Wednesday, January 23, 2013

Bear, Bull, or Hype?

Bear, Bull, or Hype? What exactly does this year have in store? Interestingly enough, this question appears to be Wall Street's 2013 it-question. This comes as a surprise however from analyst buzz of the past couple years.

 A year, or even two years prior, a bull market was out of the question; preposterous in fact. In 2009 the DJIA reached tremendous lows—some months treading in the 6,000 percentile. 2008 and 2010, the years prior and post of 2009, also were not the greatest. 2008 saw mostly between 7,000-8,000 and 2010 ranging from 9000-10,000.

 However due to market indicators, Q4 reports coming in from last year, analyst-chat, and solid Dow and S&P increases, a bull market just maybe on the horizon. As of today (timestamp: 1/23/2013 6:17pm) the Dow is at 13,799.33 which is much more attractive than 6,000. A good investor knows the market's song and dance— dancing accordingly; so good news is always taken with a pinch of salt.

Not even one full month has passed, yet the analyst bees are buzzing. So are we going to see influx in the 2013 markets? Are the surfacing Q4 reports gilded? Or is it all hype and should we still buy in moderation?

Liberal Financiers I say ride the hype, and here's why.

Booming Markets:

There are many markets right now that are seeing superb-impressive growth!

People are investing within the stock market in record number. Not only that, but companies are also profiting. When stock purchases surge and profits increase, a catalyst is formed and booming markets emerge.

Some markets that will see continuous growth in 2013:

  1. Tech giants.
  2. Online streaming companies such as Netflix ($NFLX) or Comcast who owns Hulu ($CMCSA).
  3. Resource companies like Alcoa ($AA) or even Corning ($GLW) the glass makers.
  4. Pharmaceuticals.
  5. Housing.
  6. Automobiles.*
  7. Insurance.*
  8.  Chemicals.*
  9. Aerospace.*
  10. Regional Banks.*
  11. Health Care.*
And those are a few of the many markets with expected increase.

Buyer Satisfaction:

The stock market is without purpose if there is no one to invest.  This however will be no problem in 2013 because investors have been praising their smart investments so far. 

Stock yields overall have increased with some still increasing as of now. Here is the S&P's 2012 year end list of great stock yields.

S&P 1500
Impressive Stock Yields
For Year Ended December 31st, 2012
Stock Price (as of 12/26/12)
% YTD Increase (as of 12/26/12)
Headwaters Inc ($HW)
$8.13 (today: $10.10)
3D Systems Corporation ($DDD)
$51.09  (today: $68.35)
Regeneron Pharmaceuticals Inc ($REGN)
$173.04 (today: $176.16)
Lumber Liquidator Holdings Inc ($LL)
$51.31 (today: $56.26)
PulteGroup, Inc ($PHM)
$18.15 (today $20.84)
M/I Homes Inc ($MHO)
$25.74 (today: $28.34)
AMN Healthcare Services Inc ($AHS)
$11.42 (today: $12.40)
Exterran Holdings Inc ($EXH)
$21.46 (today: $23.04)
Sprint Nextel Corporation ($S)
$5.50 (today: $5.64)
Mariott Vacation Worldwide Inc ($VAC)
$40.37 (today: $44.04)

Not only are stocks yields impressive, but many analysts are also considering them the only attractive investment option—for the moment at least. Bonds are dead and Funds are lukewarm.

Good signs, Better market?

Taking the hocus-pocus out of the magical world of investments, we invest to accrue higher returns; and stocks are delivering. 

The markets conclude it, analysts are concluding it as well. So as your Liberal Analyst, I'm telling you to enjoy the volatile market Liberal Financiers! The market is on the rise and 2013 will bring a moderate or peeking bull market from 2012 observations.

Small time investors:
I would recommend investing in companies who have small market share within big markets. Companies such as RIM, Sprint, Deutsche Telekom, and  Corning are good choices.

Novice investors:
To novice investors I would recommend the same. But rather than sticking to smaller companies, I would recommend up-scaling the choices. Some good choices are fashion brands such as Michael Kors or tech companies like HTC.

Bigger investors:
As I always state, most likely, a big time investor would not be taking financial advice from me because that's what Merril Lynch, Goldman Sachs, and JP Morgan are for but I digress. For bigger investors transportation and commodities are a good place to invest.

Thanks for reading and if you have any insights, questions, or comments on my content, sources, or anything please feel free to inquire and leave them.

Until next time,
-Your Fellow Liberal Financier

 *6-11 Jim Cramer's Places to Invest in 2013

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