Magazines Take Turn Toward Investment Strategy

Who doesn't sometimes wish he or she could go back in time, knowing what is known now, and redo the past? Investors, here's your big chance. The stock market is now back to where it was before the bubble's rise and fall.

We learned a lot of lessons the hard way during the roller-coaster ride of the last five years. Now, older and wiser, we can avoid the mistakes that tripped us up before and get rich this time around, right? Not so fast, says Beverly Goodman, in the June issue of SmartMoney. "Buying when the market is riding high and selling when it's down in the dumps is a loser's game. It's also human nature. That's why you need to develop an investment strategy that you can live with and stick with it through good times and bad," Goodman advises in the magazine's cover story, "Where Do We Go From Here?" The article offers strategies for long-term gains, providing three models portfolios for conservative, moderate and aggressive investors, with asset allocation breakdowns and suggested investments for each.

BusinessWeek offers up some stock ideas of its own in its June 7 issue with a special report on "Hot Growth Companies" — the magazine's annual list of America's fastest-growing small companies. Alumni of the Hot Growth list include Cisco Systems, Electronic Arts, Black Entertainment Television, Papa John's International and eBay.

"The ability to find — and then exploit — a sweet spot in the economy is still the common denominator on the list," the magazine states in the cover story, "The 100 Best Small Companies".

The top company, PetMed Express, broke new ground by selling pet medications via e-mail, phone or fax. Though veterinarians are unhappy with losing this profitable business, the company has become the country's largest pet pharmacy. Others have profited from the tough job market. Number two on the list is Universal Technical Institute, which trains automotive technicians. The number three slot goes to University of Phoenix Online.

But the magazine's hot growth companies aren't guaranteed winners. Each year, BusinessWeek takes a second look at the Hot Growth list from two years before. In "Hot Growth Alumni: Many Happy Returns For The Class of 2002", the magazine recalls that the biggest loser of the past two years was the company that ranked number one in 2002 — The Singing Machine Co., a maker of home karaoke equipment, whose shares have plunged 92.8 percent in the past two years.

Forbes looks at some offbeat places to invest in its simply named June 7 cover, "The Investment Guide". In "Investing Like Warren Buffet", writer Michael Maiello profiles three stock pickers trying to beat the master at his own game. In "When Patience Pays", John Buckingham explains his get-rich-slowly approach to investing of buying beaten-down stocks that pay dividends.

Hotel condos are all the rage, writes Carrie Coolidge in "Condos With Room Service". Five-star amenities like a concierge and room service are attracting homebuyers who hope to bank on brand names like Ritz-Carlton and the Four Seasons when they sell the place. "Hotel condos are generally around 25 percent more expensive than comparable non-hotel units, despite the fact that their conveniences, like concierges, routine maintenance and access to the gym, also raise the monthly maintenance charges. "

If investors ever thought about buying a racehorse, the recent failed Triple Crown bid of Smarty Jones may have prompted them to reconsider. Except for those who bet on the long shot, who didn't cringe as they watched Birdstone upset the favorite at the Belmont Stakes in June — knowing that millions had just slipped through the owner's fingers? Still, auction prices for fledgling racehorses are up 40 percent on average and are setting records. Forbes writer Dan Seligman explains the auction process and the difficulties of evaluating the untested 2-year-olds who are sold there in "Inside Track". "Why would smart guys put money into investments that are highly likely to be losers, and why would they bid most feverishly at the top end, where the losses are likely to be the greatest?" Seligman asks. Because while most investors do lose, some collect staggering amounts in purses and stud fees. At the very least, investing in the sport of kings can be an enjoyable way to create a useful tax loss.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism