The madman’s point of view

Pfizer’s (NYSE: PFE) COVID-19 vaccine has become a best-seller, helping the company achieve record annual revenue of more than $100 billion in 2022.

But as demand for the vaccine has declined, so have Pfizer’s revenue opportunities – and upcoming patent expirations on other top-selling products have compounded Pfizer’s woes, sending its shares down more than 30%. % over the last three years.

Pfizer faces some challenges, but it has planned for this moment. It ends a record period of product launches by attempting to bring 19 new products or indications to market in just 18 months. It predicts that recent product launches will add $20 billion to revenue in 2030.

Meanwhile, Pfizer has high hopes for its oncology business following the acquisition of antibody-drug conjugate specialist Seagen. Pfizer has set a goal of delivering at least eight blockbuster oncology drugs by 2030 and doubling the number of cancer patients treated with its drugs.

The new growth drivers won’t produce results overnight, but this looks like a promising buying opportunity if you are a patient investor who wants to benefit from this pharmaceutical company’s new era of growth in the future.

In the meantime, you can take advantage of the dividend which recently returned 5.7%. (The Motley Fool owns shares of Pfizer and recommends.)

Ask the Fool

From LR, Warwick, RI: What do you think of the investment strategy I’m considering: investing in volatile stocks, selling them after a slight rise, then buying them back after a decline? I would only keep them for a few weeks or months at a time.

This is a risky approach that will require a lot of energy and may not prove as lucrative as expected. After all, many good stocks will continue to rise for a long time, and if you sold early, you’ll miss out on a lot of their gains.

Another consideration is that most of your gains will be taxable at the short-term capital gains rate (for assets held for one year or less); This is your ordinary income rate, which could be 12%, 22%, 24%, 32% or more. The long-term capital gains rate is lower: 0% or 15% for most of us, and 20% or more for high earners.

We prefer to build long-term wealth by investing in wonderful companies at good or fair prices and then hanging on for many years, not weeks or months.

It’s best to just invest in companies that you truly understand and believe in, with the goal of hanging on for years. Otherwise, you’re just guessing and hoping.

From RT Cody, Wyoming: What is “profit taking”?

You make profits if you sell a stake whose value has increased. For example, let’s say you increased your shares of Home Surgery Kits Inc. (ticker: OUCHH) by 50%. If you sell them, you take your profits. If you don’t sell and hang on, you’ll end up with a “paper” – or unrealized – gain. Selling is when you “realize” your profit.

The school of fools

Given the heights inflation reached a few years ago, many of us are wondering how best to counter it in our investments. (Although inflation has averaged about 3% per year over long periods, it has risen to 4.7% in 2021 and 8% in 2022.) It is essential to keep inflation at bay. mind when planning your retirement, as even a 3% annual inflation rate can decline. the purchasing power of your dollars by about half over 25 years. So what might cost you $1,000 at the start of your retirement could cost you more than $2,000 towards the end of it.

If you’re not prepared, this can be a big problem, especially since many retirees survive on largely fixed incomes. So what can you do? Well, for starters, you need to understand that with any investment that earns, say, 2% while inflation is at 3%, your money is essentially losing value over time. Healthy, growing companies that pay dividends are a good option because they tend to have stock prices that increase over time while paying dividends that also increase – often at a rate that equals or exceeds the inflation.

Many good companies have dividends yielding 3% or more. PepsiCo, for example, recently fell 3.1%, while Chevron fell 4.3%. Over the past five years, PepsiCo has increased its dividend by an annual average of 7.2%, while Chevron has increased its dividend by an average of 6.5%. An easy way to invest in a range of dividend payers is with a dividend-focused mutual fund or exchange-traded fund (ETF). Two examples are the iShares Core Dividend Growth ETF (DGRO) and the Schwab US Dividend Equity ETF (SCHD), which recently returned 2.2% and 3.6%, respectively – and have offered dividend payouts that increase over time .

Some bonds also struggle with inflation. TIPS (Treasury Inflation Protected Securities), for example, are bonds established to account for inflation. Some annuities allow you to opt for annual increases that can help you keep up with inflation. And Social Security benefits are automatically adjusted each year for inflation.

My stupidest investment

From Norm, online: I’ve made many regrettable investment decisions since 1996. Some, however, may not be as bad as I initially thought. I think my worst time was during the dot-com craze. I owned shares of WebMD and Amazon.com, among others. When the bankruptcy happened, my broker called me and said, “Goodbye, Norm, I’m leaving!” Completely discouraged, I sold everything and in 2003 I started again.

I had some regrets about selling my Amazon shares; If I had held on to those 50 shares, they would be worth over $9,000 today. But upon review, my current hybrid portfolio of stocks, ETFs, mutual funds, and bonds has performed very well. Managing my numbers is one way to keep perspective. I realized that it’s the whole that counts, not the fumbles or missed opportunities.

The Fool replies: Even the best investors make mistakes and don’t realize all the profits they can. You did well and learned some great lessons. Note that Amazon did a 20-for-1 stock split in 2022, so your 50 shares would have become 1,000 shares, which would be worth over $180,000 at the time of this writing. But it’s actually smart to focus on what you’ve accomplished rather than your missteps – and anticipate expected growth.

Who am I?

My roots go back to the founding of a brewery in England in 1777. In 1946, the founder of Pan American Airways (“PanAm”) launched a luxury hotel brand bearing my official name. The Holiday Inn brand was launched in 1952 and was the first hotel brand to franchise, in 1954.

These hotel chains and others, like Crowne Plaza and Candlewood Suites, found themselves under my roof today. Today, I am one of the largest hotel companies in the world, comprising more than 6,400 hotels with more than 950,000 rooms and employing approximately 375,000 people.

Who am I?

Don’t remember last week’s question? Find it here.

Last week’s response: Fortune Brand Innovations