Year End Review

Market Beating Stocks: 2009 Performance Was Truly Exceptional

What a difference a year makes! Market performance in 2009 was second best in the decade with the broad market turning in a 23% return. That is a big improvement over a 2008 market performance that lost -38%. This past year, we saw a strong stock market recovery, a sigh of relief over the panic that swept through in 2008. While the stock market has shown the beginnings of a strong recovery, the economy on the other hand, continues to lag. Yes the recession is over and the economy is beginning to stabilize, but growth has been anemic and may remain so for some time. As for our portfolio performance, 2009 was truly exceptional. Our Retirement portfolio led all portfolios with a whopping 61% gain for the year. The Aggressive portfolio also had a big year with a 43% return, increasing its cumulative return since inception to 400% in just three short years. Our Growth portfolio also had a good year increasing its cumulative return since inception to 29% versus a -21% loss on the S&P Index over that same time period. These are truly exceptional returns, particularly in light of the 2008 market declines that we all suffered, which for many of us were the worst ever experienced. Just eeking out positive gains would have been a major accomplishment for investors over this time period. However, our strategy has delivery exceptional results, and we know we can beat the market returns in both good and bad times. We look forward to the New Year and remain confident that our strategy will again deliver market beating results in 2010. But what results do we expect for the New Year? It is anybody’s guess, but we suspect 2010 will end with a modest positive return, but the advance will likely not be as strong as what we saw in 2009. The stock market will need to take a breather after the latest 9 month run in 2009. The stock market will need time for the economy to show more strength and growth. We suspect 2010 will be very similar to the 2004 stock market, which also happened to be the second year following the end of a major bear market. However, while we think the market will end the New Year with a modest return, we also would expect a bumpy ride with market pullbacks possible of 10% or more.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services) on our watch list and this week added Continucare (CNU, Healthcare Facilities). Continucare provides primary care physician services through a network of 18 medical centers. Their stock price momentum has been through the roof, particularly over the past month. That adds risk to purchasing right now as profit taking could put undue selling pressure on the stock price. However, if the stock price can consolidate and hold current levels over the next few weeks, that could signal an excellent time to buy. We also had HealthSpring and Nash Finch on our watch list, but have since removed as we purchased both stocks last week. As for our portfolios, we expect to become fully invested early next year, assuming the market continues to advance or hold current levels. We sold a number of positions last week to take advantage of tax rules as the year came to an end. Now that we are in the New Tax Year, we plan to sell stocks where we have positive gains but that have been underperforming relative to the market. This housecleaning will provide opportunity to find and buy new investments that are showing greater demand and interest. Overall, we think 2010 will be a positive year, but the stock market will likely remain bumpy particularly over the first six months. One of our 2010 goals will be to demonstrate patience when buying, that is, resist the urge to chase stocks and to instead buy on dips, market pullbacks, and consolidation periods. All in all, we think there will be plenty of opportunity to make money in stocks and options in the New Year!

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com