James Glassman’s 10 Stock Market Picks for 2021

Since 1993, I have offered an annual list of 10 stocks. Nine are culled from the choices of experts I trust, and I include one of my own. For the fifth year in a row, those annual selections beat the S&P 500 index. This kind of streak isn’t supposed to happen, and readers should be warned that there’s no guarantee it will continue. Still, allow me to celebrate a bit. The 2020 results again illustrate the importance of diversification. Four of the 10 stocks fell in value (including one that went bankrupt), but five rose more than 25% each (including two that more than doubled). Overall, my selections returned an average of 28.8% over the past 12 months, compared with 16.3% for the S&P 500. (Prices and returns are as of November 6.)

SEE MORE 14 Hot Upcoming IPOs to Watch For in 2020 and 2021

Once again, Terry Tillman, an analyst with Truist Securities (formerly SunTrust Robinson Humphrey), came through big-time. My annual selections from Tillman’s “buy” recommendations have beaten the S&P now for nine years in a row. His 2020 choice, Okta (symbol OKTA), returned a whopping 115.5%. For 2021, I like his choice of Upland Software (UPLD, $47), based in Austin, Texas, which offers digital tools for companies to manage their customer base. This small-cap stock is risky. Profits are still elusive, but Upland has more than 10,000 customers, and revenues rose in the most recent quarter by 35% over the same period last year.

The other huge winner in 2020 was Nvidia (NVDA), maker of microprocessors for applications such as artificial intelligence and PC gaming. Returning 180.9%, it was a standout in the portfolio of another regular on my list, Jerome Dodson of Parnassus Endeavor (PARWX). Dodson, a value maven, has lately been scooping up shares of another chipmaker, Intel (INTC, $45), which moved in the opposite direction of Nvidia in the past year, falling 18.9%. Intel looks like an unusual tech bargain, with a price-earnings ratio of 10 and a 2.9% dividend yield.

In September, Will Danoff celebrated 30 years managing Fidelity Contrafund (FCNTX). His recent performance has not been spotless. The fund, with $125 billion in assets, has failed to beat its large-company benchmark in two of the past five years. But I

Read more: https://www.kiplinger.com/investing/stocks/stocks-to-buy/601751/my-10-stock-market-picks-for-2021

3 Steps You Can Take Now to Gain Control of Your Retirement

Given the year we’ve experienced, most people are feeling justifiably anxious about protecting their retirement investments.

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Some nervousness is normal at any time, of course, since we can never predict what the markets or the overall economy will do. But there are things investors can do now to gain more control over their finances and prepare for what might come next.

(You can DIY these steps to a degree, but at some point, you may find you need or want to get professional help — to save time, to avoid making expensive mistakes and to be sure you haven’t missed out on any money-making or money-saving strategies.)

1. Determine your risk tolerance and risk exposure

How much risk are you willing — and able — to accept when it comes to future returns? Here are some things to consider:

There’s a difference between emotional risk tolerance and mathematical risk tolerance. Emotional tolerance is the level of loss you can handle without churning with worry at night or making knee-jerk moves that could end up costing you money. Mathematical tolerance is the level of loss your plan can actually afford to take and still have enough money left to provide the income you need. Both are important factors when deciding the appropriate asset allocation for your portfolio.Many people adjust their level of risk based on their “time horizon” — the number of years they expect to grow the money in their portfolio before they retire. Young investors, for example, are generally open to taking on more risk because they know if the market suffers a downturn, they’ll have time to recover from the loss. Older investors typically have a lower risk tolerance, especially if they are about five years away from retirement, or are less than five years into retirement. (I call this period the hazard zone, because it requires extra vigilance.) Soon-to-be retirees who will depend on their investments for income must take into account what an ill-timed downturn could do to their retirement plans.

How a specialist can help: Many investors believe they have a well-diversified portfolio because they see several different mutual funds in their accounts.  Unfortunately, that is not always the case. An adv

Read more: https://www.kiplinger.com/retirement/601820/3-steps-you-can-take-now-to-gain-control-of-your-retirement

Stephanie Link: Expect Above-Average Gains in 2021

Kiplinger’s: What do you see ahead for 2021?

Link: To talk about 2021, you have to put it in the context of 2020. We have to deal with the increase of COVID cases versus progress with vaccines and with testing. The time line is uncertain for the next round of fiscal stimulus, but the fact that we need it is absolutely certain. All of this is against the backdrop of way-better-than-expected corporate earnings. So, companies are dealing with all these uncertainties, but sometimes investors cannot, and this is why you have fluctuations in the market.

SEE MORE Kiplinger’s Economic Outlooks

Where is the economy headed? The economy has been uneven, and that will continue until we get a vaccine—which is why the Pfizer news of a successful trial is so important. Pockets have done well—housing, autos and manufacturing have seen a V-shaped recovery. But there’s a lot of bad: travel, leisure and hospitality, small and medium-size businesses closing every day, 10 million people unemployed. It’s important for the good pieces to pick up the slack until we get another stimulus package. You could potentially see gross domestic product growth of 4% to 5% in 2021.

How will the market adjust to a new president? I think the market likes a Biden win with a split Congress because it’s gridlock—you don’t get many surprises. But research from Capital Group shows that over the past eight decades, in 18 of 19 presidential elections, no matter which party won, a hypothetical $10,000 investment made at the beginning of each election year would have gained in value over the next 10 years, and in 15 of those 10-year periods, it would have more than doubled. I don’t want to say the election is meaningless, but it really is less important than other fundamentals over the long term.

SEE MORE The Best and Worst Presidents (According to the Stock Market)

What would you focus on? I have learned over my career that stocks follow profits, and if profits are going higher, stocks eventually will. Earnings are recovering nicely, which tells me that fiscal and monetary stimulus is doing its job. Next year we could see earnings growth of 30%-plus. Find good companies with high market

Read more: https://www.kiplinger.com/investing/economy/601757/expect-above-average-gains-in-2021

Stock Market Today: Jobs Data Weighs on Stocks, But Nasdaq Hits New High

After vaccine euphoria drove several major indices to all-time highs earlier this week, COVID realities led to a more mixed session heading into the Thanksgiving holiday.

The Labor Department released weekly unemployment data a day early, reporting a second consecutive week of rising filings, to 778,000 last week — a number that remains significantly higher than the pre-pandemic record of just under 700,000 in 1982.

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Barclays Investment Bank analysts think a particular nuance is worthy of note, however.

"We continue to believe declines in claims reflect expiring benefits from the usual state programs, and not necessarily elevated re-hiring," write Barclays' Michael Gapen and Pooja Sriram. "In the post-lockdown period, we have generally drawn signals from continuing claims about the pace of re-hiring and changes in labor market conditions. However, we now believe that a sizable portion of the recent week-to-week decline in continuing claims reflects the expiration of benefits under state programs, which generally last up to 26 weeks."

Meanwhile, the U.S. reported a record number of COVID-related hospitalizations, with 88,080 such cases straining the nation’s healthcare infrastructure and personnel.

The Dow Jones Industrial Average, weighed down by a 5.4% decline in Salesforce.com (CRM) after the Wall Street Journal reported it has been in talks to buy workplace-communications company Slack Technologies (WORK, +37.6%), declined 0.6% to 29,872.

However, gains by the likes of Amazon.com (AMZN, +2.2%) and PayPal (PYPL, +4.1%) helped lead the Nasdaq Composite 0.5% higher to a record-high 12,094.

SEE MORE The Airbnb IPO: Should You Buy ABNB?

Other action in the stock market today:

The S&P 500 closed with a small 0.2% loss to 3,629.The Russell 2000 also fell from all-time highs, declining 0.5% to 1,845. Gold futures, mired in a nasty slump, managed to eke out a 0.1% improvement to finish at $1,805.50 per ounce. U.S. crude oil futures climbed 1.8% to eight-month highs of

Read more: https://www.kiplinger.com/investing/stocks/601817/stock-market-today-112520-jobs-data-weighs-stocks-nasdaq-new-highs

The 10 Best Books for Beginning Investors

The biggest barrier between people who want to invest, and actually investing, isn't money. With funds and apps that let you get started for as little as $1, you can start investing with your pocket change.

No, the biggest barrier for today's beginning investors is simply knowing how to get started.

Unfortunately, you'll be hard-pressed to find investing as part of most educational curricula, so it's up to aspiring investors to create their own course, so to speak. That's actually quite easy given a plethora of engaging investing books available, but the abundance of choices can be a little overwhelming.

We'll help you narrow it down.

Here are 10 of the best books for beginning investors, from quick reads you can knock out in the time it takes you to drink a cup of coffee, to hefty tomes that leave nothing uncovered. And if you want to buy any of these books for yourself or someone in your life who's just getting started, we've included links to purchase pages.

SEE MORE 10 Secrets of the Millionaires Next Door

Read more: https://www.kiplinger.com/investing/601813/best-books-for-beginning-investors

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