Alan Farley: Go small
Alan Farley writes investing commentary for TheStreet and is publisher of "Hard Right Edge," a source of trading advice. He sees investing opportunities in small-cap stocks. Among his picks is Cepheid (CPHD, news), a Silicon Valley company focused on genetic diagnostics. Its tests automate the process of preparing and amplifying DNA to detect diseases.
The stock sold off, from $33 to $5, during the bear market but has since rebounded; it closed at an all-time high of $35.50 on Tuesday. The stock still has plenty of upside, said Farley, who foresees it surging past $50 a share.
MicroStrategy (MSTR, news) is another stock Farley favors. The McLean, Va., company provides software that lets customers sift through databases for sales trends, customer behaviors and other details that can be used in marketing, forecasting and fraud detection.
The stock is trading around a 10-year high, so investors should wait for it to pull back to $150 before buying, Farley recommended.
David Bach: Muni bonds beckon
"If you don't have a lot of debt and you're in a high tax bracket, I would recommend searching out municipal bonds," said David Bach, a former Morgan Stanley executive and regular contributor to the "Money 911" segment on NBC's "Today" show.
"I've been investing in closed-end muni bond funds since December, and the rate on my funds is 7% tax-free -- and the funds are up for the year, on average, and outperforming the stock market," Bach said.
"I'm (also) investing in exchange-traded funds that pay dividends. I like the iShares S&P U.S. Preferred Stock Index (PFF, news); it's currently yielding around 7%," said Bach, author of "Debt Free for Life: The Finish Rich Plan for Financial Freedom."
Jonathan Hoening: Test the downside
"Every investor and portfolio is unique, but, that being said, I've been shorting General Motors since March and expect the stock to trade even lower in the second half," said Hoenig, a former floor trader at the Chicago Board of Trade and a panelist on "Cashin' In" on the Fox News Channel.
"GM received a $50 billion bailout that left taxpayers as its largest shareholders. At its current price of about $30 a share, GM stock must rise about 75% for taxpayers to break even," Hoenig said. "But published reports suggest the government is unwilling to sell at a loss, instead opting to hold out until the stock at least rises to its IPO price, if not higher.
"This is the same irrational 'sunk cost' fallacy that kept investors holding on to Cisco Systems (CSCO, news) after buying it at $80 back in 1999. I just feel like the market isn't going to be so accommodating to the government and will instead test the downside on GM's price," Hoenig said.
Clark Howard: Buy investment property
The smartest move an investor can make is to buy investment real estate, said nationally syndicated consumer advocate Clark Howard.
"The tide has turned, and rental income is rising at the same time that the cost of owning real estate is at ultra-low levels," said Howard, author of "Clark Howard's Living Large in Lean Times."
"Cash buyers will be the big winners," Howard said. "Buyers are scarce, and the sellers are desperately creating the perfect buying opportunity."
