2014 Focus: Europe, Emerging Markets And Dividend Stocks

In 2014, you will see a handful of consistent themes across Sizemore Capital portfolios: 1. I am overweight Europe and emerging markets. 2. I am overweight dividend-paying U.S. equities. 3. I am underweight non-dividend-paying U.S. equities. While I remain broadly bullish on U.S. equities in general, in my view they no longer offer compelling value. After five years of nearly uninterrupted bull market, the easy money has long since already been made. I expect U.S. investors to return to a focus on quality, which should favor dividend payers over non-dividend payers.

Finally, now that tapering has finally begun, I expect investors to reevaluate income securities. Dividend paying stocks and, particularly, “bond substitutes” such as REITs were dumped indiscriminately in 2013 as investors, terrified of what tapering might mean, sold first and asked questions later. I have no way of knowing for sure, but assuming that inflation remains near generational lows and Fed tapering will be a slow process, I expect yield-focused investments to enjoy a healthy rally in the first half of 2014.

Source: FOX Business

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