Beware of Crowded Trades

As 2011 winds down and the financial media become swamped with predictions for the new year, I myself am finishing up research on the best markets with which to score nice risk-adjusted returns in 2012. An important part of the process involves considering the current views of influential analysts and identifying oversubscribed theses that are already becoming crowded. Positions that attract too many adherents too soon generally do not work out well -- especially in their early stages.

One recommendation that's downright universal is going long multinational mega-cap non-financial dividend payers. Given global currency and economic concerns, a preference is also expressed for those that are U.S.-domiciled. In terms of specific names, think Microsoft (MSFT), Intel (INTC), Johnson & Johnson (JNJ), Procter & Gamble (PG), Exxon-Mobil (XOM) and the like....769 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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