The markets have certainly given us a hair-raising ride since last month. Although the Federal Reserve’s decision to bump up interest rates was already priced into the market, the headwinds of China sent global market exchanges into a tailspin. The Chinese economy is trying to change from export/investment-based to consumption-based, which has been challenging; the government continues roiling the markets by interfering with them, including its short-lived circuit breaker mechanism; and China’s economic growth forecasts keep declining, with the latest number at 6.9% for 2015. Hence, China’s markets have been on a roller coaster ride, initiating volatile swings throughout world markets.
As you’ll see in our Market Barometer, sentiment has turned bearish. However, there are still plenty of advisors who believe these market declines will be temporary, including our contributor, John Bollinger of Capital Growth Letter, who said yesterday, “Despite the rampancy of bearish opinion these days, I do not believe that we are in or entering a bear market. Rather the evidence suggests that we are in a correction and that the proper course of action is to be assembling a list of stocks that you want to buy when we get an ‘All clear!’ signal.”
I agree, and as I mention in Wall Street’s Best Investments this month, the key to success in this kind of market is targeted “stock-picking.” That means relying on the folks who have seen many market ups and downs—those investment professionals who have not only survived but prospered with their excellent skills and expertise through years of good and bad markets.
I’m talking about our contributors, of course. And as you’ll see from our winning Top Picks of 2015, not only did these pros beat the market, they trounced it! Certainly, not every Top Pick was a winner, but the majority of them beat the markets, and those at the top provided subscribers with double-digit returns. Our Top 2015 Pick was Five Prime (FPRX), submitted by John McCamant of Medical Technology Stock Letter, which ended the year with a gain of 60.54%.
Market swings will most likely be with us awhile. And while sentiment is more bearish, I believe that it will be temporary. In the meantime, it’s important not to panic and sell your great long-term positions. But it’s also prudent to pare those ‘iffy’ stocks from your portfolio. And it’s a fabulous opportunity to load up on stocks with excellent potential that are now trading at very discounted levels. And this month, our 2016 Top Picks issue provides you with a wide variety of companies to consider.
First up, our contributors took a thorough look at Value stocks—the most heavily discounted issues—and recommend an infrastructure, a satellite communication and a biotech company. Growth is still very much on their minds, too, and we received picks from the telecom and rail industry suppliers.
We haven’t seen too many recommendations from the resource industry lately, but our advisors feel that the fortunes of copper, gold and uranium may change this year, as reflected in their ideas for 2016.
By far, the majority of our Top Pick selections came from the tech, biotech and healthcare sectors. In Technology, you’ll find recommendations from the semiconductor, electronic payments, computer hardware, video gaming, data, and Internet arenas. In Healthcare and Biotech, our contributors are enthusiastic about medical devices and pharmaceuticals that specialize in particular diseases, such as diabetes, cancer, pulmonary and macular degeneration.
As rates rise, Financial stocks look appealing, and we offer picks in the banking, brokerage and options exchange sectors. Here, we also include a Volatility Index, as well as three leveraged ETFs.
In addition to our Top Picks, our contributors also recommended several Growth companies, in the resources, software, health technology and medical devices.
Lastly, I’d like to take this opportunity to invite you to attend the World Money Show in Orlando in March. The dates are March 3-5, and the show will be held at Disney’s Contemporary Resort. You may register here.
I hope you will plan to attend the event, which showcases many financial services and educational seminars by more than 150 advisors, including our contributors, Chris Temple, Robert Carlson, Marilyn Cohen, Roger Conrad, Elliott Gue, Jeffrey Hirsch, Lawrence McMillan, James Stack, Mike Turner, and Kelley Wright. I will be leading two workshops; I will post the schedule on our website soon, and also include it in next month’s letter.