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Four Humble Financial Market Predictions for 2013

3. Restaurant stocks will struggle. I've been a restaurant bull for much of the past four years but am concerned about the sector in 2013. Rising commodity costs -- if you buy that presumption -- will force margins lower and/or increase menu prices to consumers. The question is whether consumers will be willing to pay up. They'll still eat out -- that's what Americans do -- but perhaps not as much. The specter of the full implementation of the "Affordable" Care Act in 2014 may also weigh heavily, although some companies, such as Darden Restaurants (DRI), are finding ways to limit coverage by moving more workers to part-time status.

4. Farmland, timber, water, other tangible assets should do well. I continue to like agriculture, and have exposure through some small names such as Alico (ALCO) and Limoneira (LMNR). I closed out of a position in Argentine farming name Cresud (CRESY) but will be looking for a new entry point.

Timber has been an excellent asset class over the years, with a low correlations to stocks; investors can get exposure through Plum Creek Timber (PCL), Rayonier (RYN) and Weyerhauser (WT). Or, for broader exposure, there's the iShares S&P Global Timber & Forestry Index ETF (WOOD). For a combination land/water/agriculture play there's PICO Holdings (PICO), which has been disappointing in recent years, but owns an interesting array of assets.

That's it. Just four broad calls for 2013.

I'll revisit these periodically and will likely take some lumps.

At the time of publication, Heller was long ALCO, LMNR and PICO.
Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.
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