A snapshot of the year's winners and losers can show you where it's time to take profits as well as where to look for new opportunities. We've put together a detailed look at which sectors were the best and worst in terms of return, price/earning ratios, and dividend yields.
best stocks 2013
- Best Stock Sectors of 2013
- Best Stocks to Buy Now: A Weekly Round-up from Money Morning
- Stocks to Buy in 2013 Using the "Best Six Months Strategy'
It was a rocky week for markets- but if you know the best stocks to buy now, your portfolio is in good shape...
Last week, the Dow lost 2.23%, or 344 points, to finish at 15,081.47, and the Standard & Poor's 500 fell 2.1% to 1,655.38.
It's called the "best six months strategy." Simply put, the markets -- and the Dow Jones Industrial Average in particular -- perform much better in the November-April period than the May-October period.
The May-October slump, in fact, gave rise to the old investing axiom, "sell in May and go away."
But most investors don't realize they can use the consistency of the pattern, and its oscillating nature, as an investing strategy.
"We've found that most of the market's gains are made from November to April, whereas you either go down or are flat from May through October," Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, said in an interview on Breakout.
The historic discrepancy is larger than one might think. Stock Trader's Almanac analyzed the performance of the Dow Jones from 1950 through 2011 and found that the November-April period showed an average increase of 7.5%, compared to a meager 0.4% average gain for the May-October period.
"It's a pretty robust strategy," Hirsch said. "It's worked over the years. It's one of the most consistent things we've seen."
Still, the best-six month strategy is not as easy as simply selling on May 1 and buying on Nov. 1. Investors need to keep an eye on macro events and use technical indicators for the best times to get in and out. In some years, Hirsch said, it's better to re-enter the market in October.