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Hope for More Positive Days

While I don’t expect that we have yet hit bottom, the advent of investors coming back into the market—looking for bargains—certainly gives hope for more positive days in our near future.

After weeks of markets rocking and rolling, we’ve actually had two consecutive days of rallies. While I don’t expect that we have yet hit bottom, the advent of investors coming back into the market—looking for bargains—certainly gives hope for more positive days in our near future.

While the Fed’s rate increase seems to have had the opposite effect on markets that Yellen expected, the overall economy—still sluggish—is holding its own. Unemployment continues to improve, retail sales are steady, and folks are still borrowing money to buy homes.

Sentiment has turned more bearish, as you’ll see in our Market Views this month. But as you know, sentiment can be a good contra indicator. As Warren Buffett always says, “Buy when there’s blood in the streets,” so astute investors should continue to seek out great companies that are now trading at bargain levels.

But as I advised my Wall Street’s Best Dividend Stocks’ subscribers in last week’s letter, these types of volatile markets call for stock-picking expertise—judicious selection of investments through both fundamental and technical analysis. Expertise that doesn’t come overnight, but fortunately, is a common trait among the contributors to Wall Street’s Best Investments, who have honed their skills through good and bad market and economic cycles. Certainly, they aren’t perfect, but their long track records of gains stand up to careful scrutiny.

And I find it interesting to review how their analyses and forecasts change as markets drift into new cycles. For instance, in this issue, you’ll find that contributors are staying mostly conservative—recommending a host of beaten down, undervalued companies, stocks that pay dividends and defensive sectors, like commodities. That tells me that they are closely watching the economy, making sure that investors look for safety, consistent cash payouts and hedges against a slow-recovering economy.

That doesn’t mean they have ignored faster-growing companies, but you’ll see that the growth companies aren’t the ‘hot’ issues often seen in more robust markets, but are businesses that have excellent track records of consistent growth with fundamental strength—rising sales and earnings, and reasonable debt. The companies that historically pay off investors by steadily increasing stock prices.

Our Spotlight Stock certainly fits that bill. Although small-cap (and please make special note of my caveat regarding small-cap stocks in my Feature), this company is making its mark in an extremely fragmented industry by organic growth as well as acquisitions. It’s consolidated its market niche so well that analysts now consider it to be a target of much larger competitors—a potential money-making opportunity for investors who get in now. My Feature further explores the M&A nature of our Spotlight Stock’s industry.

We then move onto Financials, a group that was touted as ‘attractive as rates rise’ by many gurus. That hasn’t yet become a reality, but these stocks offer interesting entry points, and three of the four offer opportunities to buy financial stocks that may not be familiar names to you, yet have the essential characteristics necessary for gains.

Our Growth recommendations include a staffing firm, a chemical company, a gold miner and a food producer—all sectors that are seeing rising demand, revenues and earnings.

Value Stocks comprise our largest section this month, and here you’ll find selections from the real estate services, automotive retail, restaurant, agriculture and resources industries—again, companies with fundamental strength but discounted prices.

Investors interested in companies with a bit more speculation, but also the opportunity for higher gains will find a variety of Healthcare and Biotech companies to target. In this vein, we also offer a cutting-edge semiconductor tool stock and a tech consulting firm, for your review. And for investors seeking those “10-bagger” opportunities, our Low-Priced Stocks offer a couple of industrial businesses seeing rising demand from construction projects and a small electronic payments company growing at a rapid pace.

And the Energy sector departs from the traditional oil/gas/electric stocks, and instead, is represented this month by a land trust, a solar company and a nuclear power plant builder. Our Funds and ETFs are similarly diversified, with growth, value, small cap, energy and biotech options.

Lastly, I hope to see you at the World Money Show in Orlando, coming up in just a couple of weeks. The show will be held March 3-5 at Disney’s Contemporary Resort. Here’s my schedule:

Friday, Mar 4, 2016
8:00 AM–8:45 AM: How to Structure Your Portfolio through the Ages
1:30 PM–2:15 PM: Make Dividends Count!

You may register here.

Nancy Zambell has spent 30 years educating and helping individual investors navigate the minefields of the financial industry. She has created and/or written numerous investment publications, including UnDiscovered Stocks, UnTapped Opportunities, and Nancy Zambell’s Buried Treasures under $10. Nancy has worked with MoneyShow.com for many years as an editor and interviewer for their on-site video studios.