Prepping for 2019 Isn't Just Mitigating Risk -- How to Pick the Best Stocks

Big tech could be better long-term. Pick wisely in retail. Hug consumer staples stalwarts. Be careful with banks.
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Investors have a few options to keep their portfolio's growing in what could be a slow-growth 2019. 


Facebook Inc. (FB) - Get Report is likely a longer-term play, but beware. It could see more volatility, as it will take a while to put data and security issues and regulation concerns to bed. Still, "The core business, though, is still a pretty strong business overall," said JJ Kinahan, chief market strategist at TD Ameritrade.  


"This is one that you're really going to have to evaluate your time frame," Kinahan said. Apple In. (AAPL) - Get Report is discounting some devices, as demand for new models is falling. And Apple won't release its 5G phone until 2020, while Samsung and Verizon will, which Davidson & Co. analyst Tom Forte did say that could indicate Apple wants to wait until it can produce a premium version. There might be some volatility, but "they have a very good management team, their services business has been growing pretty significantly," Kinahan said. Nibbling at shares instead of buying a huge position also helps mitigate risk.


"The consumer has proven to be incredibly healthy," Kinahan said. While some expect consumer spending to slow down in 2019, some still think the consumer has some more life left for a while longer. But here's the rub: "There is no sector in the market that is more individually name-driven than retail," said Kinahan. "Kohl's (KSS) - Get Report , Walmart (WMT) - Get Report and Target (TGT) - Get Report are really interesting to me," he said, because the differentiation is low, so the names that show strong same-store-sales comparables could be the real winners. 

Consumer Staples 

The defensive plays could be in Procter & Gamble Co. (PG) - Get Report , Coca-Cola Co. (KO) - Get Report and PepsiCo Inc. (PEP) - Get Report . "Those three stocks performed really well during that bad market," Kinahan said. They have "very consistent earnings, very consistent product and very consistent dividends." 


Goldman Sachs Group Inc. (GS) - Get Report is down 25% this year. Citigroup Inc. (C) - Get Report is down 15% this year. Ultimately, the yield curve will have to steepen. 

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