My Favorite Trades for 2013

Focus: STOCKS

Keith Fitz-Gerald Image Keith Fitz-Gerald Editor, High Velocity Profits and Total Wealth

Keith Fitz-Gerald of Money Morning shares his favorites and not-so-favorite plays to watch this year.

Nancy Zambell: Right now the market, as you know, is floating around 14,000. What do you think is going to be the next big thing?

Keith Fitz-Gerald: Nancy, it's very interesting to see the market run like it is, given the underlying fundamental situation in our economy right now. We still have debt problems. We still have just squeaked by the fiscal cliff. Congress is a wreck.

There is no adult supervision in Washington, so there are plenty of reasons to be concerned. I think that whenever the markets get toppish and long in the tooth like they are today, you want to make a conscious shift as an investor, from what the world wants to what the world needs. The reason to do that is twofold:

  • No. 1, I think that you want to build an upside because if the markets continue to run, you want to grab a piece of that.
  • But, at the same time, you want to begin very consciously building in defensive positions, on the assumption that something could reverse unexpectedly.

And the market is overdue for a correction. If we get one, changing to what the world needs versus what it wants, gives you a defensible position.

One of my favorites right now, for example, is in the energy sector. That's clearly something the world needs. The world's growth is continuing in every industry. So never mind the headlines, the fact of the matter is oil is in demand.

Nancy Zambell: Especially in the emerging countries, right?

Keith Fitz-Gerald: Absolutely.