BofA’s 10 Defensive and Yield Stock Picks for 2013

December 10, 2012 by Jon C. Ogg

Bank of America Merrill Lynch has issued more picks and a macro-investment strategy for 2013, and the message is rather clear: Be selective and position defensively. The firm said that it sees a December rally carrying over into January, but it also said that there is the risk of a deep correction in 2013.

Bank of America’s team sees a rise in 2013 or for a volatility spike in the VIX and the Global Financial Stress Index. Its report said, “As a result, we are becoming more selective and leaning toward attractive yielding equities and defensive sectors.” In short, those defensive stocks and high-paying dividends are where the firm is looking. It also said, “We expect the S&P 500 to reach the 1500 area, which is the range of the 2007- 2008 highs. But as we enter 2013, there is the risk of a 10-15% correction.”

So, here are themes and picks: Water is a new theme (something probably a bit late); health care and consumer staples are favored, along with telecom, utilities, mega-caps and yield.

Ten stock picks for 2013 with an average yield of 3.8%:

JON C. OGG

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.