MW How to set up financial plans to protect love ones from themselves
By Philip van Doorn
Also: A buy recommendation for Tesla's stock, Nvidia's compelling valuation, and what Apple CEO Tim Cook might do following the big iPhone blunder
Quentin Fottrell - the Moneyist - answers a variety of questions from readers on an almost daily basis. Many of these questions are about conflicts within families over money, while others touch upon investing, retirement planning or other aspects of financial life.
This week, he helped a couple working on an estate plan. They were worried that their son, who has been married for 12 years, would be unable to manage his money responsibly and end up "on the street when he is 70."
Fottrell presented a variety of approaches to setting up a spendthrift trust not only to make sure your heirs don't run out of money, but to address their specific needs and problems, and even to encourage them to work.
More advice from the Moneyist:
-- 'I'm absolutely terrible at managing money': I'm 35 with zero savings and $8,000 debt. How do I turn my life around?
-- 'My daughter harasses me and wants to know where I go': She's after my money. How do I protect myself?
-- 'I'm considering marriage in my mid-60s': Could I be held responsible for my spouse's medical debt?
Tesla stands alone
No, Tesla Inc. $(TSLA)$ isn't this year's worst-performing stock in the S&P 500 SPX. That honor goes to Deckers Outdoor Corp. $(DECK)$, whose stock has declined 43% this year through Thursday - though Tesla has been the second-worst performer with a 41.5% decline. Neither of these companies pays a dividend on its common shares. (Though all investment returns in this article include reinvested dividends.)
This year's decline for Deckers follows an 82% gain in 2024. Investors have been concerned about weakening demand for the company's footwear.
For Tesla, we can add some context by comparing the performance of its stock with others among the largest 20 components of S&P 500 by market capitalization. But a further look back is justified, because the S&P 500 took an 18.1% tumble in 2022 before showing big gains in 2023 and 2024. The table below includes returns from the end of 2021 through Thursday in the right-most column. And that column is an eye-opener for people interested in Tesla's stock. (Returns for the full S&P 500 are at the bottom.)
Company Ticker 2025 return through March 20 2024 return 2023 return 2022 return Return from end of 20221 through March 20, 2025 Apple Inc. AAPL -14.4% 31% 49% -26% 23% Nvidia Corp. NVDA -11.7% 171% 239% -50% 304% Microsoft Corp. MSFT -8.0% 13% 58% -28% 18% Amazon.com Inc. AMZN -11.1% 44% 81% -50% 17% Alphabet Inc. Class A GOOGL -13.9% 36% 58% -39% 13% Meta Platforms Inc. META 0.2% 66% 194% -64% 75% Broadcom Inc. AVGO -17.6% 110% 104% -13% 207% Eli Lilly and Co. LLY 9.3% 33% 61% 34% 215% Tesla Inc. TSLA -41.5% 63% 102% -65% -33% Berkshire Hathaway Inc. Class B BRK.B 16.6% 27% 15% 3% 77% Walmart Inc. WMT -5.0% 74% 13% 0% 86% JPMorgan Chase & Co. JPM 0.2% 44% 31% -13% 65% Visa Inc. V 7.6% 22% 26% -3% 61% Exxon Mobil Corp. XOM 8.7% 11% -6% 87% 113% Mastercard Inc. MA 2.0% 24% 23% -3% 52% UnitedHealth Group Inc. UNH 1.5% -2% 1% 7% 7% Oracle Corp. ORCL -8.1% 60% 31% -5% 84% Netflix Inc. NFLX 6.7% 83% 65% -51% 58% Costco Wholesale Corp. COST -2.2% 40% 49% -19% 65% Procter & Gamble Co. PG 0.6% 17% -1% -5% 11% Source: FactSet
Tesla's stock has lost a third of its value since the end of 2021. It is the only stock on the above list to show a decline for that period.
Read: Tesla's stock is having its worst stretch ever, and the bad news keeps coming
The case for buying Tesla now
Wedbush analyst Dan Ives has been a relentless Tesla cheerleader for years - but in a note to clients on Wednesday, he took the company's chief executive, Elon Musk, to task for the stock's decline this year. Ives recommended Musk make these two moves to stop Tesla's slide, but stuck with his outperform rating and his $550 price target for the stock. That is the highest price target among 58 analysts covering Tesla at brokerage or research firms polled by FactSet.
On Wednesday, Cantor Fitzgerald analyst Andres Sheppard upgraded Tesla to an "overweight" rating with a $425 price target, which would make for an 80% gain from Tesla's closing price of $236.26 on Thursday. Sheppard listed three coming events he expects to lift Tesla's stock.
More coverage of Tesla and Musk:
-- Elon Musk urges Tesla employees to hang on to their stock as he lays out 'sustainable abundance' vision
-- Tesla's stock gets its lowest price target from a bull. It still implies 39% upside.
-- These funds offer exposure to SpaceX after successful return of NASA astronauts
Nvidia's compelling valuation
Nvidia Corp.'s stock $(NVDA)$ has declined 12% this year, but it has risen fourfold since the end of 2021. So how can a case be made that this stock is trading at a compelling valuation? Let's take a look at forward price-to-earnings valuations for the largest 10 companies in the S&P 500 and the full index, along with projected two-year compound annual growth rates (CAGR) for revenue and earnings among analysts polled by FactSet.
The forward P/E ratios are share prices divided by rolling consensus 12-month earnings-per-share estimates. The revenue and EPS growth projections are based on consensus estimates for full years from calendar 2024 through 2026, with adjustments made by FactSet for companies (such as Nvidia and Apple) whose fiscal years don't match the calendar.
Company Ticker Forward P/E Forward P/E at end of 2024 Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 Apple Inc. AAPL 27.7 33.0 6.5% 15.4% Nvidia Corp. NVDA 24.7 31.3 41.2% 41.9% Microsoft Corp. MSFT 26.6 29.9 13.7% 14.7% Amazon.com Inc. AMZN 29.4 35.2 10.0% 17.6% Alphabet Inc. Class A GOOGL 17.6 21.1 11.2% 12.8% Meta Platforms Inc. META 22.7 23.0 14.1% 9.8% Broadcom Inc. AVGO 26.9 35.3 17.1% 112.0% Eli Lilly and Co. LLY 34.5 34.2 25.8% 58.8% Tesla Inc. TSLA 79.9 120.9 17.2% 36.0% Berkshire Hathaway Inc. Class B BRK.B 25.3 22.5 2.3% -27.9%
MW How to set up financial plans to protect love ones from themselves
By Philip van Doorn
Also: A buy recommendation for Tesla's stock, Nvidia's compelling valuation, and what Apple CEO Tim Cook might do following the big iPhone blunder
Quentin Fottrell - the Moneyist - answers a variety of questions from readers on an almost daily basis. Many of these questions are about conflicts within families over money, while others touch upon investing, retirement planning or other aspects of financial life.
This week, he helped a couple working on an estate plan. They were worried that their son, who has been married for 12 years, would be unable to manage his money responsibly and end up "on the street when he is 70."
Fottrell presented a variety of approaches to setting up a spendthrift trust not only to make sure your heirs don't run out of money, but to address their specific needs and problems, and even to encourage them to work.
More advice from the Moneyist:
-- 'I'm absolutely terrible at managing money': I'm 35 with zero savings and $8,000 debt. How do I turn my life around?
-- 'My daughter harasses me and wants to know where I go': She's after my money. How do I protect myself?
-- 'I'm considering marriage in my mid-60s': Could I be held responsible for my spouse's medical debt?
Tesla stands alone
No, Tesla Inc. $(TSLA.UK)$ isn't this year's worst-performing stock in the S&P 500 SPX. That honor goes to Deckers Outdoor Corp. (DECK), whose stock has declined 43% this year through Thursday - though Tesla has been the second-worst performer with a 41.5% decline. Neither of these companies pays a dividend on its common shares. (Though all investment returns in this article include reinvested dividends.)
This year's decline for Deckers follows an 82% gain in 2024. Investors have been concerned about weakening demand for the company's footwear.
For Tesla, we can add some context by comparing the performance of its stock with others among the largest 20 components of S&P 500 by market capitalization. But a further look back is justified, because the S&P 500 took an 18.1% tumble in 2022 before showing big gains in 2023 and 2024. The table below includes returns from the end of 2021 through Thursday in the right-most column. And that column is an eye-opener for people interested in Tesla's stock. (Returns for the full S&P 500 are at the bottom.)
Company Ticker 2025 return through March 20 2024 return 2023 return 2022 return Return from end of 20221 through March 20, 2025
Apple Inc. AAPL -14.4% 31% 49% -26% 23%
Nvidia Corp. NVDA -11.7% 171% 239% -50% 304%
Microsoft Corp. MSFT -8.0% 13% 58% -28% 18%
Amazon.com Inc. AMZN -11.1% 44% 81% -50% 17%
Alphabet Inc. Class A GOOGL -13.9% 36% 58% -39% 13%
Meta Platforms Inc. META 0.2% 66% 194% -64% 75%
Broadcom Inc. AVGO -17.6% 110% 104% -13% 207%
Eli Lilly and Co. LLY 9.3% 33% 61% 34% 215%
Tesla Inc. TSLA -41.5% 63% 102% -65% -33%
Berkshire Hathaway Inc. Class B BRK.B 16.6% 27% 15% 3% 77%
Walmart Inc. WMT -5.0% 74% 13% 0% 86%
JPMorgan Chase & Co. JPM 0.2% 44% 31% -13% 65%
Visa Inc. V 7.6% 22% 26% -3% 61%
Exxon Mobil Corp. XOM 8.7% 11% -6% 87% 113%
Mastercard Inc. MA 2.0% 24% 23% -3% 52%
UnitedHealth Group Inc. UNH 1.5% -2% 1% 7% 7%
Oracle Corp. ORCL -8.1% 60% 31% -5% 84%
Netflix Inc. NFLX 6.7% 83% 65% -51% 58%
Costco Wholesale Corp. COST -2.2% 40% 49% -19% 65%
Procter & Gamble Co. PG 0.6% 17% -1% -5% 11%
Source: FactSet
Tesla's stock has lost a third of its value since the end of 2021. It is the only stock on the above list to show a decline for that period.
Read: Tesla's stock is having its worst stretch ever, and the bad news keeps coming
The case for buying Tesla now
Wedbush analyst Dan Ives has been a relentless Tesla cheerleader for years - but in a note to clients on Wednesday, he took the company's chief executive, Elon Musk, to task for the stock's decline this year. Ives recommended Musk make these two moves to stop Tesla's slide, but stuck with his outperform rating and his $550 price target for the stock. That is the highest price target among 58 analysts covering Tesla at brokerage or research firms polled by FactSet.
On Wednesday, Cantor Fitzgerald analyst Andres Sheppard upgraded Tesla to an "overweight" rating with a $425 price target, which would make for an 80% gain from Tesla's closing price of $236.26 on Thursday. Sheppard listed three coming events he expects to lift Tesla's stock.
More coverage of Tesla and Musk:
-- Elon Musk urges Tesla employees to hang on to their stock as he lays out 'sustainable abundance' vision
-- Tesla's stock gets its lowest price target from a bull. It still implies 39% upside.
-- These funds offer exposure to SpaceX after successful return of NASA astronauts
Nvidia's compelling valuation
Nvidia Corp.'s stock (NVDA) has declined 12% this year, but it has risen fourfold since the end of 2021. So how can a case be made that this stock is trading at a compelling valuation? Let's take a look at forward price-to-earnings valuations for the largest 10 companies in the S&P 500 and the full index, along with projected two-year compound annual growth rates (CAGR) for revenue and earnings among analysts polled by FactSet.
The forward P/E ratios are share prices divided by rolling consensus 12-month earnings-per-share estimates. The revenue and EPS growth projections are based on consensus estimates for full years from calendar 2024 through 2026, with adjustments made by FactSet for companies (such as Nvidia and Apple) whose fiscal years don't match the calendar.
Company Ticker Forward P/E Forward P/E at end of 2024 Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 Apple Inc. AAPL 27.7 33.0 6.5% 15.4% Nvidia Corp. NVDA 24.7 31.3 41.2% 41.9% Microsoft Corp. MSFT 26.6 29.9 13.7% 14.7% Amazon.com Inc. AMZN 29.4 35.2 10.0% 17.6% Alphabet Inc. Class A GOOGL 17.6 21.1 11.2% 12.8% Meta Platforms Inc. META 22.7 23.0 14.1% 9.8% Broadcom Inc. AVGO 26.9 35.3 17.1% 112.0% Eli Lilly and Co. LLY 34.5 34.2 25.8% 58.8% Tesla Inc. TSLA 79.9 120.9 17.2% 36.0% Berkshire Hathaway Inc. Class B BRK.B 25.3 22.5 2.3% -27.9%
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2025 14:40 ET (18:40 GMT)
MW How to set up financial plans to protect love -2-
S&P 500 SPX 20.5 21.6 6.1% 13.5%
Source: FactSet
The EPS growth estimate for Berkshire Hathaway Inc. $(BRK.B)$ is negative, in part because the company booked significant unrealized gains on its securities holdings, as required under GAAP reporting rules. This requirement causes the company's GAAP profits to "swing wildly and unpredictably," as explained by Berkshire CEO Warren Buffett in his annual letter to shareholders. The unrealized gains (or losses) aren't included in analysts' EPS estimates.
Getting back to Nvidia, the stock's forward P/E valuation has declined to 24.7 from 31.3 at the end of last year. And the company has, by far, the highest projected revenue growth rate from 2024 through 2026, with the third-highest projected EPS growth rate. The expected growth rates are so much higher than those of the full index, at the bottom of the table, that Nvidia's P/E valuation premium to the S&P 500's weighted P/E of 20.5 seems modest.
On the other hand, Mark Hulbert used a market-data model to explain why stocks in the semiconductor industry - which have seen a remarkable run led by Nvidia - could be headed for a crash.
Here is recent coverage of what was a big week for Nvidia, whose CEO Jensen Huang spoke for two hours during the company's artificial-intelligence conference on Tuesday:
-- Nvidia's big GTC event had no big surprises, but here is where the bulls and bears disagree
-- Nvidia's GTC keynote didn't boost the stock. Why Wall Street wasn't so impressed.
-- Nvidia's stock nears a 'death cross.' Should investors be worried?
-- Nvidia CEO Huang praised this Trump policy
Apple's remedy
Apple Inc. $(AAPL)$ isn't known for making terrible mistakes with its products - but the company's reputation suffered when it released the iPhone 16 because of a series of bad decisions by executives, according to a well-known blogger who has been tracking the company for years.
Therese Poletti covered analysts' concerns about Apple and the steps its CEO Tim Cook might take to address the company's perceived lack of innovation.
More tech news
Here is more coverage of technology players from the MarketWatch Companies team:
-- Intel's new CEO is putting his money where his mouth is
-- Reddit's stock has soared 170% since the IPO. Here's why the honeymoon may now be over.
-- Micron gets boost with surging AI memory-chip sales
Is it time to convert to a Roth IRA?
A regular individual retirement account is funded with pretax money, which means you avoid paying income taxes on the amount you contribute that year. Then the money can grow tax-free while it is in the account, invested as you see fit. You are allowed to begin making withdrawals from the IRA without a penalty starting during the year when you turn 591/2. Those distributions are taxable income. All of this holds true for other types of tax-deferred retirement accounts, such as a 401(k) or a 403(b).
With a Roth IRA, you contribute after-tax money, which means you have no tax benefit for the money you put in. But the money in the account is never taxed when you eventually begin to take distributions.
And you can convert a regular IRA or other tax-deferred retirement account to a Roth IRA if you would like to take your tax lumps early, rather than facing taxes on the income later down the line. Deciding whether or not to convert, or on the timing of a conversion, is complicated. This week in the Fix My Portfolio column, Beth Pinsker worked through the decision points and explained why a down stock market is the ideal time to pull the trigger on a Roth conversion.
Related planning: Should I take money from my Roth IRA or leave it to my heirs?
Calling a bottom
Regardless of political, economic or market developments, there are always warnings in the financial media that stock prices will decline. But broad market pullbacks have always reversed. Michael Brush shared four reasons the recent stock-market decline has ended or is close to ending.
Related:
-- The 'Squid Game' market: Risky leveraged ETFs boomed in 2024. Now comes the bust.
-- Investors dumped U.S. stocks at the fastest pace on record last week, according to this Wall Street survey
For bottom-feeders:
-- Why cruise stocks are a buy now, according to this analyst
-- Southwest's stock is on a roll. This analyst explains why he's no longer bearish.
What will really change if the Education Department is shuttered?
President Trump has said he wants to shut down the U.S. Education Department completely, and half of the department's workers have already been laid off. But it turns out that most of what the department does will still need to take place under laws and statutes that Trump will not be able to do away with, as Jillian Berman explained.
The Fed and the economy
Following its two-day policy meeting this week, the Federal Reserve's Federal Open Market Committee left the federal-funds interest rate unchanged at a target range of 4.25% to 4.50% on Wednesday.
Here is a summary of reactions to the announcement and other economic news:
-- The seven words from the Fed that say it all about the Trump economy
-- Fed sees higher inflation and slower U.S. economy due to uncertainty tied to Trump tariffs
-- The Fed's interest-rate pause has a silver lining for worried Americans - if they make this move
-- U.S. retail sales barely rise, but investors see glimmer of good news in seemingly weak report
-- The word from U.S. companies to Wall Street in new Trump era is 'uncertainty'
Social Security developments
You might be worried any time you have to deal with a government department, because of how difficult it can be to make a phone call to ask a question, or to get an appointment to meet with someone. Staffing cutbacks at Social Security might be especially worrisome.
Beth Pinsker shared tips on how to address problems or errors related to Social Security and how to make the best use of your time when applying for benefits.
More coverage of Social Security:
-- Social Security pushes some beneficiaries to online or in-person meetings
-- Here's how many Social Security workers are taking a buyout - so far
-- Yes, even Republicans want to raise Social Security taxes
Can AI make you a better gambler?
This year's NCAA men's college basketball tournament has already started - but if you participate in an annual March Madness pool, you should read this story by Weston Blasi:
We asked AI to fill out a March Madness bracket. It picked the type of Final Four that rarely happens.
More on the big games:
-- Women's March Madness teams are being paid for the first time - but they're splitting $200 million less than the men
-- Why sportsbooks like FanDuel and DraftKings really need March Madness bettors to lose this year
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-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 21, 2025 14:40 ET (18:40 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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