paintbrush with green paint

The True Cost of Buying a Fixer-Upper: Essential Insights and Tips

If you’re considering buying a fixer-upper, you’re likely doing so, at least in part, because purchasing a home continues to be expensive. Post-pandemic, prices are still climbing, with a 4.7% uptick in November 2024 versus a year earlier. Adding to the high cost of homeownership is the fact that mortgage rates went from historic lows a few years ago to an average of 7.08% for a 30-year loan as of January 2025.

These economic factors are among the reasons why many people are drawn to fixer-uppers. They hope to find a lower-priced house that can be rehabbed, giving them a piece of the American Dream for less. Are you among their ranks? Here, learn more so you can make an informed buying decision.

Key Points

•   Renovating a fixer-upper isn’t necessarily a bargain. A thorough home inspection is crucial to identify what issues are present and budget for them.

•   The initial purchase price of the home is typically lower, but renovation costs can be unpredictable and vary by location.

•   It’s wise to budget for overages, typically 10% to 25%, to cover unexpected expenses and delays.

•   Common renovation projects include kitchen and bathroom remodels, and roof replacements, with costs varying widely but extending into the five-figure range.

•   Financing options include larger mortgages to reserve cash, home improvement loans, and HELOCs, depending on your financial situation.

Defining a Fixer-Upper

What exactly is a fixer-upper? It’s a home that’s in need of significant work. In many cases, these are older houses with much deferred maintenance or simply a lot of dated, well-worn features.

A fixer-upper might be a home from 100 years ago with an insufficient electrical and heating system, as well as a roof in need of replacement. Or it could be an apartment with a very old kitchen and bathrooms needing an overhaul. These residences might be livable, but they require an infusion of cash and work to make them comfortable by today’s standards.

Initial Purchase Price vs. Renovation Costs

If you’re thinking about buying a fixer-upper, it’s important to look carefully at the initial purchase price versus renovation costs. Granted, the price of the home is likely to be cheaper than that of a brand new home. The Federal Reserve Bank of St. Louis, for instance, found that the median price for an existing home was $388,000 vs. $420,800 for a new home in the most recent year reviewed, so buying an older home can already save you cash.

However, pricing renovation costs can be tricky. Among your considerations:

•  You will have to finance both the purchase of the property and the renovations. You may need to get a home loan and then access additional funds for the renovation.

•  Whether you are planning on doing the work yourself or hiring professionals, issues can often be uncovered as you go. Perhaps a bathroom you thought was fine as-is actually has deteriorating plumbing. Or maybe in the kitchen, the parts you need to repair the aging refrigerator are no longer available. These kinds of discoveries can blow your budget.

•  The location of your home will likely impact prices. Those in a small town, for instance, will probably pay less to get the work done than someone who lives in a pricey suburb of, say, San Francisco or New York.

•  You are likely aware that supply-chain issues can impact your renovation. As the saying goes, time is money. These kinds of delays can throw a wrench in your plans and lead you to spend more as you find ways to finish the job.

•  Don’t forget to think about whether you can stay on-premises during the remodeling process or if you will need to find temporary housing as your property is renovated.

As you contemplate these factors, it’s wise to do a full home inspection of a fixer-upper property, walk through with a contractor or two if you are planning on delegating the work, and draw up a budget to see how renovation costs will add to the initial purchase price.

Evaluating Renovation Expenses

Here’s a closer look at three common fixer-upper remodeling projects, with current costs.

Kitchen Remodel Costs

According to Angi, the home improvement site, the average cost of a kitchen remodel in 2025 is almost $27,000, but there’s a huge range of prices possible, including up to twice that amount or more.

The three elements that contribute most to the cost are the countertops, cabinets, and flooring. The more you lean into custom and luxury options, the higher the price will go. Also, the size of the kitchen will count as well, with bigger being more expensive, and the degree of dilapidation can matter, too.

Bathroom Renovation Costs

The average bathroom renovation ranges from $6,000 for smaller-scale fixes, such as primarily cosmetic updates, to $30,000 for a complete gut do-over, with the average price tag coming in at $12,115 in 2025, according to Angi. A big expense can be moving the plumbing lines. If you can keep the layout as-is, you could save up to 50%.

Roof Replacement Costs

A roof should typically last two to three decades on a home — or longer, if you choose the right material. The average cost for replacing a roof is about $9,511, but that will vary with the size of the home and the material you choose.

For instance, if you opt for a premium product, like natural slate, you’ll find that the average costs for a 1,500-square-foot roof can be $45,000 in 2025.

Recommended: How to Buy Homeowners Insurance

Hidden Costs in Fixer Uppers

It’s crucial to add up all the costs of potential renovations before you buy a fixer-upper house. You don’t want the dream of owning your own home to cloud your judgment about the work that’s needed. If you don’t do a deep dive on pricing before you buy, you may end up in your own version of The Money Pit movie.

Consider the following:

•  Assess the upfront cost of the home, and add up all potential material and labor needs — think both big and small, like plumbers, electricians, carpenters, all the way down to any new doorknobs you’ll buy along the way. Then, subtract that from the home’s renovated market value. Would this still be a profitable venture and a wise investment?

•  Keep in mind that the impact of inflation can push prices higher than what you believe they will cost during the time you are renovating.

•  It’s important to allow room in your budget and your timeline for overages. It’s not uncommon for home renovations to cost more and take longer than anticipated. It’s wise to have a cushion in your budget, at least 10% but preferably 20% to 25% to cover additional costs. Add wiggle room in your timing, too.

•  Lastly, as noted above, think about whether you will be able to occupy the home as it’s renovated. If you’ll be without heat or air conditioning, bathrooms, and/or a functional kitchen, you may have to pay to live elsewhere for a period of time.

Recommended: How Do Home Improvement Loans Work?

Financing Your Fixer Upper

These considerations can seem overwhelming, but remember, your goal is to bring out your home’s maximum potential, whether for you to enjoy or to capitalize on via a future sale.

You have a few options for how to finance the renovation of a fixer-upper:

•  You could put less money down and take out a larger mortgage. This would allow you to have some cash on hand to pay for the remodeling.

•  You can buy the house and then take out a home improvement loan, which is a kind of personal loan used to finance your home projects. You get a lump sum and pay it back over time with interest,

•  An alternative to a personal loan would be to purchase the fixer-upper and then apply for a home equity line of credit, or HELOC. These are revolving lines of credit that may offer attractive terms (low interest, long repayment). However, keep in mind you are using your home’s equity as collateral. You typically need 15% to 20% equity in your home to qualify.

•  Another option is a home equity loan vs. a HELOC. The difference is that a home equity loan typically distributes a lump sum of money, which is repaid in installments over a period of time.

Recommended: Home Equity Loan or Personal Loan: Knowing Your Options

DIY vs Professional Renovations

If you are considering buying a fixer-upper, a key decision is whether to do the work yourself or hire professionals to complete the job. Making that decision involves keeping the following in mind:

•  Timing: It’s important to look at the timeline of your project. Would you have the bandwidth to get the work done yourself? Or, thinking about the other option, can you find a qualified professional who is available to start when needed?

•  Skill level: Be honest. Are you confident that you have the skills needed to get the job completed and in a way that you’ll be happy with? Can you tackle retiling a bathroom or adding a home addition? Renovations aren’t for novices, and errors can be costly and possibly dangerous.

•  Budget: As you budget after buying a house, do you have money to hire professionals? If you don’t have deep pockets, you may feel your only option is to DIY the project. But, as noted above, there are ways to access funding to get the job done right, such as different types of home improvement loans, if hiring out winds up being the best decision.

Recommended: How to Apply for a Personal Loan

The Takeaway

As home prices continue to rise, a fixer-upper can offer good value for some home shoppers, whether they want to renovate the home themselves or hire professionals to complete the work. However, it’s important to evaluate your costs upfront to make sure you can handle both the purchase of the property and then financing the updates to make your renovation dreams come true.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.


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FAQ

What should I avoid when buying a fixer-upper?

When buying a fixer-upper, don’t be blinded by the property’s potential or guesstimate costs. It’s important to have a full inspection and be aware of such big-ticket expenses as structural damage, outdated plumbing and electrical systems, and any environmental issues (such as mold).

Is it cheaper to build or to buy a fixer-upper?

While a fixer-upper is typically cheaper than a home that’s ready for move-in, it’s hard to generalize whether it’s cheaper to build or buy a fixer-upper. Constructing a simple house in an area where land and labor are affordable could be a wise move, while building in a pricier area on, say, a challenging sloped lot could ratchet up expenses. Similarly, some fixer-uppers require little investment to make them livable, while others require a long and in-depth overhaul. Doing your research and running the numbers can usually provide guidance.

What is the most expensive part of remodeling a house?

Typically, the most expensive part of remodeling a house is renovating the kitchen and bathrooms. These rooms often require pricey appliances and fixtures, custom cabinetry, and the work of plumbers and electricians.


Photo credit: Stocksy/Karina Sharpe

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What Is Greenwashing?

What is Greenwashing? Definition, Types & Examples

With the rise of environmental and climate-related concerns, more people are becoming familiar with the term greenwashing — which is when a company markets itself as more sustainable or environmentally friendly than it actually is.

Greenwashing impacts investors and consumers alike because it’s designed to mislead people through a variety of means, including: the use of vague terminology or false labels; making claims about green actions or outcomes that can’t be verified (or are found to be deceptive); using false or misleading research and data.

The term greenwashing is derived from the notion of whitewashing, which is when a company or individual conceals wrongdoings by presenting a cleaned-up, but deceptive version of their actions.

Key Points

•   Greenwashing is when a company markets itself as more sustainable or eco-friendly than it is.

•   Companies may engage in greenwashing to attract consumers, employees, or investors.

•   Greenwashing can also be an attempt to avoid stringent or costly regulations.

•   Common greenwashing techniques include misleading labels, vague or meaningless terminology, a deceptive use of data, and more.

•   It’s vital for investors, as well as consumers, to look beyond an organization’s eco-friendly claims to verify whether they are adhering to ESG standards.

Types of Greenwashing

For some companies, greenwashing is a means to attract consumer and investor dollars. According to the 2023 Business of Sustainability Index, 68% of consumers said they’re willing to spend more money for environmentally friendly products.

But some companies engage in greenwashing to appear compliant with environmental regulations, which can be stringent and come with hefty penalties — especially now that some countries, like the EU. and U.K., are adopting anti-greenwashing laws.

Before you buy products marketed as sustainable or eco-friendly, or invest in a green company that makes similar claims, it may help to know the different types of greenwashing.

•   Greenwashing a polluting product: Companies may attempt to improve the branding of a product by making it seem more environmentally friendly without actually changing much or anything about it.

•   False associations: Brands can make it seem like they are endorsed by a third party when they really aren’t, or the third party is simply their own subsidiary.

•   Green products from a polluting company: A company might make a product that has a lower environmental impact, such as an electric vehicle, but manufacture it in a way that creates significant waste and greenhouse gas emissions nonetheless.

Again, because socially responsible investing has grown so rapidly, and many companies want to attract the attention of investors and consumers with a green sensibility, there is commensurate growth on the greenwashing side, so it pays to be cautious when making choices.

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Example of Greenwashing

Greenwashing is increasingly on the radar of regulatory bodies that protect consumers and investors. But some watchdog organizations lack the resources to hold companies to account. A few examples of what would be considered greenwashing are described on the U.S. Federal Trade Commission (FTC) website:

•   A company labels a trash bag they are selling as “recyclable.” Although this may be true, it’s unlikely that a bag full of trash will be emptied and then recycled on its own. This label makes the product appear to have an environmental benefit, but in reality it doesn’t.

•   In another example, a company labels a product as having 50% more recycled content than a previous product did. This makes it sound like a significant amount, but in fact the company may have increased the recycled content from 2% to only 3%, so in reality there has been hardly any change.

•   A company labels a product as “recyclable” but they don’t say specifically whether all parts of it are recyclable, just some parts, or just the packaging.

Other real-world examples include: An oil company that’s known for environmental negligence releases advertisements that state their dedication to a carbon-free future — or companies promising to do environmental cleanups, but failing to actually follow through on those promises.

Recommended: A Beginner’s Guide to Invest in Solar Energy

The Negative Impacts of Greenwashing

Although in the short term greenwashing might benefit a company if it leads to more people buying their products, the risk is that a revelation of greenwashing practices could quickly and negatively outweigh those gains.

The Impact on Consumers

If consumers catch on that a company is engaging in greenwashing, rather than adhering to ESG standards, there could be a public relations backlash. Consumers may feel duped, and may express their discovery of a company’s contrary claims in various ways: with other consumers, on social media, writing to elected officials, contacting the Better Business Bureau.

Depending on the scale, and the level of consumer awareness, this has the potential to damage a company’s reputation and trustworthiness, and cause consumers to turn to other brands.

In addition, companies that get caught greenwashing can also face legal ramifications for their misleading claims. And investors interested in true impact investing may take their business elsewhere.

The Impact on the Environment

In the long term, the biggest negative consequence is the actual environmental impact of manufacturing and other business practices that are not, in fact, green or sustainable. By using green claims to bolster their business goals, yet not living up to actual sustainability standards, companies not only add to environmental damage, they hinder efforts to create sustainable products and reach other socially responsible goals.

Companies rely on clean water and air, quality soil, viable supply chains, and a stable climate to operate. A thriving economy requires a healthy planet, and greenwashing ultimately doesn’t support either.

The Impact on Investors

Just as many consumers are seeking a clearer understanding of the environmental claims of various products and consumer goods, investors are looking for ways to vet the claims of financial companies that offer ESG-focused securities, like exchange-traded funds (ETFs) and mutual funds.

This has led some organizations to develop ESG frameworks, in order to provide investors with a way to assess companies’ ESG progress, and use accepted standards and metrics to compare one company to another. Companies that make ESG claims for their investment products can come under regulatory scrutiny, and may face substantial fines.

How to Spot Greenwashing

Many greenwashing tactics can be convincing. Here’s what to look out for when purchasing a product, or investing in a company that claims to embrace sustainability or ESG investing strategies (i.e., environmental, social, and governance practices):

•   Vague language: Labels such as “eco-conscious,” “clean,” or “100% sustainable” don’t actually mean anything in terms of a company’s manufacturing processes or adherence to environmental criteria. Be sure to research ESG standards that reflect actual environmental practices.

•   Natural imagery: If a polluting company uses marketing images of flowers, trees, beaches, and so forth, they may be trying to appear more environmentally friendly than they really are. Be sure to check whether the company or product lives up to the advertising.

•   Fabricated data: Companies might fund research that will provide “results” that make them look better, or make data up completely. In some cases, it’s easy to vet company research or data via the company website or by doing an internet search.

•   Grand claims: Some companies may pledge to reduce carbon emissions or announce a net-zero policy (or another ambitious goal), with little to back up the claim.

How to Avoid Greenwashing

Whether purchasing products or investing in companies, if you are looking for the most sustainable options, there are a few ways to avoid greenwashing.

1. Look for Clear and Transparent Language

If a brand makes sustainability claims, look for specifics such as certifications, verifiable third-party endorsements, industry credentials, and details about exactly what the brand is doing.

2. Evaluate the Data

If a brand uses statistics and numbers to back up its sustainability claims, make sure the numbers are backed up with credible data.

3. Compare Similar Products

A company may make sustainability claims when in fact their product has basically the same environmental impact as a competitor’s. Compare ingredients, packaging, and manufacturing information to see whether one product is really better than another.

4. Look Beyond the Final Product

Even if a company is improving the impact of its products, it may not be addressing the waste and emissions associated with its operations or supply chain. If this is the case, they may be just making changes for marketing purposes. Check out a company’s website and/or follow watchdog groups to learn how much effort is going into sustainability at the corporate level.

5. Look for Goals and Timelines

If a company is truly implementing a comprehensive sustainability plan, it would include measurable goals and timelines. Ideally those would be available to investors and consumers on a public forum such as the company website, in the interest of transparency.

6. Verify Ingredients and Materials

Some terminology and product labels can be misleading. For instance, a company might say that their product is made from organic cotton or recycled plastic, when in fact only a small percentage of the cotton or plastic is organic or recycled and the rest is not.

The FDA has no guidelines for what the term “natural” means, and according to the USDA the term simply means that a product is “minimally processed” with “no artificial ingredients.”

Greenwashing vs. Green Marketing

Although greenwashing is when a company attempts to cover up their bad practices, there is nothing wrong with a company telling the story of its environmental initiatives, and the steps it’s taking to produce products more sustainably.
That’s green marketing at its best and most transparent.

How to Recognize Green Marketing

Actual green marketing may include:

•   Certifications and endorsements from established regulatory organizations

•   Clearly labeled manufacturing processes

•   Recyclable, compostable, or biodegradable materials (but watch out for these labels, sometimes a product can actually only be composted or biodegrade in very specific conditions that aren’t realistic).

•   Products free from toxic chemicals

•   Use of renewable energy

•   The use of transportation measures such as EVs

•   Purchase of carbon offsets for any unavoidable emissions

•   In-office programs and measures such as renewable energy, LEED certified buildings, on-site composting, or elimination of single use plastic

•   Doesn’t use too much packaging, and ideally avoids plastic packaging

•   Circularity programs that allow consumers to send back the product for repair or reuse

•   High-quality manufacturing made to last rather than one-time or short-term use

•   Fair trade and ethical labor practices

•   Environmental programs outside the company, such as donations or volunteer efforts

Greenwashing Regulations

There are currently no laws in place to prevent greenwashing practices in the U.S. The FTC does have a set of Green Guides, which are not mandatory, but can help companies avoid falling into greenwashing territory.

Globally, the outlook for anti-greenwashing measures is somewhat more robust. The last couple of years have seen a rise in anti-greenwashing policies or preliminary taskforces in various countries around the world.

•   The EU Green Claims Directive is a new law that was approved by the European Parliament in 2024, and is now being enacted by member states, with a September 2026 target date for implementation.

•   In the U.K., the Green Claims Code is a set of principles that businesses must adhere to, or face regulatory consequences.

The Takeaway

Greenwashing is a marketing tactic some companies use to align themselves with the growing consumer and investor desire for sustainable products and investments. It’s related to the concept of “whitewashing,” which means covering up the truth with a positive-sounding story.

Investors committed to sustainability can look for red flags of greenwashing before deciding whether to invest.

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FAQ

What is ESG greenwashing?

ESG greenwashing is the practice of using marketing tactics to exaggerate an organization’s environmental, social, or governance efforts in order to attract customers, employees, investors, or positive media attention.

What are the three most common kinds of greenwashing?

Three common types of greenwashing are the use of environmental imagery, misleading labels and language, and hidden tradeoffs where the company emphasizes one sustainable aspect of a product — while still engaging in environmentally damaging practices.

What is the role of regulations in combatting greenwashing?

Ideally, regulations against greenwashing practices will deter companies from false and misleading practices. Regulations can establish standards that result in clearcut penalties in the case of greenwashing violations. As of early 2025, there are only a few anti-greenwashing regulations in effect, worldwide.


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Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
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Investing in Alcohol Stocks

Investing in alcohol stocks may be appealing to some investors, as alcohol is not only a consumer staple with steady demand, it’s generally considered a recession-proof industry. That doesn’t necessarily translate into stock performance, of course, but it can be one reason that investors find alcohol stocks appealing.

Nonetheless, investing in alcohol stocks can have its drawbacks. Some investors may be turned off by the industry itself. And there are risks that can affect the alcohol industry, too, such as supply chain issues, or even political and societal changes. Don’t forget that during the Prohibition Era in the United States (1920 to 1933), it was illegal to manufacture, transport, or sell alcohol for consumption.

Key Points

•   Investing in alcohol stocks may be appealing due to recession resistance and growth in emerging markets.

•   The alcohol industry is valued at nearly $2.3 trillion as of 2024, with an estimated annual growth rate of 10.74% from 2024 to 2030.

•   Types of alcohol stocks include large multinational corporations, craft breweries, distilleries, and alcohol distribution companies.

•   One of the key growth areas in the alcohol beverage market is the expansion of ready-to-drink products (RTD).

•   Sector risks include regulatory challenges, changing consumer preferences, competition, market saturation, and ethical concerns.

Overview of the Alcohol Industry

The alcohol industry is large, worth about $2.3 trillion as of 2024. It’s also projected to grow by a compound annual growth rate (CAGR) of 10.74% each year between 2025 and 2032. As a point of comparison, the global pharmaceutical industry is worth about $1.6 trillion as of 2023.

A Broad Sector

The industry itself consists of different types of companies and sub-industries. For instance, there are myriad types of alcoholic beverages, the companies that produce them, and the companies that distribute them.

Alcoholic beverages include beer, wine, ciders, spirits (hard liquor), hard seltzers, and more. Ready-to-drink (RTD) products are proving to be a growth area, with pre-made canned cocktails that combine different beverages and flavors with wines or spirits or ciders gaining market share.

The popularity of certain beverages tends to vary by region. Beer might be more popular among consumers in a place like Wisconsin, with its history of brewing, while wine may be more popular among drinkers in Northern California, owing to its focus on wine production.

Alcohol-Related Investments

The industry as a whole also depends on a network of alcohol-adjacent companies that might appeal to investors. In addition to brewers and alcohol producers, there are companies that distribute beverages or products. There are retail stores that sell them. And there are countless companies in between, too, that do marketing, product development, or other types of work for alcohol companies.

For investors interested in alcohol stocks, that means there’s plenty of opportunity to invest in the industry.

Consumer Staple or Luxury Goods?

Alcohol stocks, although a type of sin stock or vice stock, are generally considered a consumer staple. Because demand is generally steady for alcohol products, even in a recession, alcohol stocks have some of the qualities of other non-cyclical consumer goods like bread or shampoo.

But alcohol purchases also fall under discretionary spending, and as such some alcohol investments can be considered a luxury good.

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Types of Alcohol Stocks

As noted, there are many different types of stocks in the alcohol industry. Those include large, multinational corporations, small craft breweries or distilleries, alcohol marketing and distribution companies, equipment manufacturers, and more.

Large Multinational Corporations

The biggest corporations involved in the alcohol industry can encompass a variety of functions. Some, for instance, may produce alcoholic beverages and distribute them as well. But the main thing to know about companies in this category is that they tend to be publicly held stocks with larger market capitalizations — large- or mega-cap stocks — with branches all over the world.

Craft Breweries and Distilleries

Craft breweries and distilleries consist of stocks that are generally smaller, though many craft brewers have been absorbed into larger companies. But generally, these would likely be small-cap stocks in the alcohol production industry.

Alcohol Distribution Companies

Stocks of alcohol distribution companies would involve companies that move alcoholic beverages from one place to another — generally, from a company producing the beverages to the retailer or wholesaler selling them to businesses or the public.

In other words, these are companies involved in the alcohol supply chain, and can include packaging, shipping, and delivery companies.

Factors Influencing Alcohol Stocks

Since alcohol is a regulated substance, and that regulation differs from country to country (and from state to state), there can be a number of factors that influence alcohol stocks’ valuation from a legal perspective.

For instance, in some states, you can buy a six-pack of beer at a convenience store. In other states, that’s against the law; you’d need to buy beer at a designated alcohol retailer, like a liquor store or beer distributor. With that in mind, those rules and regulations can change, too, and that means that political or regulatory changes could potentially have an effect on alcohol stocks.

Economic Impacts

There are also economic factors to take into consideration. As noted, alcohol has sometimes been called a recession-proof industry, since consumption tends to be steady over time. But significant events, like the Covid-19 pandemic, can dramatically increase or decrease consumption.

In addition, companies involved in the alcohol sector can and do feel the effects of the overall economy. So, if there’s an economic downturn of some kind, there’s a chance that these stocks could see their valuations affected as well.

Consumer Trends

Changing consumer tastes are also something that affects the alcohol industry. That includes the types of drinks that people are buying. Ciders and alcoholic seltzers have become popular in recent years, as an example, in addition to pre-made cocktails and other RTD products.

Demographics can also introduce new factors into the alcohol stocks market. For example, younger Americans (Gen Zers) are drinking less than previous generations — which is something that alcohol companies will need to take into consideration, unless the trend reverts.

Pros of Investing in Alcohol Stocks

For thinking about investing in stocks in the industry, there can be some upsides to adding alcohol stocks to your portfolio. Those can include the potential recession-resistant nature of these stocks, as mentioned above, in addition to brand loyalty, and potential growth in emerging markets.

Steady Consumption

As discussed, like many consumer staples the consumption of alcohol tends to be constant. In addition, there is some truth to the notion that consumers like to drink when times are good and also when times are tough. But it’s not necessarily true that these stocks will be safe havens during economic downturns.

Alcohol stocks may perform better than stocks in other categories during a recession, but there is no guarantee that will happen. This sector is subject to its own risk factors, including ingredient costs, consumer trends, political issues, and more.

Brand Loyalty and Pricing Power

Some consumers exhibit high levels of loyalty to certain brands of liquor, beer, and wine. In fact, research shows that alcohol is one category of consumer goods in which consumers tend to be highly loyal to certain brands.

That can be a good thing for investors to keep in mind, as brand loyalty often translates to sales — but not always.

Potential for Growth in Emerging Markets

There’s also the potential that alcohol companies could find traction, and revenue, in emerging markets. For instance, in recent years, it’s expected that countries like India, China, Brazil, and Mexico will see demand for alcohol beverages increase, which could lead to more sales for alcohol companies — and potentially, returns for investors.

Again, it’s important to bear in mind the inherent risks in any emerging market, which can include political or economic upheaval that may roil markets or impact local consumption of consumer goods.

Cons and Risks

While there are potential benefits to investing in alcohol stocks, there are drawbacks, too. Here’s a rundown.

Regulatory and Legal Challenges

As previously discussed, there are many local, state, and federal regulations that govern the production and sale of alcohol. Those rules differ from place to place, and can take a variety of forms: some dictate how and where alcohol can be sold, for instance, and in some places, there are certain times of the day or week where alcohol sales are prohibited.

In some cases, an entire town may be legally “dry” — and alcohol cannot be sold there (but may be available in a neighboring vicinity).

Depending on the type of alcohol investments being considered, understanding the implications of local laws is important.

Changing Consumer Preferences

Also as discussed, consumer tastes wax and wane — and if some start moving away from drinking alcohol for one reason or another, there could be an effect on the industry at large, and investors. That doesn’t mean that alcohol companies can’t pivot, of course, but keeping up with current consumer demands can and will eat up resources, too, potentially affecting investors.

Competition and Market Saturation

There are myriad alcohol companies out there, big and small. No matter where you are, for example, you’re probably not too far from a bar, a store that sells beer, or some other way to get your hands on a drink.

In other words: the alcohol market is big, and it’s saturated. That can mean there isn’t a whole lot of room for alcohol stocks to grow.

Top Alcohol Stocks to Consider

While there are many alcohol stocks on the market, here are the five biggest U.S. companies by market cap:

•   Anheuser-Busch Inbev: The maker of popular brands such as Budweiser, Corona Extra, and Michelob.

•   Heineken: Makes Heineken, Amstel, and more.

•   Constellation Brands: Produces a wide variety of beer, wine, and spirits.

•   Diageo: Makes spirits such as Captain Morgan, Johnnie Walker, and Smirnoff.

•   Brown-Forman: Produces spirits such as Jack Daniel’s and Woodford Reserve.



💡 Quick Tip: It’s smart to invest in a range of assets so that you’re not overly reliant on any one company or market to do well. For example, by investing in different sectors you can add diversification to your portfolio, which may help mitigate some risk factors over time.

How to Invest in Alcohol Stocks

As far as actually investing in alcohol stocks goes, it’s not much different than investing in any other type of stock. There are a few ways to add alcohol stocks to your portfolio.

Direct Stock Purchase

You can buy alcohol stocks directly and add them to your portfolio, for starters. That means firing up an existing brokerage account, or opening a new one through a brokerage, choosing the specific alcohol stocks you want to buy, and purchasing some shares (read more about the difference between shares vs. stocks).

ETFs and Mutual Funds Focused on Alcohol

Investors can also add alcohol stocks to their portfolios by purchasing certain ETFs (exchange-traded funds) or mutual funds.

These types of funds can focus or specialize in specific industries, such as the alcohol sector. Investing in mutual funds or ETFs may also be a way to hedge risk when investing in the sector, as funds tend to have a degree of built-in diversification. Not that alcohol stocks are high-risk investments necessarily, but for more cautious investors, funds may be worth checking out.

Analyzing Alcohol Stocks

Doing your homework before buying stocks is important if you’re hoping to maximize your returns, or at least not lose your initial investment. While there’s no guarantee that you won’t, you can do some basic research and due diligence on the stocks that you’re thinking of investing in.

That may include doing some fundamental research, such as checking out the financial metrics and earnings reports of specific companies. It can also involve looking at the overarching trends and risks affecting the industry, too.

Ethical Considerations

There may also be ethical concerns that investors need to contend with as well when thinking about investing in alcohol stocks. Alcohol is a dangerous substance — it’s addictive, is associated with diseases and negative health effects, and more. There’s a reason that it’s regulated.

As such, some investors may not be comfortable with adding alcohol companies to their portfolios.

The Takeaway

Investing in alcohol stocks may be a way to diversify your portfolio, but investors should be aware that there are some unique risks (and potential benefits) to investing in the sector. There may also be ethical considerations investors want to think about as well, though that’ll depend on their individual preferences.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

How do economic downturns typically affect alcohol stocks?

Economic downturns may see alcohol companies’ shares lose value, but they may not lose as much value as other types of stocks, since consumers tend to buy alcohol no matter the prevailing economic conditions. There are no guarantees, though, that past trends would continue during future downcycles.

What are the main subsectors within the alcohol industry for investors?

Investors may consider investing in companies that produce the main types of alcoholic beverages, such as beer, wine, or spirits.

How do changing consumer preferences impact alcohol stock performance?

Consumers’ preference can and do change, and that may affect alcohol stock performance in that sales may dip or increase. Further, if companies need to pivot into different products, that may eat up additional resources, affecting stock performance as well.


Photo credit: iStock/mihailomilovanovic

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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.


Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at https://sofi.app.link/investchat. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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What Is the Dow Jones?

The Dow Jones Industrial Average is one of the earliest examples of a stock index, a collection of 30 blue-chip company stocks that are calculated into one number that’s supposed to represent the U.S. stock market as a whole or a subset of it.

Now, there are hundreds of indexes, which represent everything from smaller companies (The Russell 2000), to specific industries, like the KBW Bank Index, to the S&P 500, an oft-cited index that represents a broad cross-section of America’s largest companies. But the Dow is still watched, domestically and worldwide, as a leading market indicator.

Key Points

•   The Dow Jones Industrial Average is a stock index of 30 blue-chip company stocks, reflecting U.S. market performance.

•   Unlike market capitalization-weighted indices, the Dow is price-weighted, based on per-share prices.

•   Companies in the Dow include Apple, Microsoft, Disney, and Walmart, representing various sectors.

•   Since 1896, the Dow has expanded from 12 to 30 companies, including more diverse industries.

•   The Dow is a significant benchmark for investors, indicating market trends and sentiment through its performance.

What Is the Dow Jones Industrial Average?

The Dow Jones Industrial Average, or just “the Dow,” is based on the performance of 30 companies that represent the industry leaders in the world economy: Apple, Microsoft, JP Morgan Chase, Nike, Coca-Cola, Walmart, Disney, along with companies like 3M or Caterpillar that you may not be as familiar with, but are massive and play an important role in business in the United States and around the world.

The Dow is considered an index of blue-chip companies, which signals not only some of the largest companies, but also the most solid and well established.

Nonetheless, the companies on the Dow Jones Industrial Average change regularly, reflecting changes in the U.S. economy.

It’s important for investors to follow the Dow, as it’s one of the leading stock market indicators. And while it’s certainly not the only one, understanding the Dow’s movements in addition to other indicators can help inform your investing strategy.

What Makes the Dow Jones Industrial Average Different?

The Dow Jones Industrial Average is just one of many collections of stocks whose value is represented in a single number. The Dow Jones Industrial Average isn’t just distinct because of its age, but because of how it’s calculated.

The other two major stock indices that are frequently cited as bellwethers of the overall market, the S&P 500 and the Nasdaq Composite, are both “market capitalization weighted,” whereas the Dow Jones Industrial Average is “price-weighted.”

That means that the Dow Jones Industrial Average’s “points” are calculated from the per-share price of every stock in the index, as opposed to the company’s overall value. As such, the DJIA doesn’t reflect the overall stock market return, but rather it can be used as a gauge of market trends and/or investor sentiment.

In a market-weighted index, the influence any given stock has over the index’s overall value is determined by a company’s market capitalization or market cap. A company’s market cap is determined by multiplying the number of shares by the value of the stock.

In this type of index, the influence of a company is determined by how valuable the company is, not solely by the price of a stock.

Example of How Stock Price Can Skew an Index

Apple only joined the Dow Jones Industrial Average after it did a stock split, lowering its per share price from around $650 to under $100, but increasing the number of shares by seven. Had it split its stock before joining the Dow, it would have entered the index with a price of nearly $900, as opposed to around $126, giving the company an outsize role on the index.

Because the Dow Jones Industrial Average is price-weighted, adding companies with hefty per-share price tags could cause problems. That’s the main reason that companies like Alphabet, the parent company of Google, and Amazon, aren’t included in the index. On the other hand, Microsoft, which is worth more than $3 trillion as of early 2025, is priced at more than $400 per share and is a member of the Dow Jones Industrial Average.

The Dow Divisor

Today’s economy is far different from the late 19th century or the late 1920s — the number of industries in which the U.S. has large, established companies has grown, and the size of those companies is bigger.

In order to account for some of these changes over time, the Dow Divisor is used to determine the value of the Dow Jones Industrial Average. Using the Dow Divisor can help in historical comparisons and account for differences that may arise due to a stock split or other factors.

How the Dow Jones Industrial Average Changed Over Time

The Dow Jones Industrial Average is intimately tied up with the history of the markets and American financial journalism. The Dow Jones Industrial Average is just eight years younger than the Wall Street Journal, which was founded in 1889, while the Dow Jones Industrial Average was founded as a 12-company index in 1896.

The Dow Jones Industrial Average was originally developed by Charles Dow and Edward Jones. But it wasn’t the first ever stock index; that title belongs to the Dow Jones Transportation Average, a collection of railroad stocks that Dow came up with in 1884.

The 12 companies initially included in 1896 were companies that reflected the shape of the American economy — largely manufacturing and agricultural companies and the transportation networks that helped move goods. The companies included in that first year were:

•   American Cotton Oil

•   American Sugar

•   American Tobacco

•   Chicago Gas

•   Distilling & Cattle Feeding

•   General Electric

•   Laclede Gas

•   National Lead

•   North American

•   Tennessee Coal & Iron

•   U.S. Leather

•   U.S. Rubber

The Dow Jones Industrial Average in the 20th Century

The index was expanded to its current number of 30 in 1928, and by 1932 the Index started to resemble the American economy as we might recognize it today, with a mixture of manufacturing (General Motors, Chrysler), retail (Sears, Woolworth), consumer (Coca-Cola, Procter & Gamble) technology (IBM) and energy (multiple descendants of John Rockefeller’s Standard Oil).

The first companies associated with the personal computer revolution came much later (IBM being an exception), with Hewlett-Packard getting added in 1997, Intel and Microsoft added in 1999, and Apple only joining the Dow in 2015, when it replaced AT&T.

Walmart was added to the index in 1997. America’s entertainment industry, one of its leading export industries, was only represented in the index in 1991, when Disney was added.

Right now the Dow Jones Industrial Average “covers all industries except transportation and utilities,” according to S&P Dow Jones Indices.

While the Dow Jones Industrial Average is managed by S&P Dow Jones Indices, it still retains a connection with the Wall Street Journal and its publishing company, Dow Jones. The editor of the paper is part of the committee that determines membership in the Dow Jones Industrial Average.

The Takeaway

Investors can look to the Dow Jones Industrial Index as an overall indicator of how the largest companies in the U.S. are performing. Historically, the Dow Jones Industrial Average has shown similar returns to the S&P 500, which tracks 500 large-cap U.S. companies.

Indexes, like the Dow Jones Industrial Index, can provide helpful insight for investors. They can be used to help investors compare current and past stock prices, to determine the market performance. Understanding this information can be helpful to investors as they review their own portfolio and adjust their investing strategy.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.


SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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How to Freeze Your Credit

Freezing your credit involves contacting the credit bureaus online, by phone, or by mail to lock down your information for free.

Credit cards and personal information can (and do) get hacked or stolen. Because of this unfortunate reality, it’s important to know how to freeze your credit. A credit freeze can help prevent identity theft or obstruct bad actors from taking out new loans or accounts in a borrower’s name.

Once you know how to freeze (and unfreeze) your credit, it can be quite useful in the right situations.

Key Points

•   A credit freeze restricts access to credit reports, helping prevent identity theft.

•   Freezing and unfreezing credit is available at no cost through major credit bureaus.

•   Individuals can still access their annual credit report even with a freeze in place.

•   The freeze process involves contacting credit bureaus online, by phone, or mail.

•   Unfreezing credit can be done quickly, typically within an hour.

What Is a Credit Freeze?

A credit freeze, also known as a security freeze, allows individuals to limit access to their individual credit report. By freezing their credit, the person makes it more difficult for an identity thief to open a new credit account or loan in their name. This is due to the fact that creditors generally review credit reports before okaying new lines of credit, known as a hard credit inquiry.

However, freezing one’s credit does not prevent a person from viewing their free annual credit report. Moreover, it won’t restrict a person from opening a new account in their own name. They’ll simply need to unfreeze their credit to do so (more on unfreezing later).

Recommended: What’s the Difference Between a Hard and Soft Credit Check?

What Does Freezing Credit Actually Do?

A credit freeze does not actually freeze all outstanding accounts, such as credit cards and loans. Instead, it simply limits others from viewing a person’s credit reports. Under a credit freeze, only a limited number of entities will still be able to view a person’s file, including creditors for accounts that individual already holds and certain government agencies.

This means that credit bureaus can’t give out personal information about a borrower with a frozen account to new lenders, landlords, hiring managers, or credit card companies. Typically, this halts the lending, renting, and hiring process — as well as anyone attempting to steal a person’s identity and open a new account in their name.

Freezing Credit: What’s the Process?

If a person wants to freeze their credit, they need to reach out to at least the three major credit bureaus:

•   Equifax : 1-888-298-0045

•   Experian® : 1-888-397-3742

•   TransUnion® : 1-888-916-8800

People can take it one step further by reaching out to two lesser-known credit bureaus, Innovis (866-712-4546) and the National Consumer Telecom & Utilities Exchange (866-349-5355).

Typically, the agencies will ask for a Social Security number, birth date, and other information confirming a person’s identity prior to freezing their account. The bureaus will then give the person a password, which they may use to unfreeze their account. Make sure to store this information in a safe place.

Recommended: Biweekly Savings Challenge

Does Freezing Credit Cost Anything?

It costs nothing to freeze and unfreeze one’s credit. This is thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act, which mandates that credit bureaus must offer the service free of charge to everyone.

The credit bureaus must fulfill the request within one business day when a consumer requests a freeze through any method aside from mail. When consumers request to lift the freeze by phone or online, however, the credit bureaus must do so within one hour. This frees up the consumer to quickly do what they may need to do, whether that’s applying for a new apartment or one of the various types of personal loans.

Differences Between a Credit Lock and a Credit Freeze

A credit lock works in much the same way as a credit freeze, allowing consumers to protect their credit reports against bad actors and scammers. But, a credit lock can come with a bit more convenience, as borrowers can opt to open and close their locked credit via an app (rather than needing to reach out to each credit bureau with their password to unfreeze it).

While a credit freeze is complimentary thanks to the federal mandate, a credit lock may require paying a small fee. For example, Equifax offers credit locks for free, while Experian offers credit lock as part of a paid subscription.

Just as you’d crunch the savings numbers with a personal loan calculator, make sure to weigh the costs and benefits between these two options as well.

When to Consider a Credit Freeze

It’s really up to individual consumers and their own risk tolerance to decide when it’s time to freeze their credit report. That being said, if a person isn’t actively shopping for a personal loan or a new credit card, for instance, it may be a good idea to freeze their credit preemptively. This way, a consumer can feel a bit more confident that their credit information is in safe hands.

Another time to consider a credit freeze is when a borrower believes their personal data may have been breached, or if their Social Security number was recently disclosed, made public, or stolen.

How to Unfreeze Your Credit

Unfreezing credit is simple. All a consumer has to do is reach out to the credit bureaus by phone or online and plug in the password or PIN provided to them when they first froze their credit. Generally, it takes a few minutes for the account to become unfrozen.

A person can choose to unfreeze their report at one or all of the credit bureaus, but they will have to contact each individual credit bureau separately. They also need to go through the entire process again if they ever want to refreeze their credit down the road.

Individuals can ask to unfreeze their credit for a specific amount of time, such as if they are applying for and hoping to get approved for a personal loan or need someone else to access their account temporarily. Then, the freeze should return automatically when that period ends.

Alternatives to Freezing Credit

While not overly complex, freezing and unfreezing one’s credit can be time-consuming. Additional options are available to consumers.

Setting Up Credit Monitoring

Those who aren’t interested in freezing their accounts might instead consider signing up for a credit monitoring service. While these services charge a fee, they’ll alert users to any and all activity on their credit report. So, any time someone requests information, the person would find out and could then confirm or deny the authenticity of the request.

This could help stop any potential identity theft in its tracks. Still, it should be noted that this service cannot fully prevent theft, and the consumer may not know their identity was stolen until after the fact.

Requesting a Credit Report

For those interested in monitoring their credit for free, it’s possible to get a free copy of one’s credit report each year from all of the major credit bureaus, and possibly even more often. The consumer might then review the report, in detail, to ensure they recognize all of the activity and accounts described.

If the consumer spots anything out of line, they can then take steps to flag and fix it.

Consolidating Credit Card Debt

Another way that some consumers choose to keep track of their credit is by consolidating credit card debt with a personal loan from a private lender. Taking out an unsecured personal loan could help substantially lower the amount a person pays each month to different credit card companies.

By consolidating credit card debt into a single personal loan — one of the common uses for personal loans — a borrower may be able to take advantage of a single fixed-rate debt rather than juggling several high-interest rate cards. Additionally, having a single loan to repay each month can make it easier to monitor payment activity.

Recommended: Personal Loan Calculator

The Takeaway

If you are considering freezing your credit, this can be done for free with the credit bureaus. This can help protect your credit from unauthorized access and identity theft. Typically, you can freeze your credit online, by phone, or by mail and unfreeze it as well, with your file being accessible within an hour. Freezing your credit can help if you are seeking to protect your personal data and better control your personal finances.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.


SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Is freezing your credit a good idea?

If you think your personal information or identity has been compromised (say, through a data breach), it could be wise to freeze your credit to protect you from unauthorized access to your credit report.

What is the easiest way to freeze my credit?

You can freeze (and then unfreeze) your credit report with each of the three major credit bureaus. You can do this online, by phone, or by mail. Of these options, online may be the fastest option.

How much does it cost to do a credit freeze?

It’s free to freeze your credit with the credit bureaus Equifax, Experian, and TransUnion.


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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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