10 picks that are up in a down year
It is a stock picker's market, and our MainStreet Investor top stocks are up nearly 10% so far this year.
At the start of the year, I launched a new portfolio of top stocks for the year, on a new site, in an attempt to help the average investor out on Main Street make money.
So far, the year is off to a rough start. Even after a huge rally today, the S&P 500 is down more than 1% this year. How are my top stocks doing?
Though three of the 10 are down, in aggregate they are up an astounding 9% since the beginning of the year.
Why? Yes, partly it is simply great stock picks.
Bare Escentuals (BARE), recommended in part as a takeover play, received a buyout offer shortly after the start of the year for a premium of 50% above my recommended price.
But, it’s more than that. You won’t find any big banks, brokers or moribund blue chips on the list. After a decade of poor performance, two meltdowns and more, I think it’s time to look in some new places for good ideas.
For 2010 that means looking at smaller companies that can grow quickly. With an economy on the mend it is always smart to think small when a new business cycle begins.
These smaller companies can grow earnings in a very large way that often translates to significant stock gains. In some cases investors can acquire such growth at a cheap price. If so, big gains can be had as we are seeing with my recommendation of RICK.
For those skeptical of owning stocks I suggested another way to play a volatile market using an absolute return strategy. This approach uses hedging and shorts to decrease risk in a portfolio thereby minimizing losses during a market decline.
The idea was to match a buy of an undervalued stock with the short of an overvalued stock. Placing each of these trades would have resulted in a gain of 3% since the publication of the article in mid-January.
Now, that’s how to beat the market.
Make sure you get your copy of our Top 10 Stocks for 2010.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.