The Dow logged its second-biggest one-day gain (322 points) of the year on Thursday and added another 111 points Friday, in spite of Washington's woes.
But don't be fooled - other markets, such as bonds and derivatives, have been bracing for a default. Smart investors can't afford to be complacent.
Thankfully, Money Morning provides key moves to make amid mounting uncertainties. Here's a recap of last week's best stocks to buy:
- The biggest question flooding the Money Morning inbox involves how to invest before the QE taper. Our response was especially timely, as it followed the release of the minutes from the Fed's last policy meeting and the nomination of Janet Yellen as Fed Chairman Ben Bernanke's successor. Money Morning Chief Investment Strategist Keith Fitz-Gerald discussed with CNBC World News what Yellen will be like as the next Fed chief. We also highlighted some need-to-know Yellen facts.
- Fitz-Gerald says one of the most frequently asked questions he hears is "What's the simplest strategy to boost my returns?" In short, the answer is "rebalancing." Rebalancing is the periodic adjustment of an investment portfolio to coincide with changing market conditions. This maneuver can be done easily by any investor, and it should be done regularly. Fitz-Gerald explains it all and more in One 10-Minute Trick That Beat the Market by 248%.
- Warren Buffett typically steers clear of the technology sector, preferring instead companies that trade close to or even below "breakup value." But some name-brand tech firms have sufficient cash reserves to offset a decent portion of their share price. In If Buffet Liked Tech, Here's What He'd Buy, Money Morning Defense & Tech Specialist Michael Robinson lists three "Cash is King" tech firms that offer investors a nice margin of safety - and a chance at big gains.
- Technological advancements have undoubtedly made our lives easier. But this has come at a price. Accelerating workplace automation has resulted in scores of jobs falling away to cheaper, more efficient technologies. And it's not just blue collar jobs at risk. In recent years, doctors, lawyers, securities traders, and journalists have all seen some of their work replaced by machines, an alteration dubbed "disruptive technologies." Money Morning explains how to maximize returns from this growing trend here.
- We make sure Money Morning readers never miss a thing when it comes to new trends in natural gas and the explosive shale industry. Last week we announced that the shale revolution is going global and detailed How to Invest in the Global Shale Oil and Gas Boom. We also shared the best stocks to buy for getting in on the natural gas industry's second massive profit wave, including several midstream companies and master limited partnerships. Global Energy Strategist Dr. Kent Moors also shared the new demand source that's bringing major change - and profits - to natural gas investing. We capped the week with How to Invest in the World's Biggest Shale Oil Field.
- Subscribers to Executive Editor William Patalon III's daily Private Briefing learned last week how "big wave" trends can translate into big profits for high-tech investors. The global market for cloud computing is expected to grow from $40.7 billion in 2011 to more than $241 billion in 2020 - a 485% gain. And Software as a Service is one of the fastest-growing segments of the cloud sector. In Get Ready for a Fist-Pumping Ride, Bill Patalon discusses one tech firm whose cloud-based offerings are experiencing "scorching growth." When the firm's Q3 earnings are released on Oct. 31, he predicts that this firm will embark on a "breakthrough ride" - but investors would be smart to catch this wave now.
- Finally, in the category of stocks to avoid, Fitz-Gerald offered his assessment of the much-ballyhooed Twitter stock IPO. Following the Oct. 3 announcement that the company will go public, investors became privy to a deluge of information about the social messaging service. Financials were mixed at best: Ad rates are falling, user count is slowing, and many businesses say Twitter's reach is too small. Fitz-Gerald told Fox Business News in an interview that he is skeptical about Twitter's IPO. He went on to explain in a later piece that Twitter Inc. "may make a fine trading instrument," but as an investment, Fitz-Gerald says you can #countmeout.
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