CHICAGO, Nov. 15, 2012 /PRNewswire/ -- Stocks in this week's article include: The Blackstone Group LP (NYSE: BX), Camden Property Trust (NYSE: CPT), Euronet Worldwide Inc. (NASDAQ: EEFT), Hormel Foods Corp. (NYSE: HRL) and Resources Connection Inc. (NASDAQ: RECN). Kevin Matras explains why the market could come under continued pressure for the rest of the year, and how to pick the best stocks now to thwart this.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
Nobody knows for sure what will happen regarding the Fiscal Cliff. But, this is why many top advisors are telling their wealthiest customers to lock in their gains now to take advantage of what could be the lowest capital gains tax rates they'll see for the rest of their life.
I believe this is all short-term in nature however. Because if a deal is made on the Fiscal Cliff, higher investment taxes notwithstanding, the economy will stay the course and the market should ultimately go back up, which means all of that money should find its way back into the market, as the US will still be considered the best game in town.
But for now, I believe the market will come under pressure throughout the rest of the year as investors race to benefit from the low tax rates that might soon expire and go up.
So where will some of that money go (it's unlikely to just sit in 'cash') and where should new investment dollars go while this tax strategy induced selling runs its course?
I believe the stocks with the largest gains over the last 1-3 years are prime candidates to see the greatest amount of tax related selling.
On the flip-side, the ones with smaller gains to lock in should see the least amount of tax induced selling.
Of course, that doesn't mean you should buy the crummiest stocks out there. You still want to make sure the odds are in your favor for future gains.
My strategy right now is as follows:
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