12 Stocks to Boost Your Nest Egg

Dennis Murray, MA


March 06, 2013

In This Article


Good things come to those who wait.

If you were patient and hung onto your stock mutual funds last year, you were probably rewarded with double-digit increases. The 3 major stock market indexes -- the Dow Jones Industrial Average, the NASDAQ Composite Index, and the S&P 500 Index -- all enjoyed gains in excess of 16% for the 12 months ending February 27, 2013. In fact, the higher the percentage of your portfolio in stocks, the fatter your bottom line probably was at the start of the new year.

Now, perhaps, your good fortune with mutual funds has you thinking of buying some individual stocks. Although that could definitely work in your favor, bear in mind that buying a handful of stocks puts you at greater risk than owning a mutual fund, which spreads your risk over dozens -- in many cases, hundreds -- of companies.

Nevertheless, owning some individual stocks might be especially rewarding in 2013. "We're optimistic about the prospects for stocks in 2013," says John Buckingham, chief investment officer at Al Frank Asset Management in Aliso Viejo, California. "That doesn't mean we expect smooth sailing, especially given the perpetual drama in Washington, but increases of 10%-12% certainly wouldn't be a surprise."

The Time Is Ripe to Return to Individual Stocks

Maybe you've already had some success owning individual stocks, or you're new to the game and want to dip your toe in the water. There's no hard-and-fast rule on how many companies you need to buy, but you definitely don't want a handful of individual stocks to make up the bulk of your portfolio if you already have a nice mix of investments.

Let's assume you'd like to buy a dozen or so well-chosen stocks. But with thousands to select from, the task isn't easy. You could scour the Internet all day searching for companies with great prospects, or you could sit back with a fresh cup of coffee and read the rest of this article. We asked experts with successful long-term records in the investment business to recommend 12 stocks that could do very well over the next 3-5 years -- and the reasons why.*

On top of their expected price increases, many of these stocks pay strong dividends, which essentially means that you're earning money while you wait for them to appreciate in value.

*The prices quoted, with the exception of the target price, are through February 27, 2013.