SoCal’s top five stocks for 2011
Last year turned out to be terrific for stock investors and it followed an even stronger 2009. And, my last year’s SoCal Top 5 (Edison International, Mercury General, Northrop Grumman, Public Storage and Sempra Energy), did not disappoint. On average, all five holdings provided healthy profits for investors, including dividends. That was not a difficult task because most stocks were positive for the year. I think this year will prove much more challenging. The market has been on a torrid pace, and valuations are no longer very compelling. In my humble opinion, we are already significantly overvalued and the result could be a fairly sizeable correction at some point this year. So, this year’s picks are a mixed bag. Some are conservative holdings whose fortunes are not tied too closely to economic activity and some are indeed reliant on a strong economy to boost earnings but not extended in price. In short, I am hedging my bets. In addition, given the run we have had in stocks since the low in 2009, I think it makes sense for all investors to consider holding extra cash reserves right now. The following selections should be considered as candidates to add to an existing portfolio…
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