 A diversified approach, using exchange-traded funds in US stocks, international equities, and bonds, helps investors weather ongoing market... ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ |
| | Written by Jeffrey Neal Johnson 
Recent market volatility has tested the nerves of even the most seasoned investors. Fluctuations in major indices, driven by persistent inflation concerns, rising interest rates, and geopolitical uncertainties, have created a challenging environment. Within this turbulence, the contrasting performance of different asset classes, including U.S. stocks, international stocks, and bonds, highlights a fundamental principle of investing: diversification. Diversification is a fundamental principle of investment strategy that involves spreading your investments across different asset classes to minimize risk. By diversifying your portfolio with ETFs, you can protect yourself from significant losses if a single asset class or sector underperforms. This approach ensures that your overall portfolio remains resilient in the face of market volatility. Riding the U.S. Market Rollercoaster The iShares Core S&P Total U.S. Stock Market ETF (NYSEARCA: ITOT) provides broad exposure to the U.S. equity market, tracking the S&P Total Market Index. ITOT has experienced a year-to-date (YTD) performance of -6.48% as of this writing, reflecting the broader challenges faced by U.S. stocks. This downturn is further illustrated by its shorter-term performance, with a 5-day return of -4.34%, a 1-month return of -10.20%. However, looking at the 1-year performance provides a slightly more optimistic perspective, showing a return of +5.89%. These figures highlight the stock market's inherent volatility, particularly in the current environment. Factors such as interest rate sensitivity and sector-specific performance, especially within the technology sector, have contributed to ITOT's recent movements. The iShares Core S&P ETF (ITOT) offers broad diversification within the U.S. market, holding 2522 different stocks. Its top holdings are composed primarily of prominent technology companies, mirroring the substantial influence of this sector. The ETF's sector breakdown is heavily weighted towards technology, financials, healthcare, and consumer discretionary, reflecting the overall composition of the U.S. market. With a remarkably low expense ratio of 0.03% and assets under management totaling $64.64 billion, ITOT presents a potential strategic entry point for investors anticipating a stock market rebound. International Exposure Offers a Buffer In contrast to the U.S. market's struggles, the Schwab International Equity ETF (NYSEARCA: SCHF) has demonstrated some resilience. This ETF, which tracks the FTSE Developed ex-US Index, provides exposure to international stocks in developed markets outside the United States. As of this writing, SCHF boasts a positive YTD performance of +7.24%, outperforming its U.S. counterpart. This outperformance is further supported by its 1-year return of +2.24%. Several factors may contribute to SCHF's relative strength, including favorable currency movements, different geographic and sector exposures, and potentially less direct impact from U.S. monetary policy decisions. SCHF, with an expense ratio of 0.06% and AUM of $43.50 billion, holds a diversified portfolio of 1509 stocks across developed international markets. The ETF underwent a 2-for-1 stock split on October 11, 2024, and currently has a beta of 0.89, indicating it is less volatile than the overall market. Anchoring your Portfolio The Vanguard Total Bond Market ETF (NASDAQ: BND) plays a crucial role in a diversified portfolio by providing exposure to the U.S. investment-grade bond market. Tracking the Bloomberg U.S. Aggregate Float Adjusted Index, BND offers a degree of stability, which is particularly valuable during periods of stock market volatility. BND has a YTD performance of +1.39%, a modest but positive return in a challenging environment for bonds, given the backdrop of rising interest rates. The fund's focus on high-quality, investment-grade bonds contributes to its relative stability. The BND ETF, which is one of the largest bond ETFs available, has an expense ratio of 0.03% and $127.21 billion in assets under management. The fund comprises a massive portfolio of 17,963 bonds, predominantly U.S. Treasury Notes and other government-related securities, ensuring high credit quality. With an annual dividend of $2.67 and a most recent payment of $0.2195 per share on March 5, 2025 (for investors holding shares before the ex-dividend date of March 3, 2025), the fund offers a 3.65% dividend yield. Strength in Numbers: The Power of Diversification The contrasting performance of ITOT, SCHF, and BND in recent months vividly illustrates the core principle of diversification. While U.S. stocks (ITOT) have faced downward pressure, international stocks (SCHF) have shown resilience, and bonds (BND) have provided a degree of stability. This demonstrates how different asset classes can react differently to the same market conditions. The specific allocation to each of these ETFs within a portfolio depends on an individual investor's risk tolerance and financial goals. It's also crucial to rebalance the portfolio periodically, adjusting the holdings to maintain the desired asset allocation. A Long-Term Perspective Investing is inherently a long-term endeavor. While short-term market fluctuations are inevitable, a well-diversified portfolio, such as one constructed with ETFs like ITOT, SCHF, and BND, can provide a solid foundation for navigating market volatility and pursuing long-term financial goals. The key is to maintain a disciplined approach, focus on the long-term horizon, and understand that diversification is a powerful tool for managing risk.  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| Written by Chris Markoch 
Just when investors were getting a nice buzz from soaring stock price of Starbucks Corp. (NASDAQ: SBUX) and Dutch Bros Inc. (NYSE: BROS), both stocks were whacked by rising coffee prices. Starbucks is down over 4% in the last 30 days and Dutch Bros is down over 12%. The threat of tariffs and a possible recession isn’t helping matters and makes investors wonder if these stocks are approaching fair value or if they’re falling knives. Both companies offer solid baseline fundamentals, but at a time when investors are thirsting for growth, should investors consider sipping on either of these two retail stocks? Two Different Stories Both Starbucks and Dutch Bros are in the retail stocks sector, but they also have characteristics of consumer discretionary stocks. That is, consumers may choose to forego their regular beverage routine when discretionary dollars get tight. However, both companies have a passionate customer base that makes them Starbucks is the category leader and is an international phenomenon with nearly 17,000 stores in the United States as of February 2025. Although the idea of a local coffee shop existed before Starbucks, the company has changed how many consumers think about coffee. The company’s category leadership shows up in its financials. Starbucks generated $3.10 in earnings per share on $36.1 billion in revenue in 2024. Both numbers were lower year-over-year (YoY). That was one reason that the company is in the middle of a transformation led by former Chipotle Mexican Grill chief executive officer (CEO) Brian Nichol. Dutch Bros is a relatively new kid on the block as far as investors are concerned. Although the company has only been publicly traded since 2021, it has a devoted customer base that’s attracted to the taste of its drinks and its commitment to making a difference in the communities in which it operates. Speaking of that, Dutch Bros has a smaller footprint than Starbucks. The company opened its 1,000th location in Orlando, Florida, in February 2025. BROS stock was one of the best-performing stocks of 2024, and that trend continued in 2025. Even with the sell-off, it’s still up 11% in 2025 and 92.6% in the last 12 months. Your Daily Fix Is Getting More Expensive Coffee prices are climbing, a trend evident to regular visitors of popular coffee spots. What may be less known is that Arabica coffee prices have surged over 70% since November 2024, reaching an all-time high in February—levels unseen since 1977. The knee-jerk reaction would be to blame the increase in tariffs. And the threat of tariffs (real or imagined) is playing a role. Coffee futures soared in January due to the Trump administration’s threat of a 25% tariff on the country, which is responsible for 30% of U.S. coffee imports. However, as of this writing, the bigger concern about tariffs is the uncertainty regarding when or if they will be put in place. But there are other issues at play. One of the most significant is what’s called the “black frost” in Brazil, which impacts the productivity of the coffee plant. The frost is coming while the country is still in the midst of a severe drought. This is significant because Brazil, Colombia and El Salvador are the three countries from which Dutch Bros purchases the 100% Arabic beans that make up the company’s signature Private Reserve Blend. By contrast, Starbucks sources its coffee from more than 30 countries. While it has heavy exposure to Latin America, it also sources some of its unique roasts from Africa and Asia/Pacific. That said, Starbucks buys approximately 3% of the world’s total coffee supply, so even its geographic diversity doesn’t shield it from pricing pressures. If You Had to Pick One With both stocks trading at premium valuations, it’s tough to make a recommendation for one over the other. BROS stock trades at over 111x forward earnings, which makes SBUX stock look comparatively cheap at 35x forward earnings. No matter how it’s viewed, investors are paying a premium for growth, with both stocks still trading well above their 200-day simple moving averages despite recent declines. For those focused on growth, valuation concerns may need to be set aside. A move below the 200-day moving average could present a buying opportunity for BROS stock, which, while still highly valued, benefits from earnings growth and expansion while being less affected by coffee price fluctuations. Read This Story Online | Stay alert for Elon Musk and the Department of Government Efficiency's next move …
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| Written by Nathan Reiff 
As of March 11, U.S. markets are quickly approaching correction territory with several consecutive days of selloffs amid broad uncertainty about tariffs and other economic factors. In these scenarios, investors may be inclined to sell before prices drop too far, holding cash or equivalents until the market seems safe enough to enter once again; they may also turn to defensive plays in the meantime. One alternative strategy that takes a more proactive approach is to target companies with maximum profitability. By focusing on highly profitable firms, investors may succeed in identifying companies positioned to give up some of that profitability in uncertain economic times while still remaining profit-generating overall. A key metric to determine profitability is the return on equity (ROE), calculated by dividing a company's annual net income by its shareholders' equity. Higher ROEs typically indicate a company is more efficient at generating net income for every dollar of shareholder equity and, thus, more profitable. Major Earnings Rally and an Equally High ROE Power Solutions International Inc. (NASDAQ: PSIX) designs and builds power systems and electrical power generation equipment for a range of applications, including agricultural products, industrial machinery, and construction vehicles. Net sales growth has accelerated in recent periods, and the company reported an exceptional 122% year-over-year improvement in net income for the latest quarter as of March 11, 2025. Driving some of these gains is the company's work in the data center industry, which is rapidly growing in light of the continued surging demand for AI applications. Based on its fundamentals and the company's aggressive shift toward higher growth markets and away from some of its areas of business with less growth potential, Power Solutions' 12-month rally of about 1,350% makes sense. The company's ROE is an astronomical 293.4%. Typically, an ROE at this level indicates potential issues with debt—for example, a company that has taken on excessive amounts of debt in a bid to boost earnings performance. For PSIX, the current ratio of 1.02 suggests that the firm is likely presently able to handle its debt level, and its dramatic boost to net income may help to explain the unusually high ROE as well. Resilience Despite 2025 Setback: Strong Margins, High ROE, and Analyst Optimism Drive Docebo Inc. (NASDAQ: DCBO) offers a cloud- and AI-based learning management system. Shares of the company have been hammered early in 2025 by lower-than-expected forward revenue guidance amid customer downgrades. Still, the company's platform is in demand, it has solid margins, and it beat analyst expectations on both top- and bottom-line performance in the latest quarter. Docebo's ROE of 50.2% also may be an indicator that it has the capacity to continue to generate strong revenues as the e-learning space keeps growing. It carries minimal debt relative to equity, with a debt-to-equity ratio of just 0.01, ensuring financial stability as long as it retains customers and adapts to the evolving needs of LMS users. Wall Street analysts are optimistic that Docebo will be able to do just that. Ten out of 11 analysts covering the company rate it as a Buy. High ROE, Tariff Benefits, and Analyst Price Target Suggest Hefty Upside A third high-ROE company—and another favored by analysts—is Century Aluminum Co. (NASDAQ: CENX), which produces aluminum products primarily in the United States. More than either of the companies above, Century is likely to benefit from continued Trump administration tariffs on aluminum and other resources. Indeed, the company's strong position and domestic base of operations could see it double or even triple profits should the aluminum tariff environment remain unchanged. Of course, extreme volatility in U.S. tariffs has been a hallmark of 2025 thus far, so this is not a guarantee. Century's ROE of 13.4% suggests impressive profitability and indicators that it may be undervalued. The firm's price-to-sales ratio is a modest 0.8, for instance. As of March 11, CENX stock had already risen just about 61% in the last year, but several analysts expect it to continue rising. With a consensus price target of $24.33, analysts rating Century predict it could rise by more than 34% above current levels. Read This Story Online | |
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