List Of Stocks You May Not Want To Buy In 2014

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Image by: dflorian1980
By Michael Sterling

The stock market has always been unforeseeable, but the present economy has made it nearly impossible. There are certain stocks, however, which are sure to be a guaranteed disappointment. With so many things coming into play, experts have given their list of stocks every investor ought to know for their investing future. Here are a select few:

#1) Overvalued Stocks

A lot of the stocks in 2013 have risen so much that they are overvalued, while the ones that have done the best has been the most expensive. Overvalued stocks like Tesla, whose shares increased five times over this year, reported losses. Netflix, whose more than tripled this year, had horrible valuations with a price-earnings ratio of 409, according to Yahoo!.

It’s predicted that the Fed will increase its bond buying in the coming year. When that happens, it’s a bit of a mystery on how high the stocks can go. Often times people make the mistake of buying too many. When momentum takes over, these stocks can do very well, but most of the time, they will do more damage than good – best to buy just a small amount.

#2) Retail Stocks

These kinds of stocks have always been risky since they depend on retailers, who are always at the mercy of the country’s economic state. Next year, now that the economy is getting slightly better, it’s easy to say that these stocks will be seeing a slight increase in profit. It seems sensible, but some experts say not to get too comfortable with the idea. Here are a few to stay away from:

  • J.C. Penney Co. (JCP) – Screened out as the worst performer in 2013, it’s not expected by many to survive the next year. Shares are now under $7 against a 52-week range of $6.24 to $25.78, and declining sales and losses are expected to continue. A possible CEO change may or may not make the company better, but if you ask me, it’s too big a risk to take.
  • Abercrombie & Fitch (ANF) – With a loss of 25% in 2013, Abercrombie & Fitch is still popular with shoppers overseas, teens here in America seem to be over it, and so is Wall Street. With so many retailers popping up, it’s easy for company owners to lose their “cool factor.” If the company breaks itself up, it might possibly unlock value, but don’t hold your breath.

#3) Mining Stocks

Mining stocks, like gold and coal, are in a transition period, especially since the modern American is extremely concerned with the environment. Coal has a bad rap for its negative effects on the earth, and with global warning being a growing problem, energy companies are being pressured to find alternative sources which is why we’ve been seeing falling trends. Here are just a few:

  • Peabody Energy Corp (BTU) – Ranking fifth in the worst S&P 500 stocks so far, shares were down 27.2% this week, although the gain over the last quarter was over 15%. Experts are placing their bets on this companies downward spiral.
  • Newmont Mining Corporation (NEM) – Gold has been hit pretty hard, even though gold miners have been treated as though gold was going to start selling for the price of silver. Shares were down over 39% this week, and the stock is down almost 50% over the last year. It’s believed that it will only continue to drop well into 2014, while natural energy companies see an all time high.