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Best and worst investment ideas for 2014

Best and worst investment ideas for 2014
Best and worst investment ideas for 2014 © dominic8/Shutterstock.com

As the year winds down, it's natural to take stock of which investments were leaders and which were laggards in 2013.

It's also timely to look ahead at 2014 and try to discern what will be the best and worst investment ideas then.

This year, U.S. stocks have certainly been a winner, boosted by the Federal Reserve's quantitative easing program. The Standard & Poor's 500 index generated a total return of 26.4 percent through Nov. 4, according to Morningstar.

Meanwhile, commodities have been a loser amid sluggish global economic growth. The Dow Jones-UBS Commodity Index lost 7.8 percent through Oct. 22, according to Morningstar.

As for next year, some investment experts are bullish on stocks, bonds, bank-loan funds and reversion-to-mean investments. And some experts are bearish on commodities, bonds (yes, this asset class has both optimists and pessimists) and stocks that have soared in 2013.

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Stocks have been a winning investment in 2013, while commodities have done poorly. What are the good bets for the new year?

Experts say U.S. and European stocks should continue to do well as long as the global economy keeps growing. Independent financial adviser Mick Heyman in San Diego is particularly bullish on industrial stocks, because he says manufacturing should continue to pick up.

Retired hedge fund manager Chris Litchfield says bonds should have another good year because he does not expect the Fed to "taper" its monthly bond purchases. Those have helped push interest rates down and bond prices up.

Others in the know about attractive investments point to bank-loan funds: mutual funds and exchange-traded funds that contain loans made by banks to highly leveraged companies. The funds generally have appealing yields and payout rates that rise along with interest rates.

 

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