Picking Stocks Amid Slower Growth

9 Ways to Cut Crypto Taxes Down to the Bone | Don’t Forget Taxes on Lotto Winnings | 9 Ways to Cut Crypto Taxes Down to the Bone Created for {EMAIL} | [Web Version]( July 27, 2022 CONNECT WITH KIPLINGER  [LinkedIn]( [Facebook]( [Twitter]( [Instagram ]( [Youtube]( [SIGN UP]( ⋅ [WEBSITE]( [] What's in the Works [] More signs of slowing growth have emerged in recent business updates and earnings announcements from several of the pandemic's biggest stars. Take Shopify ([SHOP](), for instance. The e-commerce platform on Tuesday said it is slashing its global workforce by 10% because it overestimated the sustainability of the impressive growth it had seen for most of the past two years. And last night, Alphabet ([GOOGL]() and Microsoft ([MSFT]() reported slower revenue growth rates on both a quarter-over-quarter and year-over-year basis. For investors, this slowdown means being more selective when picking stocks within the growthier tech sector, says David Trainer, CEO at investment research firm New Constructs. The best types of stocks, he adds, "are the ones where cash flows are strong and valuations underestimate the company's ability to generate cash flows in the future." Trainer recommends investors do their homework before adding new names to their portfolio to fully understand what they are buying, including researching a company's ability to generate cash. "Betting on stocks to keep going up just because they've been going up in the past is no longer a reliable strategy," he says. Trainer likes several Big Tech names appearing on this week's [earnings calendar](, including Microsoft and Alphabet – two of the most profitable businesses of all time, he says – which, despite showing slower top-line growth this time around, ended the reporting period with $17.8 billion and $12.6 billion in free cash flow, respectively. [Unlimited 1.5x Miles for Every Dollar Spent]( This first class card offers you no-annual fee, flexible rewards and unlimited match of all the miles you've earned at the end of your first year. [READ MORE]( ADVERTISEMENT: [] Continued [] Feeling lucky? If so, run out and buy a Mega Millions ticket before the next drawing on Friday night. You could win $1.025 billion (yes – that's BILLION with a "b"!). Well, sort of…if you take a lump-sum cash payment (which most people do) and factor in Uncle Sam's cut, you'll walk away with far less cash in your pocket. The estimated amount of the cash payment is $602.5 million. However, you'll also end up [paying approximately $222.9 million in federal income taxes]( on that amount, which reduces your spendable winnings to around $379.6 million. (The IRS will automatically take 24% of your winnings, and you'll owe the rest at tax time). That's nothing to sneeze at, of course, but it's still a lot less than $1.025 billion. And the tax payments don't necessarily stop there. Your state may want to wet its beak, too. If your [state doesn't have an income tax](, then you're good to go. California winners also don't have to pay state tax on lottery winnings if the ticket was purchased in the state. But if you live in another state where Mega Millions lottery tickets are sold, you'll have to pay state income taxes on your jackpot. Also expect state taxes to be withheld from the payout if you buy a winning ticket in a state with an income tax. Free download, [The Kiplinger Letter's Forecast](. No information required from you. 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