Stick With the Winners in 2014by
Stay with what's working -- now more than ever. The top 50 performing stocks of 2013 are still winning this year.
Looking at three of last year's top ten performers, they're generating significant returns for investors once again.
Chart guru Chris Verrone of Strategas Research shared this perspective with viewers on Surveillance earlier today. It bears repeating. While calendars have a way of causing us to rethink our assumptions and rebalance our portfolios, sometimes doing nothing is an investors' best alternative. Put another way, let your winners run.
The lesson may prove especially valuable in 2014, since mid-term election years since 1950 have typically produced returns only late in the fourth quarter.
So in a year when history suggests broad momentum will prove elusive, focusing on a basket of individual momentum stocks may generate superior returns. Yes, we can buy the top 50 winners of 2013 (enriching our broker in the process). We can also buy many of them in a single new fund created by iShares. It's aptly called the iShares MCSI USA Momentum Index Fund, with an equally appropriate ticker MTUM . It holds 125 stocks and rebalances semi-annually. The 0.15 percent management fee is especially low, and so far this year it's performing exactly as expected -- well ahead of the market.