2013: Stocks Soar

Stock market gains in 2013 surely outweighed their performance in 2008!  In most instances, your 401k and any “aggressive” style investments you have should have topped – or at least hovered near – 20%.  If you had time to take a look back at 2013, the S&P 500 topped 31% which as Jeff Kleintop of  LPL Financial writes, isn’t all that rare and that years like this are typically “followed by several years of strong gains.”

So what can we attribute the gains in 2013 to?  Mostly – a little bit of everything from improvement in the private job sector, a “recovery” of sorts in housing, quantitative easing and your general consumer spending more.  GDP increased month-over-month from for the entire year while unemployment slowly sank to around 7%. The biggest question remains: what’s going to happen in 2014?

I don’t see a correction coming, in fact, I see another solid year in 2014 in the scope of 10-15%.    In screening stocks for the upcoming year, I would stay away from anything that seems overbought or had a “meteoric rise” in 2013 ( NFLX, FNMA, FMCC, ZLC, BBY, TLSA).  I do like technology stocks and industrial as well as cyclical and discretionary products.  (DIS, HD, SBUX, GE, MMM, GOOG,V to name a few) and I do like stocks that pay a dividend.  I’d also look for “good” companies that post a negative earnings surprise.  If you seek those out, I’d advise to buy a day or two after the surprise and hold it until just before the next earnings announcement.  This allows you to buy a “fundamentally sound” company at a “relative discount”.

This year at StockDataTrends.com, we are going to be building out new data elements to help you – the individual investor – make informed descisions on what stocks are good for the short term play and what positions you should hold on to.