While MarketWatch columnist Howard Gold http://www.marketwatch.com/story/three-investments-to-own-and-three-to-2015-01-13 doesn't see a bear stock market this year, some "sectors and asset classes will do better than others."
Gold recommends owning:
- Healthcare and Technology Stocks: both sectors offer "stable, dividend-paying blue chips," such as Intel, Oracle Microsoft, Merck and Johnson & Johnson, he writes. You can find also many innovative companies, including Apple, Facebook, Gilead Sciences and Celgene.
- Muni bonds: "Investors have gone far afield in search of yield, but for too long avoided one of the best ways to get it: municipal bonds," Gold says. State and local government finances have improved markedly since the 2008 financial crisis. Munis make the most sense for investors in at least the 28 percent tax bracket, he writes.
He recommends avoiding:
- Gold: "The deflationary forces sweeping Europe and Japan combined with a rising U.S. dollar and inevitably higher U.S. interest rates is a one-two punch that gold cannot withstand," Gold says. He expects the metal to ultimately settle at $800 an ounce.
- Emerging Markets Stocks and Bonds: "Although Wall Street will never admit it, many emerging markets, including all the BRICs except India, are in secular bear markets," he notes, adding that emerging market bonds are "joining the pity party."
Meanwhile, with interest rates likely to rise only gradually from record lows this year, you might want to consider dividend stocks to drum up more income.
Among those favored by Josh Peters, director of equity income strategy at Morningstar, are General Electric and Coca-Cola,
CNBC reports.
GE stock has run into tough sledding lately, thanks to its heavy reliance on the energy sector.
But Peters says the share price doesn't reflect GE's strategy to shrink its financial services business and expand its more powerful industrial and infrastructure sectors.
As for Coke, its "biggest headwind far and away" is the dollar's strength, Peters notes. "I don't know when that's going to turn around, but eventually it's going to." Peters expects Coke to enjoy annual dividends and earnings growth of 7 to 8 percent long term.
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