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I get it. I understand the reluctance to embrace this rally. I see it in the statistics week in and week out, which show much less money flowing into stocks than you might expect given the market’s performance.
Me?
I believe healthy skepticism IS warranted almost all the time. You don’t want to just chase the latest market fad, or throw money aggressively at any old lousy stock just because it’s going up.
At the same time, you don’t want to just ignore or avoid a market move like this entirely. I believe there ARE ways you can generate relatively safer yields and capital gains in this environment.
Indeed, I’ve been sharing several strategies with you — ones that are already delivering handsome profits. I trust you’ve been following along, taking advantage of them, and are happy with the results.
My Safe Money Report readers, for instance, just bagged a gain of 16.4 percent in only four months on one company active in the food industry. Several other consumer staples, utilities, and other recommendations are showing handsome double-digit open profits. And my “bond market alternative” plays are up nicely as well.
[EDITOR’S NOTE: Not a Safe Money subscriber yet? Want to get your hands on these kinds of gains? Then just click here.]
Where Opportunity Can be Found
in the Back Half of the Year!
So what can you do to potentially make the rest of 2013 as rewarding as the first half has been? How can you participate in this move, without abandoning your senses and going hogwild with risk?
First, I think you need to keep investing in the sectors that are leading this market — health care, utilities, and consumer staples. The global economy is far from robust, and that makes these stocks attractive. The reason: They can generate reliable sales and earnings growth no matter the economic backdrop.
For instance, I recently added a fresh play in the drug sector that yields more than 4 percent. The stock also just broke out of a multi-YEAR downtrend, thanks to a series of corporate restructuring moves and optimism about promising new products.
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| Investing in sectors such as health care — that generate reliable earnings growth regardless of the economic backdrop — could prove to be very rewarding. |
Second, I see a few industries, sectors, and stocks that are attractive due to SECULAR tailwinds, rather than cyclical forces. In other words, they’re in their own private bull markets, and don’t need a booming global economy to chug along.
Take the natural gas sector. It was beaten down mercilessly in the last few years thanks to the sinking price of the underlying commodity. But demand is now rebounding, the supply glut is easing, and new gas finds in parts of the U.S. and overseas are helping some companies coin money!
One producer I just took a shine to broke out to a new high several weeks ago, and it’s been consolidating those gains ever since. I believe its next big move could be right around the corner, and that’s why I added it to the model portfolio.
Third, I believe there are only a select few corners of the bond market worthy of your money. Think short-term securities, and corporate notes versus government bonds.
Why?
The Federal Reserve, the Bank of Japan, and other global central banks continue to throw gobs of money at the bond market. They’re buying up anything and everything that isn’t nailed down, and are showing little regard for quality or valuation. That raises the risk of serious future losses. And with yields on many kinds of debt so paltry, you’re not being paid enough to compensate.
Ready to get more specific advice and names? Then take Safe Money for a spin by clicking here or calling 1-800-291-8545. Or at the very least, consider exchange traded funds or mutual funds that invest in sectors like staples, natural gas, or short-term corners of the bond market.
You can start by searching on a site like the Vanguard Group by clicking here. Then filter by sectors or asset class by checking the boxes you’ll find in the upper left-hand corner of the page.
Happy hunting!
Until next time,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
