My Thoughts on This: I guess it’s time to start thinking again. The heavy part of the holidays are over and pressure is building for us to confront the new year.

I’m not sure why I’m sharing this with you because I’va also been reading posts by people in the know who made predictions last year who now are trying to explain why they were mostly wrong. I guess we just have a huge appetite for pain. Enjoy…

By Joyce Hanson, AdvisorOne

Stocks, not bonds, will likely feature as the best investment picks for 2013.

Over the course of the fourth quarter of 2012, AdvisorOne kept an eye out for where investors should put their money next year, and one thing is clear: Investors seeking yield–isn’t everybody nowadays?–will find more joy in equities than in fixed income, according to Wall Street’s top financial analysts.

“As we begin to observe evidence that policy is successfully stimulating growth, we expect to see the initial stages of the ‘Great Rotation’ from bonds into stocks later in 2013,” says the Bank of America Merrill Lynch Global Research team in a comment published on Dec. 11.

Both BofA-Merrill and S&P Capital IQ predict that the S&P 500 Index will hit the 1,600 mark in 2013.
Where are the best stocks to be found? The Consumer Discretionary and Consumer Staples sectors offer access to the growing middle classes in emerging markets. The Health Care sector also looks to be strong for 2013, and should see gains now that President Barack Obama’s Affordable Care Act is a reality. For investors who want equity exposure without buying individual stocks, mutual funds and exchange traded funds can also lead to yields in these sectors.

“Next year, we think it’s all about the consumer,” says Brian Peery, co-portfolio manager of the Hennessy Cornerstone Mid Cap 30 institutional fund (HIMDX). “The housing market is rebounding in a low to moderate growth environment. We expect GDP growth of approximately 2%.”

The trouble, notes Peery’s colleague Neil Hennessy, is that consumers may be buying goods at Pier 1, but they’re not investing in Pier 1 stock. “Retail investors will get back into the market when interest rates go up,” he says.
Judging from the best five investment picks for 2013 below, uncertain investors might want to take the plunge into stocks before that happens.