Commissioned News Story (Source: Agora Financial)
Everybody wants to know the secret to picking the hottest stocks. Believe it or not, it takes some research to figure it out. Otherwise everybody would be rich.
When it comes to this year's hottest stocks, Go Pro and Keurig Coffee are among the biggest winners so far.
Agora Financial has been informing investors for over 25 years and has been ahead of the curve with some of the biggest financial events in recent history, including reporting on the housing crisis 4 years before it happened.
They seem like a good place to start when it comes to said research. Agora Financial Editor Chris Mayer shared some thoughts about the hottest stocks of the year and how investors can get more bang for their buck.
Asked about strategies investors can use to pick winning stocks, Mayer said, "Buy cheap stocks (those with low price to book ratios, low price earnings ratios or high dividend yields). Buy stocks with momentum (breaking out to new highs). Buy spinoffs (which consistently outperform the market). Buy stocks that pay rising dividends. Buy stocks that insiders are buying."
On common traits of well- performing stocks, he added, "They have the ability to invest in their business and earn high returns over time. They have a competitive advantage of some sort. They have the ability to grow at above average rates. They do smart things with excess cash (pay dividends, buy back stock)."
Asked about his favorite stocks of 2014 so far, Mayer offered, "Insurance stocks (we closed out United Insurance for a 151% gain this year). Select property stocks. We’re up 277% on Howard Hughes Corp, for example. Little banks (we closed out Viewpoint Financial for a 123% gain."
Mayer drove home the point about the importance of doing your homework before investing.
"You would never buy a car or an expensive appliance without doing a little work ahead of time to learn about the product," he noted. "Why? Because you don’t want to waste your money. Same thing in stocks. You do the work so you have a happy outcome. If you don’t do the work, it’s like playing poker without looking at the cards. Your outcomes are completely random."
Mayer considers Agora Financial a great investor resource because of its independence, which he says is "very rare and hard to find," as well as its breadth and track record.
"We are beholden only to our subscribers," he says. "We do not take money from any of the companies we cover. We have no investment banking services to sell. We have no advertisers to please. So our writers write what they think and research what they like."
He also cited competitive pricing.
"Our editors have widely varying experiences and expertise that would hard for the individual investor to find elsewhere," he said, adding, "Agora editors have been ahead of many of the biggest turning points of the market in recent years (including the tech bubble and housing bubble)."
When figuring out where to invest your money, it helps to have a reputable source to gain insights from.
Of course educating yourself on stocks is only one part of the equation. It also helps to review your finances and have a plan.