Pfizer Inc.

PROCTER & GAMBLE CO., $63.03, New York symbol PG, is one of the world’s largest makers of household and personal-care products. Some of its top brands include Tide detergent, Crest toothpaste, Head & Shoulders shampoo and Pampers diapers. In April 2011, the company agreed to merge its Pringles potato-chip business with Diamond Foods Inc. (Nasdaq symbol DMND), which makes a variety of snack foods, including potato chips, nuts and popcorn. Pringles accounts for less than 4% of Procter’s revenue and earnings. Under the terms of the deal, Procter will give its investors the option to exchange some or all of their shares for a holding in Diamond. That would give Procter shareholders 57% of the combined company. Diamond investors would own the remaining 43%....

SPDR S&P 500 ETF $114.42 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. stocks that are chosen based on their market cap, liquidity and industry group. The index’s highest-weighted stocks are Exxon-Mobil, Microsoft, Procter & Gamble, Apple, Wells Fargo & Co., Johnson & Johnson, IBM, Chevron, General Electric, Pfizer Inc., Coca-Cola Co. and AT&T. The fund’s expenses are just 0.10% of its assets....

Johnson & Johnson, $64.15, symbol JNJ on New York (Shares outstanding: 2.8 billion; Market cap: $178.9 billion; www.jnj.com), has three business segments: Consumer (including baby care, skin care, oral care and wound care; 23% of revenue, 14% of operating earnings), Pharmaceutical (including anti-infective, antipsychotic, contraceptive, dermatology and gastrointestinal; 38% of revenue, 47% of operating earnings), and Medical Devices & Diagnostics (including electrophysiology, circulatory disease management and orthopedic joint reconstruction; 40% of revenue, 39% of operating earnings). Consumer products are the most stable part of Johnson & Johnson’s business. However, a number of these products have been recalled lately. To regain the trust of its customers, the company has been forced to upgrade its facilities and implement new testing procedures. Johnson & Johnson’s drug pipeline has been a major weak point in recent years, but the company has turned this around: it has received approval for three new drugs in recent months: marketing approval in the U.S. for a prostate cancer pill called Zytiga in April; approval for Edurant, a once-a-day HIV pill, in May; and approval for Xarelto, a drug used to prevent blood clots after knee and hip replacement surgeries, in July. The company hopes to gain approval for around 10 new drugs by 2015, including medicines used to treat Alzheimer’s disease, diabetes and arthritis....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders. Below, we update our advice on six ETFs — five buys and one we don’t recommend....

We still think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of low p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects....

Patent production continues to be a crucial issue for major drug companies. The expiration of a patent and the entry of a key drug into the public domain is a challenge for those U.S. stocks in the pharmaceutical industry hat have prospered thanks to the sales of a popular drug. Pfizer Inc., New York symbol PFE, makes Lipitor, a leading cholesterol drug. However, the U.S. patent for Lipitor expired in June 2011. That will let rival drug makers sell cheaper, generic versions of this drug. Even so, Pfizer has several new promising drugs in its pipeline, including Eliquis, a new anti-stroke drug that Pfizer developed along with another well-known U.S. pharmaceutical firm, Bristol-Meyers Squibb Co. (New York symbol BMY)....

A long-time reader and portfolio-management client recently asked a question that other investors may wonder about in today’s turbulent markets. He wrote, “You constantly remind members to have a balanced portfolio and strategy for long-term success when investing. But when do you take profits? You have mentioned a couple of times to sell, such as when a stock makes up too much of your total portfolio, or if a company shows questionable management or business decisions. My main question is why don’t we sell when stocks move up and there are profits to be had?” I often asked myself that question in my first decade or two in the investment business. In hindsight, it always seems easy to spot market tops and market bottoms. But trying to spot those tops and bottoms as they occur is harder. I investigated all sorts of market theories and signals that purport to tell you how to do it. They all seem to have “worked,” at least some of the time. But none worked consistently....

AT&T INC., $28.05, New York symbol T, fell 3% this week after the Department of Justice said it would launch a court challenge to block the company’s deal to buy rival wireless carrier T-Mobile from Germany’s Deutsche Telekom AG. Adding T-Mobile would make AT&T the largest wireless carrier in the U.S., with 132 million subscribers. Regulators feel that the purchase would give AT&T too much control over the wireless market, and lead to higher rates for customers. AT&T is paying $39 billion ($25 billion in cash, and $14 billion in stock) for T-Mobile. That’s equal to 23% of AT&T’s $166.2-billion market cap. If the deal falls through, AT&T will pay Deutsche Telekom $3 billion, and give it the rights to some of its wireless spectrum....

PFIZER INC. $18 (New York symbol PFE; Income Portfolio, Consumer sector; Shares outstanding: 7.8 billion; Market cap: $140.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.4%; TSINetwork Rating: Above Average; www.pfizer.com) has extended the patent on Viagra, its popular erectile-dysfunction drug, to October 2019. That will block rival Teva Pharmaceuticals Inc. (Nasdaq symbol TEVA) from selling a generic version. Pfizer gets $2 billion a year from Viagra, or 3% of its annual sales of $67 billion. Pfizer is a buy. MCDONALD’S CORP. $90 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.0 billion; Market cap: $90.0 billion; Price-to-sales ratio: 3.6; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.mcdonalds.com) saw its overall same-store sales rise 5.1% in July 2011. That’s down from a 7.0% sales gain in July 2010....

SPDR S&P 500 ETF $133.97 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. stocks that are chosen based on their market cap, liquidity and industry group. The index’s highest-weighted stocks are Exxon Mobil, Microsoft, Procter & Gamble, Apple, JP Morgan Chase & Co., Johnson & Johnson, IBM, Chevron, General Electric, Pfizer Inc., Coca-Cola Co. and AT&T. The fund’s expenses are just 0.10% of its assets....