Choosing Stocks in 2020

The stock market's value is at an all-time high. Depending who you consult, that is either a very good or a very bad thing. Few experts have a neutral opinion about the state of today's economy or securities markets. What does that mean for those of us who want to hunt down some solid investment opportunities for the new year? For starters, it means more homework.

When values are historically high, that could mean a correctional downtown is imminent. Regardless of your personal beliefs, consider the following points about how this year's best stocks might behave, what the hot sectors are and how to make your own picks from thousands of available securities.

The State of the Market

As the year gets underway, both the S&P and the Dow are at all-time highs. Ask 50 analysts and you'll get 50 different answers as to why that's the case. The fact of the matter is this: unless the historic climb continues, even a small-scale correction could mean a stagnant or falling market for several years. No doubt, there will be some stand-outs for the year even in a generally downward or sideways scenario. Those over-performing stocks are likely to come from the strongest sectors, so a diversified portfolio composed of these companies could be the way to go in 2020.

Hot Sectors for the Long Haul

Identifying the best stocks in any given time frame is a gambler's job. That's because specific securities are susceptible to too many uncertainties based on management styles, individual products and other contingencies. But one old truism carries weight in times like these: Follow the sectors. In other words, focus on the forest rather than individual trees. What are the three major pieces of the economy shaping up to be the hottest plays for the year? According to analysts, technology, health care and financial services will do better than all others.

Alternatives to the Stock Market

If you are one of those people who wants to sit on the sidelines of an historically high market, consider alternatives like gold, silver, real estate and art. The so-called alternative market is an active one. While volatility and liquidity can be a challenge, alternative investments offer the key advantage of direct asset ownership. You won't have an account with a broker or a statement sent to you in the mail. Instead, you'll hold the valuable stuff in your hands. Art works, bullion and real estate are the three most popular choices for anyone who wants to pull back from the securities markets and wait for prices to sort themselves out.

Let Experts Do the Heavy Lifting

Why not let experts choose your stocks for you? In fact, the majority of people get professional help when it comes time to assemble a portfolio. Decide how much you have to invest and how much you are willing to spend on fees and go from there. If you have a modest or small amount of money to work with, a robo-investor can be a smart way to go. These glorified apps do most of the number-crunching and even rebalance your holdings every so often.