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Shopping for winners in a trickier market environment

Wednesday, 15 Jan 2014 | 10:14 AM ET
Image Source: Blend Images | Hill Street Studios | Getty Images

Investing in 2014 is likelier to be trickier than 2013 when stocks went straight up, so shopping for a few "must have" investments could be key to performance.

CNBC asked several investors and analysts what made their shopping lists.

On the stocks front, United Continental Airlines tops the list for Douglas C. Lane and Associates Portfolio Manager Sarat Sethi. Sethi, whose firm's fund beat the S&P 500 over the last 10 years net of fees, says he likes the stock's valuation and sees continued growth in profits and improvement in the company's balance sheet. United Airlines has been an out-performer so far this year, up almost 24 percent.

Investors' 2014 shopping list
CNBC's Dominic Chu goes shopping for a few of investors' top picks in stocks, bonds, commodities and currencies in 2014.

Sethi also likes auto parts supplier Delphi Automotive. He says the company has exposure to all major car makers and high value products with global exposure. That stock has increased about three percent since the start of the year against the S&P 500's flattish performance.

(Read more: Challenges of scaling 2014's wall of worry)

On the global markets front, Jurrien Timmer, Fidelity Investments portfolio manager and director of global macro strategies, favors investing in developed markets, specifically the U.S., Germany and Japan. Timmer says all three major economies are benefiting from ongoing central bank easing. Despite negative gains in these markets so far this year, Timmer says they continue to benefit more than China and other emerging markets, from ongoing monetary accommodation.

Cliff Noreen, president of Babson Capital, which manages mostly bond and loan assets, says there are no "cheap" markets today. In the shopping list for bonds, he favors less liquid fixed income asset classes like municipal bonds. Noreen, who has around $188 billion in assets under management, specifically likes general obligation bonds which are backed by the taxing authority of municipalities. He also likes revenue bonds backed by hospital systems and universities.

As far as commodities, RBC Capital Markets precious metals analyst George Gero has gold on his shopping list. Gero believes gold is the hedge to have with "too many bears in the woods."

(Read more: Gold less bad but declines still ahead)

"I believe that gold is going to resume getting investor interest as we start to see inflation rear its head up both here and in the euro zone due to continued stimulus from central banks," Gero said.

(Read more: Dollar bulls to stay put: poll)

Finally on the shopping list for currencies, the U.S. dollar is the top play for Paul Richards, managing director and head of foreign exchange rates and credit distribution at UBS. Richards says the U.S. economic picture is improving; he sees a possible rally in the dollar similar to the rally in British sterling on the heels of better data in the U.K.

.—By CNBC's Dominic Chu and Elizabeth Schulze. Follow them on Twitter @thedomino and @eschulze9.

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Featured

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • Sharon Epperson is CNBC's senior commodities and personal finance correspondent.

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.

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