Facing currency headwinds, international turmoil, and bear markets, investors are experiencing a tough start that may last for the entire year. The stocks you avoid will be paramount to your investing success, and you must avoid these six stocks facing their toughest market since the Great Recession.
2016 has gotten off to an ominous start for investors. The opening trading week was the weakest one to start a year in the history of the market. There have been numerous sources of turmoil that have quickly put most major indices in official “correction” mode to start the New Year. China’s market seems to be getting away from authorities who have ham-handedly tried to arrest stocks’ declines. The proxy war in the Middle East between Saudi Arabia and Iran seems to be escalating by the minute and crude oil is at twelve-year lows.
It definitely feels like it is going to be a stock pickers’ market in 2016 and what an investor avoids putting in their portfolio could be just as important as the selections that do make to that portfolio. There are plenty of areas I think investors would be best advised staying away from as we start into what looks to be a treacherous year for the markets.
I have been and will remain completely out of both the energy and commodity sectors as well as commodity based emerging economies like Brazil and Russia. There are going to be myriad bankruptcies among the energy producers and miners if prices stay at current levels. Until we get some signs that global growth is increasing, the strength of the dollar ebbs, and we get a “washout” to establish a firm bottom in these complexes, it is best to avoid everything contained within.
This includes the major energy stocks like Chevron (NYSE: CVX) and Exxon Mobil (NYSE: XOM) which have attracted a lot of “flight to safety” money from investors who still want to benefit from any sort of rally in the price of crude.
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