Every year at this time, Bottom Line/Personal asks leading personal finance experts for the shrewdest money moves that our readers can make in the new year.

For 2015, their advice ranges from investing in giant companies that are undervalued and in various small companies that pay big dividends to buying a big automobile early in the new year and “unlocking” your smartphone.


Invest in mega-cap stocks. After nearly six years of a bull market, it is best to focus now on stocks that still are relatively undervalued and that offer stable earnings and brands recognized around the world.

Mega-cap stocks, from companies that are each worth more than $100 billion, fit that bill. Mega-caps tend to do especially well in the later stages of bull markets, when interest rates rise, earnings grow more unpredictable and the stock market becomes more volatile.

My favorite way to invest in mega-caps now: The iShares S&P 100 ETF (OEF), an exchange-traded fund that invests in the top 100 stocks in the Standard & Poor’s 500 index based on their market capitalizations. Performance: 14.7%.*

Buy beaten-down oil stocks. Investors fled from oil stocks as oil prices plunged from more than $100 per barrel to less than $70 in 2014. That has created a great buying opportunity. Reason: If oil prices continue to stay low long enough, both OPEC and major US oil producers will cut production. That will reduce the global oil supply and eventually lead to higher prices. It’s best to invest in the first quarter of 2015, when I suspect oil prices will bottom out. You must be willing to hold your oil stocks at least three to five years. Because investing in a single company is risky, I’m betting on oil stocks through ETFs.

My favorite oil ETF now: Energy Select Sector SPDR ETF (XLE) invests in 43 oil and energy-services companies that are in the S&P 500, including especially big investments in Exxon Mobil and Chevron. Performance: 9%.


Put cash that you can’t afford to risk into Internet savings accounts. These online-only accounts offer relatively high yields for supersafe investments. And it will be important to have easy access to your money this year. Reason: If the Federal Reserve starts raising interest rates in 2015, you’ll want the flexibility to shift money toward better opportunities. If rates don’t rise, your money still could earn interest as high as 1.25%, which is more than the rates you get for locking up cash in top-yielding one-year certificates of deposit (CDs).

My favorite Internet savings accounts now: UFBdirect.com, a division of BofI Federal Bank, 1.25% annual percentage yield (APY) on balances of $25,000 or more…MySavingsDirect.com, a division of Emigrant Bank, 1.05% APY, no minimum balance.

Invest in bonds that have rising credit ratings. Trying to make money by betting on when bond yields will rise is too difficult even for professionals. Better: Buy high-yield bonds that have relatively low credit ratings that are likely to improve because the financial performance of the companies that issue the bonds is likely to improve.

Examples: Icahn Enterprises has bonds rated BBB– due in August 2020 that recently yielded 4.95% when held to maturity. The publicly traded holding company of legendary investor Carl Icahn has been hurt lately by his investments in energy companies, but he has a long history of turning around his fortunes. Heinz is offering a bond rated BB– due in October 2020 recently yielding 4% when held to maturity. The ketchup maker was acquired by Warren Buffett’s Berkshire Hathaway and 3G Capital in 2013, and the operating results at Heinz since then are encouraging.

For hefty dividend yields, invest in certain cash-rich small companies. Some small companies offer the same type of steady earnings growth, solid cash flow and rising dividends as some much bigger companies—except that their stock yields are above 5%. These small companies tend to be in unsexy industries that investors overlook, but they dominate these market niches.

My favorite high-yielding small-cap stocks now: Student Transportation (STB) provides school bus transportation and management services to schools throughout the US and Canada (recent yield: 8%). Consolidated Communications (CNSL) provides rural landline telephone service in six states and is finding new sources of revenue offering services such as TV, high-speed Internet and home automation and security (recent yield: 5.7%).


Buy a new full-size SUV or pickup truck early in 2015 if you want the best deals and selection. The demand for these larger vehicles will continue to rise as 2015 progresses because of lower gas prices, cheap financing and the need to replace increasingly old vehicles. In October, 12 of the top 20 best-selling new vehicles were SUVs or pickups. Make your purchases in January or February. That’s when dealerships have the lowest volume of sales and are motivated to negotiate.

  • Get your smartphone unlocked, and sign up with a discount wireless carrier to save hundreds of dollars a year

A new federal law requires wireless providers to “unlock” your phone if you request it at the completion of your contract. Or you can buy an unlocked phone at Amazon.com and other websites. Next, get a calling plan from one of the dozens of discount wireless carriers such as CricketWireless.com (a subsidiary of AT&T), RingPlus.net or StraightTalk.com, which buy minutes and data wholesale from the major carriers and resell them at bargain prices. Example: You can save $405 a year by switching from Verizon to Straight Talk. Check whether your phone uses CDMA or GSM technology, and make sure it is compatible with the discount wireless carrier.

*Performance figures in this article are five-year annualized returns as of November 30, 2014.

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