I Googled several phrases like ‘Top Stocks for 2014' for stock recommendations from top advisors. I then checked how they actually performed over the year. It was a pretty mixed bag. We look at the 11.5% rise in the S&P 500 and think most stocks did well. Basically, it was hard to lose.
Unless you bought some of those ‘top picks'. Citibank spent much of the year 15% below its early January 2014 highs. One bottom-fisher's top pick, IBM, ended up 14,3% lower. But if it wasn't for a year-end rally, many of those ‘top picks' would have ended up losers.
And what about those tech stocks like Facebook and Google? Facebook (FB) has been in a tight sideways trading range for almost six months now. No money being made there. Google (GOOG) is currently down 17.3% from its early 2014 highs. Even Apple (AAPL), with several of the most successful products in history, is down 11.5% from late-November highs.
And I won't even bring up the energy-sector stocks.
So is the strength of the S&P 500 deceptive? Are ‘the generals' quietly retreating from the battlefield? Yes, many are. And this could be the setup for a larger, longer-term selloff.
Except for one thing – the buying that is going on in companies with familiar names and oriented towards the consumer and a recovering economy.
The restaurant chain parent Brinker International (EAT) has been under steady accumulation since last summer:
CVS is up 45% in the past 12 months:
Lowe's (LOW) is up 36% just from its breakout to new highs in late August:
Paint manufacturer Sherwin-Williams (SHW) is up 50% since early 2014.
All of these familiar-name stocks are under institutional accumulation. Don't go looking at Tesla (TSLA), the new darling of the financial press, for strong gains. Their stock actually is under distribution.
As Peter Lynch, the legendary former manager of Fidelity's Magellan Fund emphasized, look no further than the companies you encounter on a daily basis, the ones you see driving through your town. Americans may have cut back due to high food prices, medical bills, and such. But they are still going to CVS, Lowe's, and buying Sherwin-Williams paint.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
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