NEW YORK ( TheStreet) -- Back in the spring of 2011, I chose 50 stocks to write about in my book "Best Stocks Now."
At the time they were all the best examples that I could find of my investing style. I am not a pure value investor, nor am I a pure momentum investor; I am both.
I like to combine momentum with reasonable valuations. During my almost 20 years as a professional money manager, I have seen far too many stocks that looked to be grossly undervalued turn into value traps. On the other hand, I have seen numerous high-flying momentum stocks come crashing back to earth because of stratospheric valuations.
I like to combine the best of both of these unique investment styles into a system that I call Best Stocks Now. At any given point in time Best Stocks Now come from all walks of life. Much of it depends on the current economic environment that we find ourselves in. Best Stocks Now also go in and out of favor just like asset classes and market sectors do.
I like to roll with the best asset classes, sectors and stocks in the market as opposed to being spread so thin that I am likely to get mediocre performance from the investment portfolios that I manage. This has been a year that has been all about domestic equities. Even more specifically than that, it has been small- and mid-cap domestic stocks that have been the sweet spot in the market in 2013. In addition to this, medical-related stocks like pharmaceuticals and biotechs have been on fire.
This has been a terrible year for bears. Being short the market or being heavily weighted in cash has been devastating to your portfolio's performance this year. Being in developed international markets or emerging markets has also been a terrible place to be. Gold and the bond market have also been the wrong places to be.
I track 45 different asset classes on a daily basis. The above mentioned trends have been in place for almost one year now. When trends stay put for a while, money can be made as long as those trends stay in place. These current trends will eventually come to an end and new trends will emerge. Going with the flow in my opinion is the way to go. I have stated many times in the past that I am not a believer in asset allocation. I would rather move from bucket to bucket as opposed to spreading my investments around all the various asset classes.