Momentum has carried the stock market to record highs in 2013.
Many expect the upward trend to continue into 2014. The improving
domestic housing scene, still-low interest rates, tell-tale signs
of life in Europe, and a less worrisome outlook for China will
sustain the market's momentum in the New Year.
I don't buy into this otherwise appealing narrative. My
reading of the economic and corporate fundamentals leaves me with
a far more cautious outlook for 2014. It has been an easy ride
thus far in 2013 but 2014 will require a sound strategy, and a
rigorous stock selection model.
That is exactly how we have designed the
Top 10 Stocks for 2014
. We are not hunkering down in a defensive posture by loading up
on stocks from the utility, telecoms and consumer staple sectors.
our best stock picks for 2014
represent a fair amount of deliberate and calculated offense
through exposure in the finance, consumer discretionary,
industrial and other sectors.
We did an excellent job in 2013 and 2012. The
Top 10 portfolios
for both years handily beat the broader market. The Top 10 Stocks
for 2012 nearly tripled the S&P 500, with the portfolio
returning +31.7% vs. +12.1% returned by the S&P 500.
Top 10 portfolio
for 2013 has returned +31.1% through the end of the third
quarter, beating the S&P 500's +19.8% return in the same time
period. The portfolio has further added to is lead on the market
in the first two months on Q4 and remains on track to finish the
year in style.
There is obviously no guarantee that we will be able to repeat
our past outperformance in 2014. Our robust stock-selection
framework in place puts the odds in our favor.
Top 10 portfolio
follows a year-long buy-and-hold strategy. We retain the
flexibility to make mid-course correction to respond to
unforeseen market conditions. The idea is that if the macro
framework turns out to be different than what we expect or the
outlook for an individual company turns negative, we will stay
ready to make change(s) during the year.
Click here to learn more about Zacks' Top 10 Stocks for 2014
Have a prosperous 2014.
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