Stocks or ETFs in 2013?
  • Speaker Detail
    • Louis Navellier
        

      Louis Navellier is one of Wall Street’s renowned growth investors. He is the editor of four investing newsletters: Blue Chip Growth, Emerging Growth (formerly known as MPT Review), Quantum Growth, and Global Growth, all of which are published by InvestorPlace Media, LLC. Mr. Navellier’s most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 12 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com, and The Little Book That Makes You Rich. Mr. Navellier is also founder and chairman of Navellier & Associates, Inc.

Released: 2/6/2013
Tickers:PCLN
Given the stock market's powerful start in 2013, Emerging Growth's Louis Navellier has strong ideas on whether stocks or ETFs will be best for the rest of the year.
SPECIALTY: STOCKS

Given the stock market's powerful start in 2013, Emerging Growth's Louis Navellier has strong ideas on whether stocks or ETFs will be best for the rest of the year.

Hello, I’m here with Louis Navellier and we’re talking about the stock market and what’s going to happen in 2013. Hi, Louis, and thanks for joining me.

It’s great to be here.

So I read that you said the stock market is changing character. Now we’ve had a great run this year, so what do you mean by that?

Well, we melted up because we had the strongest inflows in 12 years. That’s the good news.

In 12 years? That’s a lot.

Yes, and some of it was exaggerated because there was a lot of cash flow on the sideline due to the fiscal cliff concerns. And we went over the cliff, but at least the market was closed when we did.

But anytime the market goes up, it’s broad based but then it gets narrow. Earnings are coming out, and this is the second of three quarters where the earnings aren’t too good for the overall market. So they’re all sorting this stuff out now, and we expect the breadth and power of the market will start to decay, and the money’s going to chase fewer and fewer stocks.

So it’s more important for the individual investor then to be very choosy about what sector and stock. It’s not throwing the dart anymore.

Oh, absolutely. So if someone was buying you a broad-based ETF or mutual fund, it’s going to get tougher now, so you better hope the people that structure that ETF or mutual fund are good stock pickers.

Do you think that for a novice individual investor, does it make sense for them to choose individual stocks, or should they play it safe and go with an ETF or a mutual fund?

I really prefer that they do the stock picking versus the ETFs, even though I have that business too. The reason is they really should try to control their own destiny.

We’ve made it very easy for them. We have this service called Portfolio Grader, where we rank stocks A, B, C, D, F, and they can key in stocks to see and if they’re A rated—I definitely would buy them.

The main thing that they have to know is most of their money should go to conservative stocks. We recommend at least 60% in conservative stocks, about 30% moderately aggressive, and 10% aggressive. So as long as they can buy those conservative stocks, especially the ones with the dividend yields, I think they’ll have a much smoother ride and they’ll have a lot more confidence when they invest in the market.

And does your rating system show whether it’s a conservative, moderate, or aggressive stock?

Yes it does, yes it does.

OK, so just because it pays a dividend doesn’t necessarily mean it is conservative either, right?

Correct, correct, and a good example are the mortgage REITs. The mortgage REITs were volatile, but with all this Fed pumping, the volatility has died down immensely here recently.

So what do you think about some of the really high dividend REITs? There are a lot of new REITs coming out again now, and some of them have really tremendously high yields.

It’s pretty simple. What I would do if I was an investor, I would go to Yahoo! Finance, click on the interactive charts, and plot the dividends, and they’ll see what the dividends have been quarter by quarter. If the dividends are going down, that might explain why the stock price is going down.

The dividend yield’s so high, so really once that dividend yield gets about 12%, it’s pretty hard to find one that is increasing the dividends...but you can get ones at 7%, 8% that are doing good.

The other thing people have to realize with all these limited partnership REITs, they have to give you 90% of their money. It’s a pass through...but if it’s tied to the price of natural gas, then guess what, you’ll be on a roller coaster. Oil, you’ll be on a roller coaster. I like pipelines because they’re just getting paid on the volume, and we have a shortage of pipelines in America.

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 • August 15 – 17, 2013
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