of a developing bull trend. A bull flag pattern has formed during the correction, but it looks like it may need more time to develop. Behavior around the 50-week and 200-week moving averages should continue to provide clues to changes in demand, along with a rising trendline.

Taseko Mines, Ltd. (TGB)

• Price: $2.43
• One-month return: 16.8%
• Average daily trading volume: 8.0 million
• Exchange: NYSE

Taseko Mines, Ltd. (TGB) is a Canadian mining company specializing in copper, gold, molybdenum, niobium, and silver exploration and development across North America. The company’s stock broke out of a bullish descending wedge recently. The larger pattern is not perfect but nonetheless shows the potential for a multiyear bullish breakout. A bull wedge is a trend continuation pattern, and therefore, if strength is retained, the May 2024 peak of $3.15 could be surpassed. That was the highest price for the stock since 2013.

It is not insignificant that the bottom of the wedge at $1.77 was a clear test of support at the 200-week moving average. Notice that the advance prior to the wedge correction was $2.10 or 200%. Increasing volume following the wedge bottom shows improving demand before the breakout and increasing interest in the stock. It can be watched during pullbacks for signs of support that could lead to the stock moving higher.

908 Devices, Inc. (MASS)

• Price: $4.01
• One-month return: 79.0%
• Average daily trading volume: 3.2 million
• Exchange: Nasdaq

A double-bottom bullish reversal pattern triggered in the stock of 908 Devices, Inc. (MASS) in early March. The company operates in the medical devices industry, providing mass spectrometry solutions for diverse scientific and industrial applications. Although the initial breakout quickly failed, the following week, the stock gapped up above the 20-week moving average and then pulled back to test it as support. That was the beginning of a sharp one-week rally and a $2.13, or 78.8%, gain in the
stock to a 30-week high of $4.75. It produced a large outside month for March, reaching a seven-month high.

The first pullback following a breakout of a key pivot level can present one of the better decision points as the trend may just be getting started. A pullback to test support around the 50% retracement and neckline of the double bottom at $3.36 and $3.29, respectively, or higher or lower, should help gauge interest in the stock.

What to Know About Penny Stocks

Many penny stocks trade via over-the-counter (OTC) markets, which means they have minimal regulatory oversight and little analyst coverage, making it difficult to access accurate company information.

However, the penny stocks we’ve identified in this article are all listed on the New York Stock Exchange or Nasdaq, which means they are subject to the same listing requirements as any other company on these exchanges. These requirements are intended to ensure that only high-quality securities are available for trading on the exchange.

While penny stocks are a riskier investment than established stocks due to their volatility, the potential for high returns is attractive to some investors.

How We Chose the Best Penny Stocks

To screen for penny stocks with interesting chart patterns and other technical analysis indicators, we used the following criteria. Stocks had to have positive one-month performance and be priced under $5.00. To help improve the reliability of the chart patterns, the stocks had to have a minimum price of $1.50 and an average 30-day trading volume of at least 200,000. The stock also had to have at least 24 months of trading history.

The charts were also reviewed for bullish patterns, including breakouts above trendlines, key resistance, and moving averages. Candlestick patterns were also considered, as we looked for signs that pointed to a bullish trend reversal or indications that a trend was strengthening. Still, it’s important to remember that past performance is not a guarantee of future performance.

Penny Stock Advantages and Disadvantages

The low price of penny stocks offers investors high potential for growth, and they can give smaller businesses a platform to access funding. But while these stocks can bring investors significant gains, they also carry the risk of significant losses. There are greater risks associated with investing in penny stocks than with more established stocks.

Penny stocks usually lack liquidity. It can also be difficult to find solid public information about penny stock companies that trade over the counter. Given the additional risks, penny stocks are not suitable for all investors, especially those with a low risk tolerance.

Another disadvantage is that the price patterns may take longer to unfold and single-position drawdowns can be larger than normal, given the higher potential volatility in low-priced stocks.

There are ways to mitigate the added risks, starting with raising the minimum price and average trading volume and selecting penny stocks that trade on the NYSE or Nasdaq. Overall portfolio risk can be contained by allocating only a small amount of total capital to the penny stock market.

By carefully screening, watching, and waiting for price patterns to unfold, investors can access a market environment that has the potential for large gains in a relatively short period of time. But that depends on entering a position at the right time.

The Bottom Line 

Penny stocks have the potential to sometimes see sharp multi-week or month rallies that, on a percentage basis, exceed expectations. They can present opportunities for investors that are difficult to find otherwise. This article features five interesting charts of penny stocks that had advanced during the prior month and showed upside potential, given the presented technical analysis.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the securities listed above.

Reviewed by JeFreda R. Brown
Fact checked by Ryan Eichler

What Are 6 Drawbacks of Working for Your Parents?

From the moment you were born, you were on your career path. Now that you’ve graduated from college and earned your degree, the time has come. Unlike your peers who have a long hard road of online applications and job interviews ahead of them, you already have the perfect position waiting for you. You’ll be joining the family business, of course!

If your parents run a family business, joining the family biz seems like a no-brainer. After all, not only are jobs hard to come by, but there are also countless advantages to working for your folks. However, no job is perfect—particularly when your boss happens to be the same person who changed your diapers when you were a baby.

Key Takeaways

• Many of your colleagues, co-workers, and clients may assume you were hired simply because you’re the boss’s child.
• Working for your parents can lead to significant conflict.
• if you keep the lines of communication open and set some clear boundaries from the get-go, you’ll be more likely to survive and even thrive in the family business.

There are quite a few challenges to working for your parents. Not only will outsiders assume you’re not qualified for your job, but one parent will probably embarrass you one day, and another will infuriate you the next.

However, if you keep the lines of communication open and set some clear boundaries from the get-go, you’ll be more likely to survive and even thrive in the family business. Even so, be sure to weigh all the pros and cons before you accept the job.

Understanding the Drawbacks of Working for Your Parents

Drawback No.1: Lack of Respect

Even if you’re the most qualified person for the job, many of your colleagues, co-workers, and clients will assume you were hired simply because you’re the boss’ child.

When folks believe your achievements are solely the result of nepotism, they won’t treat you with respect. This can create a lot of resentment and hostility within the workplace, which can make things uncomfortable for you and everyone else. Not to mention it can be a massive blow to your self-esteem.

Drawback No.2: Family Friction

You grew up with your parents and lived under the same roof for years. So it should be no biggie to spend every day with them at the office. As many others who have joined their family business will tell you, it’s one thing to live with your parents. It’s an entirely different ball game to work for them.

Working for your parents can lead to significant conflict. Because you know each other so well, you may tend to make work disagreements personal. Plus, when you have emotional ties to your boss, it’s a lot easier to get your feelings hurt at the office. Not only can these disagreements lead to family problems, but it can also harm the entire company.

Drawback No.3: There’s No Escape

Once you decide to join the family business, you may feel trapped. Even if a more promising career opportunity comes along, you may feel obligated to stick with the family business. After all, how could you possibly abandon your parents when they’ve spent so many years teaching you the ins and outs of the family business?

If you do decide to accept another job and leave the biz, your family could end up resenting you for it. And do you want to suffer the wrath of your parents’ unique brand of guilt for the rest of your days?

Drawback No.4: You’re Emotionally Invested

When times are tough, and business is slow, you’ll have to watch your parents struggling to make ends meet and keep the company afloat. This can be emotionally draining for you and somewhat embarrassing for them.

After all, no parent wants their child to see them in such a weak position. When you work for your parents as opposed to a large corporation, you take the ups and downs much more personally.

Drawback No.5: Your Ideas Are Shot Down

Your parents may have a hard time seeing you as anything other than their “baby,” so they may not value your opinion as much as other employees.

When you present new ideas at the office, your parents may be more likely to shoot them down or ignore you altogether. After all, you’re their kid. What do you know? This kind of rejection can quickly wear on you and create feelings of resentment.

Drawback No.6: Family Time = Business Time

When you work for your parents, you may begin to feel like all you ever talk about is work. Every time you get together—whether it’s for Thanksgiving dinner or your birthday party—the conversation may always turn to business.

This can put a major strain on your family relationships, and you may feel as if you’re losing the more personal connection you once shared with your parents.

Get the most passive income possible with these top dividend stocks

Dividend stocks are shares of companies that distribute a portion of their profits to shareholders on a regular basis in the form of dividends. Dividend payments, typically distributed quarterly, can be a source of passive income for investors and a sign of the continued financial well-being of the distributing company.

Key Takeaways

• Dividend stocks are companies that regularly pay out a portion of their profits to shareholders in the form of dividends. These may be distributed quarterly, semiannually, or yearly.
• Dividend yield measures the yearly dividend amount a company pays in comparison to its stock price and is expressed as a percentage.
• Dividend yield fluctuates constantly as a company’s share price moves.

Below, we look at 10 dividend stocks to watch for April 2025 as measured by forward dividend yield. We exclude companies with payout ratios that are either negative or higher than 100%. A detailed explanation of our methodology is below. Data throughout are current as of March 31, 2025.

Best Dividend Stocks to Watch in April 2025
Ticker	Company	Sector	Market Cap ($B)	Dividend Yield (%)	Price ($)
TRMD	TORM PLC	Transportation	1.61	35.09	16.48
BWLP	BW LPG Limited	Transportation	1.64	26.52	10.88
ZIM	ZIM Integrated Shipping Services Ltd.	Transportation	1.76	25.65	14.59
ACP	abrdn Income Credit Strategies Fund	Miscellaneous	0.74	20.30	5.89
INSW	International Seaways, Inc.	Transportation	1.63	17.41	33.20
RWAY	Runway Growth Finance Corp.	Finance	0.39	16.65	10.35
SBLK	Star Bulk Carriers Corp.	Transportation	1.82	15.64	15.56
EC	Ecopetrol S.A.	Energy Minerals	21.12	15.37	10.44
JKS	JinkoSolar Holding Company Limited	Electronic Technology	1.01	15.11	18.64
STLA	Stellantis N.V.	Consumer Durables	42.00	14.79	11.21

Why Are These the Best Dividend Stocks?

The dividend stocks included on our list represent companies trading on the Nasdaq or the New York Stock Exchange with share prices of $5 or more, a market capitalization of $300 million or more, and a daily trading volume of at least 100,000. Companies with payout ratios that are either negative or over 100% were also excluded from the list. From the pool of companies remaining, we selected those with the highest forward dividend yield for inclusion on our list. Because dividend yield changes all the time with the price of a company’s stock, this list is also likely to change quickly. Further, these are not the best dividend stocks of all time; they represent those that rose to the top of the list based on our methodology for this month.

Investors prioritize dividend stocks because they provide a steady passive income stream and enjoy the potential for share price growth in the future. Dividends are not necessarily a given, however, even among companies with a history of paying them for many years. Investors should remember that:

Market conditions impact dividends. The broader economic environment has a significant impact on dividend payments. When there is concern about the ability to maintain operations and top- and bottom-line performance due to external market factors, companies may move to reduce or even eliminate dividends as an early protective measure. This allows them to preserve capital in case of turbulent times to come. On the other hand, booming economies can sometimes prompt companies to increase their dividend payments.

Dividend yields may be misleading: Dividend-paying companies may increase a dividend yield to entice investors, but higher dividend payments can be unsustainable. Similarly, a dividend yield may appear higher because of falling stock prices. These are reasons why the payout ratio is an important metric to monitor for dividend stocks.

How to Pick Dividend Stocks

Strong dividend stocks tend to be those of companies with solid fundamentals, a strong profitability horizon, and a sustainable dividend yield that has maintained or, ideally, increased over a period of years.

How to Find Dividend Stocks

Not all sectors and industries are the same when it comes to dividend-paying companies. Finance and energy tend to be sectors with higher dividend payments than others, and real estate investment trusts (REITs) are required to pay out a substantial portion of their income in dividends to shareholders. But it’s also important for investors to look not just at a company’s sector, but also at its dividend performance relative to other companies in that sector.

What Should Investors Look For in Dividend Stocks?

Dividend Payout Ratio (DPR)

DPR is a measure of how much of a company’s earnings are paid to shareholders. The DPR is calculated by dividing total dividends by net income and is often included on brokerage platforms as well as financial news sites.

As an example, if Company X reported a net income of $50,000 and paid $10,000 in yearly dividends, its DPR would be 20% because $10,000 / $50,000 = 20%. In other words, Company X pays 20% of its earnings to shareholders each year. A DPR of under 50% is typically considered stable and sustainable and may be indicative of long-term growth potential. Higher percentages may mean that a company is overpaying on dividends.

Dividend Yield

Dividend yield is a measure of the annual value of dividends received by a shareholder relative to the security’s per-share market value. It can be calculated by dividing the annual dividend per share by the current stock price. Like DPR, this information is often easily found online.

If Company X pays $5 in dividends annually and has a current share price of $100, its dividend yield is 5% because $5 / $100 = 5%. Investors sometimes begin a search for dividend stocks by screening for companies with dividend yields above a certain percentage.

Dividend Coverage Ratio

The dividend coverage ratio measures the number of times a company is able to pay dividends to shareholders and is calculated by dividing annual income by annual dividend per share.

Company X generated $5 million in net income and pays $1 million annually in dividends, hypothetically. In this case, the company has a dividend coverage ratio of 5, or $5 million / $1 million. Higher dividend coverage ratios mean companies can pay dividends a greater number of times based on current income levels.

Besides these metrics, there are other fundamentals that investors should consider as well, including earnings per share (EPS) and total return.

The Bottom Line

For investors looking to generate income from their investments, dividend-paying companies may be a good option. However, before investing in a dividend stock, it is important to research the overall financial health of that company. Higher dividend yields are generally seen as attractive but may be misleading and even a sign of financial instability.

Investors pursuing dividend stocks may be able to reinvest dividends to buy more shares, therefore taking advantage of compounding returns.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above stocks.