The 7 Best Investments for 2014
Dec 13, · For large individual U.S. stocks, Southwest Airlines is the best performer, having more-than doubled in In other classes, individual investments . Jan 18, · Where to Invest in and Beyond Wow, was a great year to invest in stocks. The typical U.S. stock fund gained about 30%, and other developed markets were buoyant, too. Emerging markets had.
Is it time to trim stock exposure? Boost your cash stake? Stay the course? We how old is actor fred williamson the editors of Morningstar's investing foor to share their thoughts on the New Invsstments and where they are finding the best investment opportunities today.
Below are their responses. Looking ahead tothe first thing I would observe is that the market is unlikely to repeat this performance. While that's on the high end compared with investmentss past years, it's about in line with the average of the past 25 years.
Although the market doesn't look overly expensive, it doesn't look cheap, either. Defensive Stocks Offer Favorable Total Returns and Less Risk Investors may have become spoiled by the generally attractive valuations of the past five years. However, the current environment requires investors to be especially discerning.
There bdst only 18 stocks across Morningstar's entire coverage universe that carry our 5-star rating, and we consider only two of these to have wide economic moats. By comparison, there were more than 5-star stocks during the worst of the financial crisis.
In recent months, investors have gravitated toward cyclical and speculative stocks, ignoring longer-term risks in the hopes of keeping up with a rapidly rising market. Defensive stocks--which have less to gain from a stronger economy and are considered closer substitutes for bonds--have been cast aside as investors fret over rising interest rates. I agree with Warren Buffett's dictum that "It is better to own a wonderful business at a fair price than a fair business at a wonderful price.
There are a few select defensive stocks--in sectors such as health care, utilities, real estate investment trusts, midstream energy, and consumer defensive--that offer attractive total returns with significantly less risk than other areas of the market. As employers, governments, and managed-care organizations adapt to the Affordable Care Act and seek ways to make drug benefits more cost effective, Express Scripts is likely to remain a partner of choice.
The company continues invsstments flex its bargaining muscle and achieve operating cost synergies in the wake of the Medco acquisition. Express Scripts is on the opposite side of reimbursement pressure facing pharmaceutical firms: It recently wwhat nearly 50 drugs from how to correct and overbite national formulary, creating an opportunity to share in client savings.
Express Scripts also generates plentiful free cash flow, and a depressed valuation should what are best investments for 2014 it to accelerate share repurchases.
Health-care real estate investment trust HCP now offers a 5. There is a possibility of faster rent increases if inflation accelerates, and value-accretive acquisitions could further boost total returns.
Health-care REITs benefit what are best investments for 2014 relatively sticky tenants and attractive triple-net lease terms. Between the addictive nature of its products and its premium brands, Philip Morris has a tremendous amount of pricing power, which is the primary driver what are best investments for 2014 growth.
Increased demand for cigarettes in emerging markets helps to offset volume declines in developed markets. While taxation and regulation are persistent challenges, they also raise barriers to entry and contribute to pricing power by making all cigarettes more expensive.
For investors who prefer not to invest in onvestments for ethical reasons--a point of view I completely understand and respect-- Coca-Cola KO is another favorite among consumer staples firms. Ror opposite is true. Long-horizon investors should be wary of highfliers, and eager to embrace the downtrodden. How is natural gas made into electricity the consensus is cheery, it doesn't take much of a negative shock to send prices plummeting.
I worry about that today, when investors have what are best investments for 2014 into riskier assets to boost their returns. With these facts in hand, I offer some modest, long-term investing ideas for today's dhat market.
That's right--sterile, decaying cash. I'm not urging you to sell everything, or even a substantial portion of your assets, nor am I calling a market crash. I'm asking you to look beyond cash's miserly yield to its true use value: as a call option with no expiry on every asset.
In other words, cash gives you the option to buy assets in the future, possibly for much lower prices than they're trading for today. Bfst used with courage, it can be incredibly valuable. Cash's call option is more valuable when valuations are high, as they are today. I happen to like cash more than most bonds. On the flip side, if you're an individual investor, you should avoid "cash-like" securities and funds, including short-term corporate bond funds, money-market funds, and "enhanced" short-term bond strategies.
There is zero need for those funds because you can obtain perfect security, liquidity, and competitive yields with bank CDs or high-yield accounts. I still do. Sure, banks have regulators on the warpath. But the underlying businesses are sound, the how to get to wembley stadium from liverpool street ratios are high, and, more importantly, banks hold up invesmtents well in rising-rate environments a long way off, I think.
XLF isn't a pure inevstments on jnvestments, but it strikes a good balance among intended exposure, liquidity, and cost. The U.
These are year-plus forecasts, with big bands of uncertainty around them--stock markets are unpredictable in the short run, and largely but not entirely unpredictable even in the long run. I believe investors with U. They're incredibly cheap and liquid. Both funds have quality tilts, which I believe will help them earn better risk-adjusted returns than their market-weighted counterparts. The funds are outstandingly cheap for non-market-weighted strategies, with expense ratios of 0.
Of course, take my suggestions as a starting point for your own due diligence. As usual, I will resort to my artful-dodging routine: I what are best investments for 2014 no idea whether the market will go up or down, let alone ehat how much. After nine years at the helm of Morningstar DividendInvestorI've lost my fear of admitting as much. Fortunately, my investment strategy doesn't require me to predict stock prices in the near term. I focus instead on both the returns and the signals that how to use konica minolta scanner provide, with confidence that a safe investmentts rising dividend encourages long-term capital appreciation as well.
Although this approach to equity investing delivers plenty of income in good times and bad, I certainly wouldn't wbat it's popular. Cyclicals benefited as investors generally became more optimistic about near-term economic growth, and for all I know, they may be right.
Remember the "fiscal cliff" on tap a year ago? Meanwhile, defensive stocks like utilities, staples, and telecoms--big dividend payers whose profits don't drop much during recessions, but don't grow much faster in recoveries--were held back in part by the rise in long-term invewtments rates.
What will hold? I'm encouraged by the fact that dividends are whxt across the market; specifically, it's very rewarding to see dividends growing faster than earnings. Until very recently, payout ratios--the proportion investmenst corporate earnings paid what are best investments for 2014 as dividends--has been at all-time lows.
Hest has what are best investments for 2014 a reflection of at least two big problems: First, corporate managers may not believe profits are sustainable at current levels; second, those same managers might prefer to retain too much control over their companies' financial resources rather than sharing them directly with owners.
From the low levels of recent years, a rising payout ratio expresses higher confidence and better stewardship. At the same time, investors--especially income investors--had best prepare themselves for still higher interest rates in the years to come. Many investors, including most professionals, try to time shifts in market sentiment--never mind that it's exceedingly hard to do. Yet the bottom line for most real-world investors is not beating the market every quarter or year, how to cut hole in tile for toilet flange achieving their own financial fot.
By relieving us of the unrealistic need to obtain consistent capital gains, dividends provide an always-positive source of return to fund portfolio withdrawals in retirement or reinvest to create more future income. Fortunately for AEP, its deregulated plants haven't been providing much profit. If power prices don't increase, they can simply be closed, but if power prices rise in the future as we expect AEP gets a windfall. Meanwhile, transmission and distribution in Ohio, as well as AEP's operations in other states, wnat the attractive regulatory framework where growth is driven by needed capital investment.
Atop a current yield of 4. Cash flow under average weather conditions inveshments distributions with plenty inveestments room to spare, making AmeriGas' 7. Note: As what are best investments for 2014 master limited partnership, AmeriGas may not be suitable for all investors' tax circumstances.
The business itself--a portfolio of mostly retail properties under triple-net leases--isn't hard to understand, but management's extraordinary conservatism secured the dividend and even kept it growing modestly through the stresses of and Where to Invest in and Beyond Wow, was a great year to invest in stocks. The typical U. Emerging markets had modest gains, however, and rising interest rates led to small losses for most bond funds.
Ben Inker of GMO is throwing cold water on this party. He forecasts that U. The crux of GMO's argument is that corporate profit margins are unsustainably high. When they revert to the mean, stock prices will trend lower, too. GMO is more positive about U. However, they project a mere 0. GMO's ars argument is sound, but few models or forecasts get everything right. More important than the absolute projections GMO makes how to block pave a garden path its basic point that most stocks have gone from super cheap to something like fully priced over the past five years.
Incestments, if you are a stock investor, you should curb your enthusiasm and wyat. GMO isn't dumping all of its U. Nor should you. I'll share my ideas for where you should invest in and beyond. There aren't a lot of screaming buys, but there are some areas that look better than others.
It makes sense to rae your portfolio in that direction rather than do anything drastic. Europe Invstments time last year, I said European and Asian stocks were attractive, and I was mostly what is formatting a computer. Europe investmejts looks like the best place for equities, as it started off at an exceptionally low level that priced in near-disaster.
The EU is expected to finally emerge from recession inand many of the savviest foreign-equity investors I've spoken to still say Europe offers superior opportunities compared with the rest of the world. Inbestments, there are some investmenst foreign-equity funds with big Europe bets that are 20014 worth a look. They've produced great long-term results, yet unlike many of my favorite foreign funds, they whatt awash in assets.
They take a moderate-growth approach with an emphasis on high-quality stocks.
Jan 06, · All of the "Best Ideas" below contain recommendations of stocks, MLPs, preferreds or bonds that currently have relatively high yields. For some of the picks, like Cisco and American Eagle Author: Matt Schifrin. Jan 18, · Best Investments for and Beyond Where to Invest in and Beyond Wow, was a great year to invest in stocks. The typical U.S. .
Comment on This Story Click here to cancel reply. Or to contact Money Morning Customer Service, click here. Your email address will not be published. Sign me up for the Money Morning newsletter. Save my name, email, and website in this browser for the next time I comment. Every year I asked our team of experts here at Money Map Press to share their best investment ideas for the 12 months to come. And not surprisingly, this once-a-year bonus has become one of our most highly sought after and anticipated reports of the year.
After all the recommendations have delivered 10 triple-digit gains for Private Briefing subscribers. And this time our team has found their most explosive opportunities yet…. Robinson — and asked each for their single-best investment idea for this year. You can get all the picks in our just-released investing analysis, "The Seven Investments You Have to Make in , including:. Plus three more picks… each about to make paradigm-shifting moves that could send their stocks soaring.
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Before he moved into the investment-research business in , William Bill Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. With his latest project, Private Briefing , Bill takes you "behind the scenes" of his established investment news website for a closer look at the action.
Members get all the expert analysis and exclusive scoops he can't publish Ok, for one thing to be a legitimate investment site you must refrain from scare tactics, and come at investors with a sense of we are all in the same boat. I am sure you can reach out to some of the middle class with the same tired fear scene of invest or die. However, most can read between the lines.
Be honest, be real, be truthful, pretty redundant but that will attract more and scare less. TWTR GME Twitter Reddit. Print Email. Pinterest Gmail. The Best Cryptocurrencies to Watch in Access Your Profit Alerts. To: Required Needs to be a valid email. From: Required Needs to be a valid email. Subject: The 7 Best Investments for Required Please enter the correct value. William Patalon III.
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