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10 money-making investment ideas for 2013

 

2012 was a pretty good year for stocks, but can a 4-year-old bull market continue its run?

 

 
 
Doug Griswold / MCT File

MarketWatch

A Wall Street adage says that time in the stock market beats timing the market. But in 2012, both of those strategies worked.

Many stock investors believe that 2013 will be their lucky number. They point to a menu of research reports lauding corporate America’s relatively strong financial shape and the prospects for the U.S. economy’s steady, however slow, growth. By this logic, even holders of low-yielding bonds can expect a steady road for non-government debt, as long as the Federal Reserve holds the line on short-term interest rates.

That said, this bull market turns 4 years old in March — well-past the 2 1/2 year historical average for U.S. bull runs. Accordingly, next year the major market action may be outside of the United States. Heading into 2013, the euro zone seems to have priced in its economic troubles for now, and Asia appears to be the growth engine of a global economy that is still debt-laden and disturbingly weak.

Some strategists see non-U.S. stock markets, including the austere euro zone, besting U.S. equities in 2013. That’s saying a lot, given predictions for the benchmark Standard & Poor’s 500 to hit 1550 or perhaps 1600 (a record high) a year from now — an advance that would range between 7 percent and 11 percent, respectively, from the Dec. 20 close.

“Corporations have delivered the goods,” says Bob Turner, a veteran growth-stock investor and chief investment officer of mutual-fund firm Turner Investments. “Economic growth continues, moving forward, and corporations in the U.S. and globally are managing effectively.”

Yet looking ahead, investors would do well to remember the words of legendary American sports columnist William “Blackie” Sherrod, who said that “History must repeat itself because we pay such little attention to it the first time.” The coming year surely will be much like any other, with geopolitical conflicts and conflicted outlooks that will challenge investors’ resolve.

Before getting to 2013’s recommendations, let’s see how MarketWatch’s 10 investment ideas for 2012 fared: Pretty well, actually, given the surging S&P 500.

Many of the picks MarketWatch made in January, based on recommendations and research from investment professionals, turned in solid double-digit and high-single-digit gains.

For example, high-quality dividend-paying stocks and corporate bonds, along with real-estate investment trusts, European stocks and small-cap stocks, all delivered positive performances. While several recommendations — notably gold — lagged the S&P 500’s 17.4 percent gain for the year through Dec. 20, they did a good job diversifying portfolios. Read more about our 2012 investment ideas.

Which investments are poised for a strong 2013 showing? Here are 10 portfolio moves to consider:

1. Mega-caps go big

“The new leadership within the equity market is mega caps,” Mary Ann Bartels, technical research analyst at Bank of America Merrill Lynch, wrote in a recent research report.

Mega caps — the top 50 U.S. companies by market value — are “reversing a bear trend that had been in place since 2000,” Bartels adds. “This reversal signals a new secular bull market is underway for the top 50, or mega caps.”

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