'Newsvesting' in 2016

Matt Towery
Wed, 30 Dec 2015 15:29:31 -0800
Opinion

The experts, ranging from the political to the financial, blew 2015 — big-time. The political pundits had the wrong candidates leading the GOP race for president. The Wall Street analysts had the market pegged to rise mightily.

So now we have Donald Trump and Ted Cruz leading the pack in politics and the stock market ending the year flat as a pancake.

And these experts make big bucks to get it wrong!
Updated: Thu Dec 31, 2015

The experts, ranging from the political to the financial, blew 2015 — big-time. The political pundits had the wrong candidates leading the GOP race for president. The Wall Street analysts had the market pegged to rise mightily.

So now we have Donald Trump and Ted Cruz leading the pack in politics and the stock market ending the year flat as a pancake.

And these experts make big bucks to get it wrong!

Saving politics for next week, I'll reiterate here that those who read news and opinion can turn those activities into solid financial investments on their own.

If a person at the start of 2015 had purchased, in equally divided cash amounts, the stocks I highlighted in my new book, "Newsvesting: Use News and Opinion to Grow Your Personal Wealth," they would have enjoyed a much higher (double-digit) percentage increase in the value of their portfolio versus a pitiful return from the Dow or S&P. And most of those winning stocks would have paid a dividend, to boot.

In my instance I used the full method described in "Newsvesting" and saw a performance that on an annualized basis was quite high, blowing the doors off of Wall Street. Of course, it helped that I monitored the easily found public surveys that I describe in the book.

I shared one such survey with readers in a column last April. It urged them to consider getting out of the market — I did — just before the correction of last August. After taking my profits, I went right back into the market a month later.

Now, in general terms let me talk a little 2016 "Newsvesting."

In the book I explain how I chose stocks such as large defense contractors and manufacturers. By following news stories that emerged from the time that Egypt's government collapsed and through the rise of ISIS, I saw that it was clear that every nation was arming itself to the teeth. While defense stocks weren't cool on Wall Street, they were to Newsvestors, who saw many of those stocks rise in value by double-digit percentages. And again, most paid dividends as well.

And for me those defense stocks are still worth owning in 2016. Iran just allegedly tested another missile, much to the shock of the naive White House and Secretary of State John Kerry. The new arms race will continue, and defense stocks are a great long-term purchase.

Where else might one invest in a year when even the so-called "expert analysts" say we should expect little positive from the market? Well for starters, take solace in their pessimism. They were so wrong about 2015 that chances are they will miss opportunities in 2016!

For instance, oil is a complex issue. I bought and sold numerous strong oil-related stocks as they fell and then rose again throughout 2015. But I've been a buyer as of late, and I plan to add in bits and pieces should prices continue to fall. The companies I purchase have decent dividends that may well be cut if the glut of oil continues for another year. But at some point in future years, oil prices will rise and so, too, will the value of the stronger oil-related companies.

Another strong sector is technology. Make no mistake, the Facebooks and Googles of this world are the future of our economy and our financial markets. They are years ahead in innovation. Even if they encounter setbacks, they will return. They are here to stay.

Also in the coming year I'll be putting more money into purchasing shares of companies that benefit from sales to an aging population. The baby boomers are bringing a huge wave of seniors into the marketplace: people who are seeking health- and lifestyle-related goods and services.

And based on the surveys and polls I monitor, I see no indication that we will experience some major correction or decline in the markets, at least for the first months of '16.

Make your own choices as to when and where to invest. I'm not an expert, and I'm not licensed to broker a dog, much less securities. However, I am a very satisfied Newsvestor. Get the book "Newsvesting." Learn the process, and join me in 2016 as I share ways to use this presidential election year to earn profits in the markets. Happy New Year!