• After losing a nonprofit job, Jode Blank pursued a six-figure consulting career but burned out.
• The nonprofit role involved travel and cultural exchanges, which pulled her away from home often.
• She now works at a med spa and is building an AI automation business to combine her skillset.

I didn't realize it while I was there, but I lived my dream life when I worked at a nonprofit in the J-1 Visa Work and Travel program.

I placed international students from all over the world into jobs throughout the Midwest. I often had students stay with our family in our home, and it was a unique way for my kids to learn about other cultures.

When I lost this job after 13 years, I took it hard and aimed high for a new six-figure consulting gig so I wouldn't lose out on income. I realized that wasn't the right fit — now I work the front desk at a med spa and work on my own business on the side.

I saw the world like a local at the nonprofit

We traveled and experienced the cultures through our local partnerships in each country we visited. This job afforded me the ability to travel when I wouldn't have been able to otherwise. I didn't make much, about $52,000 in my last year, but I always considered the travel perks a benefit beyond my wages.

We learned the political views of the locals and had real conversations about the relationships between our country and theirs. I often left fascinated and with a deeper understanding of how other cultures view the US.

In 2019 and 2020, I had incredibly busy years

Over five months, I traveled to New York and Washington, DC, as well as to China, Italy, and Romania. Although I loved the travel, it put a ton of pressure on my family.

When I was in Italy in 2020, things were starting to shut down in Europe. I foresaw what was coming and knew it would happen in the US soon.

In June of 2020, because there was no travel, our entire company shut down, and I lost my job. Even though I knew it was coming, it was still devastating.

I was homeschooling my kids and didn't think I could manage starting a new job while trying to educate them during lockdown. I earned a copywriting certification, got referrals from within that certification program, and took on some consulting work for influencers.

I was making six figures by my second full year as a consultant

I worked all the time, and the clients I worked with were demanding and didn't respect my boundaries. I often got messages while on vacation, on weekends, and late into the evenings.

I burned out fast, sometimes working 16 to 20-hour days. The money wasn't worth the headaches, and I developed chronic health conditions from the long hours at my desk without any physical activity.

I hated it. I couldn't sleep, and I always had the weight of other people's businesses on my mind.

In 2024, I gave it all up

After four years, I let the last of my clients go and left the digital marketing industry. I never felt better, except that I had no income and no plan. I just knew I was done working with high-maintenance influencers.

I started searching for a new career path. I'd worked from home for 18 years, so it was hard to think about going back to an office. I felt like it would crush my soul.

I found a job as a cryotherapy spa technician

It was a low-wage, $15-an-hour job with the possibility of commissions from sales. It sounded like a breath of fresh air — just the escape I was looking for. I could go home and sleep at night without worrying about everyone else's business. I applied and started working two days a week and every other weekend.

I thought it would be a temporary job to fill an income gap while I got my own business off the ground. I decided to build an AI automation business because it would allow me to use my writing skills and tech interests to help people generate better leads. It would also allow me to work with many different types of businesses that are not internet marketing, which I was looking to move away from.

I loved my job at the spa

Many of the clients became friends, and before I knew it, my schedule was filled and I was making sales regularly.

The other added benefit is that I get to use the cryotherapy equipment on myself. I've lost inches around my waist, and it's tightened up my jawline. I have so much more confidence, and I'm focusing on my health and well-being — something I had put to the wayside while I was working as a consultant.

Working at the spa has also given me time to reflect on my tendency toward workaholism

As I turned 50, I needed to consider how I wanted to spend the last 15 years of my career. Upon reflection, I loved the people I worked with at the nonprofit and how I got to experience the world. Truthfully, though, I had to depend on a lot of people when I was gone.

My parents and others helped me out with my kids while I traveled, and I missed a lot. My kids often sobbed when I would leave, and my husband dreaded it. Even if I hadn't lost my job due to the lockdown, I wouldn't have been able to work at the nonprofit much longer.

I'm still figuring out what's next for me

I know I can't stay at the spa forever. My AI automation software business is picking up, but I'm acutely aware of my old patterns of workaholism resurfacing.

Just when I think I have it figured out, we're hearing rumblings of economic downturn. It's possible I may stay at the spa longer than I originally expected.

I'll adjust my automation business to strictly working with corporations at a certain revenue level, so I know they can afford my services. Right now, I'm taking it day by day.

Do you have a story to share about recovering from burnout? Contact this editor at [email protected].

We're nearly at the midway point of the year, and the S&P 500 is essentially flat through June 17, up just 1.7%.

The broad market index nearly entered a bear market in April, following the announcement of the "Liberation Day' tariffs, but has rallied back since then to recoup those losses.

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However, not every stock on the index has been a winner. In fact, one popular footwear stock is down nearly 50% for the year through June 17.

That's Deckers Outdoor (NYSE: DECK), the maker of Hoka running shoes and Ugg boots, which is down 49.5% year-to-date. Over a long time frame, Deckers is one of the best-performing stocks on the market -- it had returned more than 10,000% at one point.

After delivering strong growth in recent years, Deckers stock hit a wall in January when its guidance was worse than expected. When the company provided its following update in May, its growth was clearly slowing, and it faced a new challenge with President Donald Trump's tariffs putting pressure on the apparel and footwear industries.

Image source: Getty Images.

Deckers' current challenges

In its fiscal fourth quarter, ended March 31, Deckers' revenue rose just 6.5%, which compared to nearly 20% growth in the first three quarters of the year.

Growth at Hoka slowed from nearly 30% in the first three quarters of the year to just 10% in the fourth quarter, potentially a sign that a resurgent Nike is grabbing back market share in running. Ugg, which remains Deckers' largest brand, grew just 3.6% in the quarter compared to 13% for the full year.

What really threw investors off was the company's guidance, as management did not give full-year guidance due to macroeconomic uncertainty related to tariffs. For the first quarter, the company expects revenue of $890 million to $910 million, representing 9% growth at the midpoint. However, it expects earnings per share to fall from $0.75 to between $0.62 and $0.67.

It sees its gross margin falling 250 basis points due to higher freight costs from tariffs, increased promotional activity, and channel mix headwinds with wholesale outgrowing DTC, and it faces difficult comparisons with a year ago.

For its two core brands, Deckers expects Hoka to grow by at least low double digits while Ugg sales should increase by at least mid-single digits.

Why this could be a great buying opportunity for Deckers

A 50% sell-off in less than six months often indicates a broken business, but that isn't the case with Deckers. The company seems to face a mostly temporary setback due to pressure related to tariffs and a cooling off in the growth rate at Hoka.

With its share price cut in half, Deckers now trades at an attractive price-to-earnings valuation of just 16, meaning it trades at a substantial discount to the S&P 500. Management is also taking advantage of that by buying back stock, increasing its share repurchase authorization to $2.5 billion, which represents 16% of its market cap.

In fiscal 2025, the company repurchased $567 million worth of its stock, and bought back $85 million in the first quarter through May 9.

Deckers is well-positioned to buy back its stock as it has no debt, $1.9 billion in cash, and a reasonable assets-to-liabilities ratio of 3.5.

Over the long term, Deckers looks well-positioned to recover as its two core brands, Hoka and Ugg, have differentiated themselves, and have long track records of growth. Ugg also overcame an earlier slowdown amid concerns that its brand was a fad.

At the current valuation, even modest profit growth will be enough to make the stock a winner. The tariff-related headwinds will eventually fade, and Deckers' growth should return at that point.

Should you invest $1,000 in Deckers Outdoor right now?

Before you buy stock in Deckers Outdoor, consider this:

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Jeremy Bowman has positions in Nike. The Motley Fool has positions in and recommends Deckers Outdoor and Nike. The Motley Fool has a disclosure policy.

The best growth stocks are the ones you can just forget about. Buy them once and leave them alone. The road ahead may be bumpy, but these companies should be able to overcome their challenges in the long run. And since many investors don't have this unshakable long-term perspective, the stocks may be undervalued from time to time.

Here are some of these cruise-control growth stocks from my own portfolio. Some of them are cheap these days and others aren't, but I'd be happy to start brand new positions in all of them today. Except I can't, because I already own them and have no plans to sell my shares anytime soon.

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Alphabet keeps reinventing itself

I bought my first Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) share in December 2010, when the company still was called Google. By June 17, 2025, those stubs have gained 1,065%. I'm not complaining.

If anything, I only wish I had picked up some Google stock even earlier. The trillion-dollar tech giant you see today was once a little upstart with advanced technology and big ambitions. The company's mission is still to "organize the world's information and make it universally accessible and useful," and that's a goal without a time limit.

Alphabet is both very profitable and extremely flexible. That rare combination sets the company up for decades of continued business growth. The Alphabet you see in 2040 or 2050 may look very different from the online search and advertising specialist you've seen so far, and that's alright. This company does more than simply rolling with the market's punches -- Alphabet usually leads the charge into whatever new era comes next, such as high-powered smartphones and artificial intelligence (AI).

Image source: Getty Images.

Fiverr's big growth dreams

Freelance services facilitator Fiverr International (NYSE: FVRR) is a different story. My first Fiverr share has fallen a hair-raising 87% since January 2021, and the best performer among five additions to my position is down by 27% in three years.

So the stock is struggling, but have you seen Fiverr's financial results? Here's a taste of its steady revenue growth and skyrocketing cash flows over the past three years:

FVRR Revenue (TTM) data by YCharts

Top-line sales increased by 24% over this period while free cash flows tripled. I keep coming back to this stock whenever I have fresh cash to invest, because it often looks undervalued.

Like Alphabet, Fiverr has a beefy long-term target. This company wants to "change how the world works together." The effort so far has focused on matching online freelancers with unfilled gigs. Fiverr is all about digital service delivery at this point, from translation and graphic design to music recordings and effective AI prompts.

The growth opportunity is enormous. With $405 million of total revenues in the last four quarters, Fiverr controls less than 0.2% of this addressable market. Most of today's freelancing is managed offline, via traditional channels such as personal contacts, phone networks, or printed ads. That doesn't sound like a sustainable future to me, giving Fiverr a fantastic growth opportunity.

I can't wait for my Fiverr investments to turn profitable, but I also can't complain about having this exciting stock available at low prices. Fiverr's stock trades at just 12 times free cash flows and 10.8 times forward earnings estimates today.

So I keep buying Fiverr stock while it's cheap. Setting up just a single purchase of this undervalued growth stock will serve you well over time.

Netflix's evolution pays off for patient investors

Here's another classic set-and-forget investment.

The oldest Netflix (NASDAQ: NFLX) shares in my portfolio today have gained 10,120% over the years. I picked them up at a discount during the Qwikster panic of 2011. The media-streaming veteran is often misunderstood by bearish investors, who often see it as a risky play on unproven business ideas. I see long-term opportunity and innovation in the same ideas.

The company that dominated video rentals and destroyed Blockbuster moved on to a lightweight digital streaming model, later buttressed with a costly but effective content production strategy. Netflix has embraced ad-supported subscriptions more recently, focusing on profitable growth for the first time. There's still a lot of world left to conquer out there, and Netflix is still trying brand new business tactics. Yes, the stock is setting new all-time highs on a regular basis and it rarely looks cheap. But it's also the gift that keeps on giving in the long haul.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Fiverr International, and Netflix. The Motley Fool has positions in and recommends Alphabet, Fiverr International, and Netflix. The Motley Fool has a disclosure policy.

Over the last several months, a new pocket of the AI realm called quantum computing has started to garner quite a bit of attention from the investment community. What's unique, however, is that the usual suspects of Nvidia, Microsoft, Alphabet, and Amazon aren't really pegged to the rising interest in quantum computing technology.

Rather, a new cohort of rising stars such as Rigetti Computing, D-Wave Quantum, and IonQ (NYSE: IONQ) are among the most popular quantum computing stocks right now. With shares down by 25% from their peak over the last year, IonQ stock trades for roughly $40 as of this writing. Is now a good opportunity to pounce on the stock?

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IonQ's popularity is fueling interest in quantum computing stocks, but...

Quantum computing is not a widely used application in artificial intelligence (AI) today. Yet despite its developmental stage, global management consulting firm McKinsey & Company is forecasting that quantum computing could be a $131 billion opportunity in the coming decades. With the potential for such enormous upside, it's not entirely surprising that investors were quick to look at which companies are involved with quantum computing development.

One reason that I think IonQ has emerged as a favorite in the quantum computing market is the company's impressive partnerships with cloud hyperscalers Microsoft, Amazon, and Alphabet. With the stock sliding as of late, investors may be wondering if the sell-off is an opportunity to buy the dip.

Image source: Getty Images.

... does the valuation actually make sense?

Despite working with major AI developers, IonQ has little to show in terms of tangible growth. Over the last year, the company has only generated $43 million in revenue. Meanwhile, the company's net losses are in the hundreds of millions (and worsening).

IONQ Revenue (TTM) data by YCharts

In a way, this financial profile actually makes some sense. As I alluded to above, quantum computing is not yet commercially used in AI development. Given those dynamics, IonQ's revenue potential is fairly limited for the time being. The unfortunate reality is that the company will likely remain a high-cash-burn operation as it continues building out its platform.

But still, for just $40 could IonQ be worth a look? Well, smart investors understand that the stock price alone does not determine the worth of a business. As of this writing, IonQ boasts a market capitalization of nearly $10 billion. This implies that IonQ is trading for a price-to-sales (P/S) ratio of 195.

Is IonQ stock a buy right now?

IonQ's P/S ratio is not just high; it is multiples above what investors witnessed during the peak euphoria of the dotcom bubble in the late 1990s. I bring this up because the prospects of quantum computing and the appearance of a low share price might tempt investors into chasing momentum -- mistakenly thinking they are buying a stock for a "cheap" price.

The reality is that IonQ stock is anything but cheap. Given the mounting losses pictured above, I suspect that IonQ could have a tough time financing future projects -- further limiting its ability to monetize and grow.

In my eyes, the current sell-off in IonQ stock could lead to further plummeting in the shares. I would not be surprised if IonQ begins to witness a significant valuation correction as more growth investors come to understand that they have been investing in a narrative around the company as opposed to an actual, concrete long-term thesis.

For these reasons, I would stay away from IonQ right now. Even with a 25% drop in share price, the valuation analysis explored above suggests the stock is still overbought and not yet trading for a reasonable price.

Should you invest $1,000 in IonQ right now?

Before you buy stock in IonQ, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The market has been quite unpredictable in 2025. Even if you knew the majority of the news headlines before they occurred, you still may not have been able to guess the market's direction a few weeks or months after they came out. As a result, a dip could happen any moment, and investors need to be ready to pounce (depending on what the dip is caused by).

By doing the work before the dip occurs, investors can remove emotion from investing, as they've already done the legwork to know what stocks to buy and how much they're buying.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

I'll be scooping up two stocks should the market dip: Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN). Both are excellent long-term picks, but they aren't necessarily cheap right now. Should the market sell off, these will be among the first two companies I add to my position in.

Image source: Getty Images.

1. Nvidia

Nvidia makes best-in-class graphics processing units (GPUs). GPUs were originally designed for processing gaming graphics, which were some of the most intense workloads in the late '90s and early 2000s. While they excelled in this area, they eventually displayed uses in other sectors, like engineering simulations, drug discovery, or cryptocurrency mining. Essentially, if there was a workload that required a lot of computing power, GPUs were deployed to process it.

In the past few years, one workload type has become the main source of GPU use: artificial intelligence. AI requires a lot of computing power to train the model and process prompts, and multiple companies built training clusters with 100,000 or more GPUs in them. While there are alternatives to Nvidia's products, it has dominated the data center market, with many estimates pegging Nvidia's market share at 90% or greater.

We're nowhere near the computing capacity necessary to use AI on a large scale, so Nvidia GPUs will continue to be bought in mass quantities, which is a great sign for long-term investors. Even right now, I'd be comfortable buying Nvidia's stock due to its long-term projections and current valuation of 33 times forward earnings.

NVDA PE Ratio (Forward) data by YCharts

Should the market dip even further, Nvidia will be the stock that I load up the most on, barring a headline that directly affects Nvidia. We're still in the early innings of AI deployment, and Nvidia's stock has a long way to go as a result.

2. Amazon

Amazon was directly affected by many tariff headlines this year. A decent amount of Amazon's goods come from China, so the large tariff levies on goods from that country will undoubtedly affect its e-commerce business.

However, Amazon is much more than the commerce business that most consumers are familiar with.

In my eyes, Amazon Web Services (AWS), its cloud computing division, is the most exciting part of Amazon's business. Cloud computing is benefiting from two tailwinds right now: AI workloads and a general shift to the cloud. Most business workloads are still run with on-site hardware, which can be expensive to maintain. However, by shifting these workloads to the cloud, businesses can be more flexible and not worry about maintaining expensive on-site hardware.

On the AI front, cloud computing firms like AWS are getting a huge boost because most companies don't have the in-house computing power to train or run AI models, so they rent that computing power from a provider like AWS.

Both the AI and general computing workloads are a multiyear trend and will likely play out over the next decade. This is such a big deal for Amazon because the majority of its profits come from AWS. In Q1, AWS accounted for 63% of Amazon's total operating profits, despite accounting for just 19% of revenue.

Because of AWS's higher margin than its commerce division counterparts, Amazon's overall profit margin will continue growing as AWS makes up more of Amazon's total revenue. This trend makes Amazon a smart long-term buy, although the stock is a bit expensive at 34 times forward earnings.

Should Amazon dip on more tariff-related headlines, I'll be there to scoop up shares, as AWS is far more important and resilient than its e-commerce business.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.

Stitch Fix (NASDAQ: SFIX) reported some tough results in its latest fiscal quarter. While revenue was positive and losses better than the previous trend, it's still hard to say that Stitch Fix is a good buy.

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Down more than 13% recently, investors seem to be noticing the trend of declines in clients, which will make it harder for the subscription clothing service to grow revenue over the long term.

Image source: Getty Images.

The revenue gains are undermined by the number of declining customers

For Stitch Fix to grow, it has to increase its customer base. The opposite happened in its most recent quarter, with active clients decreasing by 10.6% year over year, and 0.8% quarter to quarter. In all, Stitch Fix's fiscal third-quarter revenue increased 0.7% year over year to $325 million.

The problem is that revenue was gained by increasing net revenue per active client by 3.2% to $542 per person. Short term, this certainly works. Long term, it's not a promising proposition. You can only derive so much revenue from a declining client base over time.

Total revenue increased slightly for the quarter, but if you look at the first nine months of the fiscal year, revenue was down from roughly $1.06 billion, to $956 million year over year.

Looking ahead

For fiscal year 2025, of which there is only one quarter left, guidance is calling for net revenue of $1.245 billion to $1.26 billion, which would be a 6.2% to 5.9% decline from the year before. It follows a troubling trend for Stitch Fix. The subscription clothing service has seen its top line deteriorate annually for three years in a row, and fiscal 2025 doesn't look like it's going to be any different.

If the client base keeps shrinking, it's very hard to be bullish on this stock. The annual losses are also a headache for the company as it tries to grow.

To be fair, things were much better through the first nine months of fiscal 2025. Total net losses were $20.16 million through the first three fiscal quarters, whereas things were much higher at $92.34 million the year before. This was encouraging news, and definitely something to make shareholders happy. But I still don't see how a trend toward profitability can carry over the long term if the number of customers remains in decline.

I will extend an olive branch where it's due: Under CEO Matt Baer, the company finally reported revenue growth in the most recent quarter. The game plan seems to be to focus on increasing personalization, but to this point, that hasn't brought in new customers.

This is not an easy concept

This seems like a wait-and-see stock. Until it rights the ship in terms of clients, there's danger here. The stock is down 82% over the last five years for a reason, and compared to a gain of nearly 98% for the S&P 500 (SNPINDEX: ^GSPC), it doesn't seem like a great buy.

A contraction in clients cannot be ignored, and there's some logic behind it. The concept of having clothes chosen for you might not appeal to a broad audience. People like to pick their own things.

This is a tricky concept to execute. Not only do you have to pick things that people will actually like, you have to get the sizing right as well, lest you end up with tons of returns. That, to me, might be one of the reasons that the number of clients is in decline.

The one thing that might counter the negative sentiment, given the weakening client base, would be a shift to profitability. But estimates aren't calling for that in the near future.

Analyst estimates are predicting that earnings will remain negative all the way into fiscal 2027, with a loss of $0.10 per share that year. To me, it's difficult to remain overly motivated to buy Stitch Fix stock when you're looking at that long a time frame without profitability, combined with the fact that there's weakening customer interest.

I reiterate that it's going to be difficult to drive top-line growth over the long term if the total number of customers declines. For now, I think this is definitely a wait-and-see stock.

Should you invest $1,000 in Stitch Fix right now?

Before you buy stock in Stitch Fix, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stitch Fix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

David Butler has no position in any of the stocks mentioned. The Motley Fool recommends Stitch Fix. The Motley Fool has a disclosure policy.

Artificial intelligence (AI) stocks might be the big thing on Wall Street, with rising valuations and trending tickers. But that doesn't mean there aren't good values to be found. While there are some fears that a bubble will form in AI, many of the big tech stocks leading the charge look downright undervalued. In fact, some of them even fall into the classic Warren Buffett model of value investing.

Buffett is known for avoiding tech stocks for most of his career, but there are some AI-related tech stocks that even a value investor like him could get behind. Keep reading for details about two of them.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

1. Alphabet

OpenAI may be the most buzzworthy AI company, but there's no question that Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a leader in AI. The company has been at the forefront of artificial intelligence for at least a decade, acquiring the AI research lab DeepMind in 2014, and launching Google Brain, which merged with DeepMind in 2023, before that.

The company has made AI a stated priority for at least eight years, and it's kept pace with advances in generative AI with Google Gemini, its AI model, and its AI assistant that is readily available on Google Search.

In addition to the company's prowess in AI technology, the stock's valuation is also attractive at a price-to-earnings ratio of just 20, meaning it trades at more than a 20% discount to the S&P 500.

Investors seem to be wary of the stock because of pressure on the regulatory front and concerns that generative AI chatbots pose a threat to the dominance of Google Search.

The regulatory concerns might seem valid after the company was found in court to have a monopoly in both search and ad tech, and the company is now awaiting a decision on "remedies" for the search business, while its remedies trial for ad tech is set for September. Alphabet could receive a fine or be forced to divest part of its business, but at the current valuation, any risk looks sufficiently priced in.

It's true that AI chatbots like ChatGPT and Perplexity pose a threat to Google Search, but thus far, Google has held its own, continuing to grow.

In fact, growth in the business has been steady, and Google Cloud has also turned profitable. Overall, its competitive advantages remain intact, and its valuation is attractive. It looks like a classic Buffett stock set to deliver growth over the long term.

2. TSMC

Another wide-moat AI stock worth taking a look at is Taiwan Semiconductor Manufacturing (NYSE: TSM), or TSMC for short.

TSMC is the world's largest manufacturer of semiconductors. It's a contract chip maker and handles production for companies including Apple, Nvidia, AMD, and Broadcom. It handles more than half of the third-party chip production in the world and roughly 90% of advanced chip production, making it a key player in AI, as cutting-edge chip designers like Nvidia rely on TSMC's infrastructure and expertise to make its chips. Given the company's market share, there's no close second in third-party chip manufacturing, and leading integrated device manufacturers such as Samsung and Intel have struggled of late.

TSMC has also been a major beneficiary of the AI boom, as both revenue and profit have soared lately. In the first quarter, TSMC's revenue jumped 35.3% year over year to $25.5 billion, and net income rose 60% to $10.9 billion. TSMC's operating margin was 48.5% in the quarter, a clear sign of its pricing power and competitive advantage.

Even with that growth rate, its profitability, and its competitive advantages, TSMC stock trades at a price-to-earnings ratio of just 25.6, in line with the S&P 500.

Some consider TSMC risky because it's headquartered in Taiwan, a disputed territory, and some investors are wary of a Chinese invasion. While anything is possible in geopolitics, there are no imminent signs of an invasion, and TSMC has diversified away from Taiwan, opening plants in the U.S., Europe, and Japan, meaning those fears may be overblown.

Based on its technological strength, growth rate, attractive valuation, and the tailwinds from AI, TSMC looks well-positioned for long-term growth.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Advanced Micro Devices, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

• Israeli Air Force planes struck Iranian military targets and nuclear facilities on Thursday.
• Israel's F-35I stealth fighter jets participated in the strikes targeting Iran's nuclear program.
• The planes also aided defenses against Iranian missiles in 2023 and 2024.

Israel launched a preemptive strike against Iran's nuclear program on Thursday with its fleet of F-35I stealth fighter jets on the front lines.

The Israeli variant of the US-made Lockheed Martin Lightning II Joint Strike Fighter plane is known as "Adir," meaning "Mighty One" in Hebrew. With advanced stealth capabilities and a customized electronic warfare system, the F-35I is one of the most powerful tools in Israel's air defense arsenal.

In addition to Israel's assault on Iran, the Israeli planes also took down a missile fired by an Iran-backed group in Yemen in 2023 and intercepted hundreds of drones, missiles, and rockets fired by Iran in a retaliatory attack in 2024, according to the Israel Defense Forces.

Here's a closer look at the "Mighty One" military aircraft.

F-35 Lightning II stealth fighter jets, produced by Lockheed Martin, are some of the most advanced military aircraft in the world.

The F-35 stores its weapons and fuel internally, and its aligned edges and radar-absorbent coating also help the aircraft evade detection. The planes cost $44,000 per hour to fly, The National Interest reported in January.

They feature advanced stealth and information-processing capabilities and can reach supersonic speeds of Mach 1.6, or 548.8 meters per second.

Lockheed Martin CEO Marillyn A. Hewson said in 2018 that the planes "can fly in what we call 'beast mode,' carrying up to 18,000 pounds of internal and external ordnance, in a mix that can include 5,000-pound-class weapons."

In 2016, Israel became the first country other than the US to acquire F-35 fighter jets.

Israel was the first country to select the model through the US Foreign Military Sales process and bought 50 planes, according to Lockheed Martin.

Israel has made significant modifications to the jets.

Israel manufactures its own wings and electronic warfare system for the F-35I. It also developed its own version of the high-tech helmet that displays the plane's airspeed, altitude, targeting information, and other crucial stats directly on the pilot's visor.

The Israeli Air Force named its F-35I variant "Adir," meaning "Mighty One" in Hebrew.

The Israeli Air Force also added a six-pointed Star of David to the design, a Jewish symbol that also appears on the Israeli flag.

In 2018, Israel became the first country to use the F-35I in combat, its air force chief said.

"We are flying the F-35 all over the Middle East and have already attacked twice on two different fronts," then-Israeli Air Force chief Major-General Amikam Norkin said in a speech at a gathering of foreign air force leaders, Reuters reported.

In July 2023, Israel acquired an additional 25 Adir planes in a $3 billion deal.

The deal was financed through the military aid Israel receives from the US, Reuters reported.

In November 2023, Israel's F-35I Adir fighter jets took down a missile fired by an Iran-backed group in Yemen, according to the IDF.

It was the first known intercept of a cruise missile by an F-35 plane.

The Israeli Air Force released footage of the encounter on X, writing in Hebrew that its personnel are "preoccupied at every moment with planning and managing the defense response and are prepared for any threat in any area."

Iran appeared to target the Nevatim air base, which houses Israel's fleet of F-35I jets, during an attack in April 2024.

Out of the over 350 ballistic missiles, cruise missiles, and UAVs, or unmanned aerial vehicles, launched at Israel by Iran and its proxies in Iraq, Yemen, and Lebanon, around 99% were intercepted by Israel and its allies. The IDF released photos showing minor damage near a runway at the Nevatim Airbase and to a road in Hermon caused by the few projectiles that landed.

The missiles appeared to target Israel's Nevatim Airbase in the Negev desert, which houses its fleet of F-35I stealth fighter jets. The base remained operational throughout the attack, according to the IDF, with the Adir fighter jets aiding the defensive mission.

"Iran thought it would be able to paralyze the base and thus damage our air capabilities, but it failed," IDF spokesperson Rear Adm. Daniel Hagari said in a statement.

On Thursday, the Israeli Air Force launched over 200 fighter jets, including F-35I planes, in a preemptive strike targeting Iran's nuclear program.

An IDF spokesperson said that Israeli fighter jets struck over 100 sites across Iran on Thursday to prevent it from developing a nuclear weapon, including military targets and its largest uranium enrichment site in Natanz.

The IDF said that Iran's nuclear program has "accelerated significantly" in recent months and called it "clear evidence that the Iranian regime is operating to obtain a nuclear weapon." Iran maintains that its nuclear program is solely for civilian purposes.

"This is a critical operation to prevent an existential threat by an enemy who is intent on destroying us," Lt. Gen. Eyal Zamir, the IDF's Chief of the General Staff, said in a statement.

The IDF released photos showing planes used in the large-scale operation, including F-35I jets.

Iran launched a retaliatory attack with over 100 drones on Friday morning, which were mostly intercepted by Israeli forces, the IDF said.

The ongoing war in Gaza has prompted new scrutiny of US military aid to Israel.

The October 7 terrorist attacks carried out by Hamas killed around 1,200 Israelis and captured over 240. Around 53 hostages remain in Gaza, though it is unknown how many are still alive.

Israel's counteroffensive airstrikes and military actions in Gaza have resulted in over 55,000 Palestinian fatalities, according to figures provided to the United Nations Office for the Coordination of Humanitarian Affairs by the Hamas-run Ministry of Health in Gaza. The IDF reports that 17,000 of these fatalities were Hamas militants.

According to the United Nationals Relief and Works Agency, over 1.9 million Gazans, around 90% of the population, have been displaced by the war.

The devastating human toll of the war in Gaza with US-funded planes like the F-35I has prompted new scrutiny of US aid to Israel, with some lawmakers in Congress raising the possibility of conditioning military and economic aid.

Like a well-hit golf ball sailing through the air toward its destination, Topgolf Callaway Brands (NYSE: MODG) stock was vaulting higher in price this week.

According to data compiled by S&P Global Market Intelligence the sporting goods company's shares were up by nearly 23% in price week to date as of early Friday morning, thanks in no small part to a series of insider stock buys. The announcement of a new Topgolf facility also helped lift investor sentiment.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Big insider buys

While no investor should ever buy or sell a company's shares purely on the basis of insider transactions, often they signal confidence by a person familiar with the business.

Image source: Getty Images.

This was the dynamic with Adebayo Ogunlesi, a member of Topgolf Callaway's board of directors. After divulging last Friday in a regulatory filing that he had bought 383,701 shares of the company via open-market purchases last week, he made a subsequent disclosure detailing more buys. A filing submitted this past Tuesday itemized three additional purchases totaling 461,583 shares.

Such filings detail only the facts and figures of insider transactions, but do not provide any reasons for such moves -- and Ogunlesi has not publicly commented on his purchases. A veteran of the financial services industry, he might consider the stock a fine play in advance of the company's upcoming spinoff of more than 80% of the Topgolf business.

New Florida facility

Ogunlesi might also be simply buying into Topgolf Callaway's expansion. On Thursday it announced that it will open its newest Topgolf facility in Florida -- marking the 10th one in the state. However this will be the first Topgolf to be located on the Emerald Coast, a stretch of land in the state's panhandle fronting the Gulf. It's slated to open on Friday, June 27.

While the director's moves are certainly bringing attention to the stock, they shouldn't distract from the always-important fundamentals of the company. Personally I don't feel golf offers much of a growth opportunity, no matter how well conceived and appealing those Topgolf outlets may be.

Should you invest $1,000 in Topgolf Callaway Brands right now?

Before you buy stock in Topgolf Callaway Brands, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

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*Stock Advisor returns as of June 9, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Topgolf Callaway Brands. The Motley Fool has a disclosure policy.

The Polkadot (CRYPTO: DOT) cryptocurrency is going through some pretty exciting changes these days. The Web3 Foundation's official crypto coin is becoming a distributed supercomputer, ready to provide a wide variety of apps and services. Yet, the coin price keeps falling.

Should you pick up a few Polkadot coins while they're available for less than $5 apiece? I think that's a good idea, and here's why.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Polkadot's big internet ambitions

First things first. Polkadot was designed to support a Web3 future. The social networks and paywalls of the Web2 world were unstoppable over the last 20 years. These days, a lot of web users are getting tired of this aging structure, looking around for new ideas. The Web3 idea is one alternative, bringing more personal freedom and giving content creators more control over their creations. In this system, gigantic hubs of advertising and social media connections are replaced by decentralized services. And Polkadot's app-building ecosystem provides a handy platform to get all the Web3 ideas done in the real world.

It's still a futuristic ideology with just a handful of early success stories. But in the long run, Web3 apps could take over your online community connections, your day-to-day financial management processes, and your favorite channels for text, video, and audio infotainment. The tools won't even run in the centrally managed cloud you know and love today, but in a new global network of blockchain-based systems. When tweaked just right, the crypto world's smart contracts can run any kind of program and perform all sorts of services. And that's what Polkadot is doing, with the help of many other cryptocurrency systems.

Image source: Getty Images.

Meet JAM: The next big step in Polkadot's evolution

So far, Polkadot is mostly known for its ability to interact with other blockchain networks. This coin's smart contracts can tap into Bitcoin's (CRYPTO: BTC) monetary value storage, Ethereum's (CRYPTO: ETH) sophisticated contracts, and Chainlink's (CRYPTO: LINK) real-world data reports, just to name a few.

It's also known as a complicated and cumbersome system, but that's changing in 2025. Polkadot's central blockchain will soon be replaced by a more flexible and standards-based system known as JAM (the Joint-Accumulate Machine, if you're curious). This is actually a virtual machine in the blockchain universe. It can compile and run any code for bog-standard central processors, because it's a software-driven and full-featured RISC-V processor.

For example, Polkadot co-founder Gavin Wood has made it a habit to show off old-school computer games running on a test version of JAM. His personal laptop is good enough to make that work, but the full JAM upgrade will run on hundreds of server-class computers around the world. Imagine what this on-demand supercomputer can do for the Web3 vision.

Don't expect instant fireworks

JAM is coming up, probably in the second half of 2025. It won't cause an immediate frenzy in the Polkadot community, because it takes time for people to use new tools. Then the tools must create useful apps, which in turn need to find a target audience of actual users. So it's not a magic wand that will make Polkadot's developer community's dreams come true in a heartbeat, and it won't lift Polkadot's usage-based coin price right away.

But this is a much-needed step toward a true Web3 version of the online world. In the long run, I expect Web3 alternatives to disrupt the online experience as you know it today. Web2 leaders such as Meta Platforms (NASDAQ: META), Spotify (NYSE: SPOT), and TikTok will either join the Web3 revolution or put up roadblocks instead. I can't wait to see how true innovators like Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) will find their place in the Web3 era.

Take it easy out there, Polkadot investors

I could be wrong, of course. Web2 may stick around for another decade or two, as the current leaders focus on protecting the old social media world. Other cryptocurrencies can also support Web3-worthy apps, though they'll need to overcome Polkadot's built-in advantages first.

So I'm not betting the proverbial farm on Polkadot coins. I simply recommend any investor who agrees with the Web3 project's ideas to pick up a few Polkadot coins while they're cheap.

This cryptocurrency is only worth $6.6 billion today, which is a far cry from the trillion-dollar titans you see ruling today's Web2 structure. The coin price could multiply by 10 or 100 and still look small next to Meta and Alphabet. In short, Polkadot can be a big long-term winner even if it never matches the Magnificent 7 group's trillion-dollar market caps. I think that's worth a modest position in your long-term crypto portfolio.

Should you invest $1,000 in Polkadot right now?

Before you buy stock in Polkadot, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Polkadot wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Bitcoin, Chainlink, Ethereum, Netflix, and Polkadot. The Motley Fool has positions in and recommends Alphabet, Bitcoin, Chainlink, Ethereum, Meta Platforms, Netflix, and Spotify Technology. The Motley Fool has a disclosure policy.

We aren't even halfway through 2025, and already, it has been a roller-coaster year in the stock market. The major indexes incurred steep sell-offs, only to snap back like nothing happened.

Some investors may be looking for ways to take their feet off the gas by investing in stocks that distribute a portion of their profits to shareholders through dividends. Dividends are a great way to generate passive income, no matter what the stock market is doing. This can be a good approach for risk-averse investors, folks looking to preserve capital, or even investors who feel they have plenty of exposure to growth stocks and are looking to balance their portfolios.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here's why Devon Energy (NYSE: DVN), Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC), and Clorox (NYSE: CLX) stand out as three dividend stocks to buy in June.

Image source: Getty Images.

Devon Energy offers a sustainable dividend to energy investors

Lee Samaha (Devon Energy): Now, I know what you are thinking, and you have a point. How can an oil and gas exploration and production company be an ultra-reliable dividend stock? The answer lies in your degree of comfort with the price of oil.

To put matters into context, Devon Energy's management calculates that its "breakeven funding level" is $45 per barrel. In other words, that's the minimum price of oil the company needs to fund all its costs, operations, debt, and its fixed dividend.

Suppose you are comfortable with the implied assumption regarding the price of oil. In that case, you will be comfortable with the notion that Devon can sustain its current $0.96-per-share dividend, which translates to a dividend yield of more than 3%.

Moreover, based on the current price of oil of $63 per barrel, Devon could pay even more in dividends and/or continue buying back shares. Assuming a price of oil of $60 per barrel, management believes it will generate $2.6 billion in free cash flow (FCF) in 2025, a figure equivalent to 12.9% of its current market capitalization. In theory, that's what Devon's dividend yield could be if it used all its FCF to pay the dividend. All in all, Devon's dividend appears sustainable, barring a significant decline in oil prices.

Brookfield Infrastructure is a high-yield dividend stock that's on sale to start summer

Scott Levine (Brookfield Infrastructure): Building positions in trustworthy dividend stocks is a tried-and-true way for investors to fortify their portfolios. When reliable stocks like Brookfield Infrastructure -- along with its 5.2% forward-yielding dividend -- are available at a discount, therefore, investors would be wise to sit up and take notice. And that's exactly the opportunity that's now presented with shares of Brookfield Infrastructure trading at a discount to their historical valuation.

While investing in Brookfield Infrastructure doesn't offer a sizable growth opportunity like those artificial intelligence stocks or space stocks may offer, it does provide a conservative approach to procuring plentiful passive income. The company operates a massive portfolio of global infrastructure assets including (but not limited to) rail, data centers, and oil pipelines.

The allure of Brookfield Infrastructure for income investors is that the company generates ample funds from operations to cover its dividend payments.

BIP FFO Per Share (Annual) data by YCharts.

Over the past 15 years, the company has excelled at growing its funds from operations. From 2009 to 2024, Brookfield Infrastructure has increased its funds from operations at a 14% compound annual growth rate. While this doesn't guarantee the same results for the next 15 years, it's certainly an auspicious sign that should inspire confidence in management's ability to grow the business -- which is encouraging for those looking for passive income.

Currently, Brookfield Infrastructure stock is changing hands at 3.1 times operating cash flow, a discount to its five-year average cash-flow multiple of 4. Today's clearly a great time to load up on the stock while it's sitting in the bargain bin.

A safe dividend stock for passive-income investors

Daniel Foelber (Clorox): Clorox stock has been hit hard by a slower-than-expected turnaround, tariff risks, and cost pressures. But the maker of Clorox cleaning products, Kingsford charcoal, Burt's Bees, Hidden Valley Ranch dressing, Glad trash bags, and more could be a great high-yield dividend stock to buy for patient investors.

The great news for investors considering Clorox now is that the bulk of challenges related to its turnaround are likely over. The company's multiyear efforts to improve its internal operations -- known as its enterprise resource planning (ERP) system -- is set to begin adding cost benefits to Clorox in calendar year 2026.

Clorox's results have been improving. The company has achieved 10 consecutive quarters of gross margin expansion, showcasing better cost management even amid slower sales. Clorox expects to finish the fiscal year (ending June 30) with a 150-basis-point improvement in gross margin compared to fiscal 2024 -- even when factoring in tariff and cost pressures.

Clorox is heading in the right direction, but the stock may be selling off simply because investors have grown impatient with the company's multiyear turnaround. Another factor could be opportunity cost.

Clorox yields a hefty 3.8% and has 48 consecutive years of dividend increases -- but with three-month Treasury bills at 4.4%, some investors may prefer to go with the risk-free option.

Clorox is far from the only struggling high-yield consumer-focused brand to see its stock price around multiyear lows. Another example is Target, which has an even higher dividend yield than Clorox and has over 50 consecutive years of increasing its payout. Yet investors have grown impatient due to sluggish sales growth and weakening margins.

All told, Clorox is an excellent high-yield dividend stock for folks who want to participate in the stock market to collect passive income rather than go with non-equity products like T-bills.

Should you invest $1,000 in Devon Energy right now?

Before you buy stock in Devon Energy, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Devon Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

You'll often hear that it's best not to retire on Social Security alone, but rather, to have additional income streams at your disposal. And you have several options in that regard.

If you manage to save well for retirement, you can tap your nest egg for money as needed. You might also own stocks, bonds, and other assets that pay you on a regular basis.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Plus, you might choose to hold down a job for extra cash. On top of the added money, a job might be a great way to anchor your days.

Another option for generating retirement income is to purchase a rental property. And you may like the idea of getting to collect a check from a tenant every month. But before you decide that owning a rental property in retirement is the right move, consider the drawbacks.

The upside of owning a rental property

A rental property could be a great way to diversify your income streams later in life. We don't know if Social Security will end up cutting benefits. If it does, those monthly checks of yours could be whittled down.

It's also a pretty common thing for the stock market to experience bouts of volatility. That could affect your retirement income, depending on how much money you keep in the market.

The nice thing about owning a rental property is that you'll have an income stream to fall back on that may not be impacted by stock market movement. And remember, even in the worst of economic times, people still need housing. So while you're not guaranteed to have your rental occupied each month, if you buy in the right location, you may find that the income is steady.

Plus, if you get tired of being a landlord, you could always look at selling your rental. Under the right circumstances, you could walk away with a nice profit.

The downside of owning a rental property

Before you get your mind set on owning a rental property in retirement, understand the risks involved. It's true that your rental might provide steady income. But if you struggle to get a tenant, it could end up being an expense rather than an income source.

Also, when you own physical real estate, you take on all of the risks that come with it, from insurance premium hikes to property tax increases to repairs. You may not want to take on that risk at a time when you're no longer bringing home a paycheck from a job.

Furthermore, you might think retirement is a great time to own a rental property because you'll have time to manage it. But some of the work may be more than you've bargained for, especially if you have needy tenants or tricky maintenance. And if you can't maintain your rental on your own, you'll incur expenses to have someone else do it.

Should you buy a rental property for retirement income?

It's certainly not a bad idea to include a rental property in your retirement income plans -- as long as you understand the risks you're taking on. If you're having second thoughts but like the idea of investing in real estate for retirement income, you could consider REITs, or real estate investment trusts, instead.

REITs are similar to stocks in that you buy shares you house in your portfolio. The value of those shares can rise and fall, but a big benefit of REITs is that they're required to pay out at least 90% of their taxable income as dividends. So if a goal of yours is to secure steady retirement income, you may find that REITs are able to do the trick just like a rental property would -- only without all of the extra work and hassle.

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