Monday, January 4, 2010

Thoughts for the New Year – Find Dividend Plays and Sectors with Potential

The past year of 2009 has been a rather intriguing year within the investment world. Most investors began with a solid loss to their portfolios and then worked back to near even. Others may have not been so fortunate. So, where does one look as a new year of possibility begins? This is an interesting question to be sure, but one that can find ideas depending on a particular investor’s needs and wants.

Starting long-term, always remember life insurance and its tax ramifications. Also consider the Roth IRA. From a stock perspective, there are many ways to think. Most in the “know” are suggesting “tech” as a play to make. Others suggest basic materials. This is a quandary to be sure. What is a universal statement from those in the supposed know is investing in something you like and enjoy, while also understanding. This is a very important part of the equation.

Some investors like coins, while others like minerals. Some like large cap companies while others like to follow start-ups. There is a very large spectrum to consider and none is any more valued than any other. The idea is to understand the area one is interested in and follow it while enjoying it. This may not lead to a win and a profit on all investments, but it will offer choices as the sector, commodity or company grows or falls. The trick is to not stop looking. At the moment, “Big Pharma, basic materials and, in the not too distant future, energy stocks look to be solid. One must also consider looking at allied areas or sectors that may be becoming more noticed. In this respect, underground mining equipment for instance.

Also remember that holding a dividend strategy which is safe, stable and liquid is also a part of a stable portfolio. IBM, AT&T, Microsoft and Apple come to mind in this respect as one gets older. Also remember bonds and treasuries, with the idea that the government has quite a bit of debt. In the new year, balance will be the option to consider. Find a sector you understand and like, balance it with some safety plays and maybe sprinkle in a few smaller ideas within the small-cap market.

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