After a topsy-turvy ride in 2011, stocks ended the year about where they started. And the uncertainty is likely to linger into 2012, prompting many market strategists to advise that investors remain defensive.
For some, that may mean favoring stocks of companies based in the United States, where the economy appears to be picking up steam. Europe remains mired in crisis, and emerging economies could become more susceptible to a recession in portions of the eurozone.
A renewed focus on U.S. stocks could mean that fundamentals like valuations and company profits will again preoccupy investors after a year in which risk aversion drove many to the perceived safety of Treasurys and gold.
For investors seeking reliable clues about what's likely to work in this market, StockScouter's Benchmark Portfolio for January is an ideal place to launch investment research.
The portfolio was created using StockScouter, MSN Money's stock-picking tool. Each month, StockScouter generates a list of 50 stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the coming weeks, based on how those factors have influenced stock prices in the past.
Here are StockScouter's best investment ideas for January.
| StockScouter Benchmark Portfolio for January | |||
| Company | Sector | Dec. 30 close | Scouter score, Jan. 3 |
|---|---|---|---|
| Enbridge Energy Management (EEQ, news) | Oil and natural gas | $34.76 | 9 |
| Aircastle (AYR, news) | Investments | $12.72 | N/A |
| Rail America (RA, news) | Freight hauling | $14.89 | 9 |
| Capital Product Partners (CPLP, news) | Shipping | $6.13 | N/A |
| MGE Energy (MGEE, news) | Utilities | $46.77 | 7 |
| USA Mobility (USMO, news) | Wireless communications | $13.87 | 8 |
| TAL International (TAL, news) | Freight hauling | $28.79 | 8 |
| Roadrunner Transportation Systems (RRTS, news) | Air freight | $14.13 | 8 |
| Ecopetrol (EC, news) | Oil and natural gas | $44.52 | 10 |
| Global Partners (GLP, news) | Petroleum products | $21.87 | 8 |
| Safeguard Scientifics (SFE, news) | Business services | $15.79 | 7 |
| Kinder Morgan Management (KMR, news) | Pipelines | $78.52 | 9 |
| Rigel Pharmaceuticals (RIGL, news) | Pharmaceuticals | $7.89 | 8 |
| Whiting USA Trust I (WHX, news) | Oil and natural gas | $16.75 | 8 |
| STR (STRI, news) | Business services | $8.23 | 6 |
| Main Street Capital (MAIN, news) | Investments | $21.24 | 10 |
| Education Realty Trust (EDR, news) | REIT | $10.23 | 8 |
| Capstead Mortgage (CMO, news) | REIT | $12.44 | 10 |
| PennyMac Mortgage Investment Trust (PMT, news) | REIT | $16.62 | 10 |
| CoreSite Realty (COR, news) | REIT | $17.82 | 10 |
| State Bank Financial (STBZ, news) | Banking | $15.11 | 10 |
| Community Trust Bancorp (CTBI, news) | Banking | $29.42 | 10 |
| Excel Trust (EXL, news) | REIT | $12.00 | 10 |
| Triangle Capital (TCAP, news) | Asset management | $19.12 | 10 |
| World Acceptance (WRLD, news) | Consumer finance | $73.50 | 8 |
| First Financial Bankshares (FFIN, news) | Banking | $33.43 | 10 |
| Inland Real Estate (IRC, news) | REIT | $7.61 | 10 |
| Legacy Reserves (LGCY, news) | Oil and gas drilling | $28.24 | 10 |
| Employers (EIG, news) | Insurance | $18.09 | 10 |
| RTI Biologics (RTIX, news) | Medical supplies | $4.44 | 9 |
| Winthrop Realty Trust (FUR, news) | REIT | $10.17 | 10 |
| Calumet Specialty Products Partners (CLMT, news) | Petroleum products | $20.16 | 10 |
| OSI Systems (OSIS, news) | Electronic systems | $48.78 | 10 |
| Rex American Resources (REX, news) | Specialty chemicals | $22.11 | 10 |
| SPS Commerce (SPSC, news) | Business services | $25.95 | 10 |
| Pebblebrook Hotel Trust (PEB, news) | REIT | $19.18 | 10 |
| Chesapeake Lodging Trust (CHSP, news) | REIT | $15.46 | 10 |
| American Electric Power (AEP, news) | Utilities | $41.31 | 9 |
| NorthWestern (NWE, news) | Utilities | $35.79 | 9 |
| ITC (ITC, news) | Utilities | $75.88 | 9 |
| Entergy (ETR, news) | Utilities | $73.05 | 9 |
| El Paso Electric (EE, news) | Utilities | $34.64 | 9 |
| Brookfield Infrastructure Partners (BIP, news) | Utilities | $27.70 | N/A |
| Kansas City Southern (KSU, news) | Freight hauling | $68.01 | 9 |
| Bio-Reference Laboratories (BRLI, news) | Medical testing | $16.27 | 9 |
| Polaris Industries (PII, news) | Off-road vehicles | $55.98 | 8 |
| Material Sciences (MASC, news) | Industrial materials | $8.22 | 9 |
| First Commonwealth Financial (FCF, news) | Banking | $5.26 | 8 |
| High-Tech Pharmacal (HITK, news) | Pharmaceuticals | $38.89 | 9 |
| Rudolph Technologies (RTEC, news) | Scientific instruments | $9.26 | 9 |
Putting StockScouter to work
Investment research company Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) uses StockScouter to create daily and monthly stock lists. Writer Jon Markman, at the time a columnist for MSN Money, collaborated with Gradient researchers on the tool.
An investor who began in 2001 investing in each of the top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with another 10 stocks, would have generated returns, before trading costs and taxes, of 701% through Dec. 31.
Markman, in this column, suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
An innovative mix 
StockScouter depends on advanced mathematics and software, as well as an innovative mix of measurements and historical testing to forecast the short- and long-term outlook for all U.S. companies that have traded on the major exchanges for at least the past six months.
The analytical tools score stocks on fundamental, valuation, technical and ownership components.
