Tuesday, 13 December 2011

How to Find the Best Stocks to buy in 2012

The stock market is a vibrant place which is easily affected by various external factors such as, the overall global economic situation, and especially by the country’s economic standing. Even a remark by its spokesperson can affect this volatile market. As such when you plan to look for the best stocks to buy in 2012, it is important to evolve an investment strategy right now. Last year witnessed great upheaval in the market and the road ahead to 2012 is also likely to be rocky for stocks and bonds. You will need a new strategy and the right funds to be able to steer your way through the rough period ahead.

For an average investor, the best strategy will be to find the best stocks to buy in 2012, for which, it will be necessary to research all types of investment news and stock ratings. The focus should be on bond funds and stock funds, but the best bond funds should be more defensive and the best stock funds should be more conservative and able to generate income.

Since Europe and the U.S. are going through a difficult period being burdened by the sovereign debt and with hardly any economic growth, the only way to go forward will be to adopt defense as your weapon while looking for the best stocks to buy in 2012. If you can avoid being hit hard by losses now and till the end of 2012, you might be able to reap a good harvest when the storm dies down.

As far as the bond fund investment strategy is concerned, the best stocks to buy in 2012 will be to hold on to shorter-term high quality corporate bond funds instead of long-term funds because if the interest rates start increasing, the value of long-term bonds will slump. Moreover, corporate bond issues yield higher interest than U.S. Treasury notes and bonds and because the corporate world in the U.S. is in a much better condition than the U.S. government.

In the case of stocks, the best stocks to buy in 2012 will be equity income large-cap funds because they are invested in major corporations that have been known to pay above-average dividend yields. It is also necessary to avoid or sell equity stock funds that have high investment in growth and/or small company stocks.

Any reliable investment news will also advise you that in your list of best stocks to buy in 2012, you should not include gold, gold stocks and gold funds since gold’s price has escalated to a great extent and has become more of a speculation than a hedge against inflation or disaster. An insured account in your local bank will be a much better investment.

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