In a year full of surprises for the market (pleasant surprises, I might add), one of the biggest of all has been the stunning performance of defensive stocks -- those steady, low-beta stocks that tend to zig when the economy zags. These dull, stodgy securities, which Wall Street often derides as "widows' and orphans' stocks," are now as glamorous as the highfliers of yesteryear. Soporific sectors like healthcare, utilities, and telecom have led the market this year, rivaling the traditional bull market pace setter, consumer cyclicals.

As of last Friday, healthcare led the pack with a 20.6% gain in 2013, followed by consumer discretionary (up 19.6%) and consumer staples, which have gained 17.6%, according to Standard & Poor's Capital IQ. The S&P 500 has risen 14.6% this year, as of last Friday. It's the tortoise and the hare on steroids!

The explanation boils down to two words: yield and risk.

With interest rates so low on almost everything, investors have been desperately searching for yield. That's why they're still scooping up bond funds, despite all the warnings. It's why they're still piling into dividend-paying stocks, high-yield bonds, master limited partnerships, business development companies -- anything that yields more than 2%.

And it's why they have still been buying real estate investment trusts (REITs), despite the huge run REITs have had since the bear market lows of 2009. During that time, REIT returns easily topped major equity indices like the Dow Jones Industrial Average. They have outperformed the S&P 500 for 11 of the last 16 quarters. Their yields are way down from their peaks. And, increasingly, they have moved in tandem with stocks rather than being a counterweight to equities in investors' portfolios.

REITs are companies that own a portfolio of commercial properties, such as office buildings, shopping centers, and

So, you think the market has had a big run, is ripe for a correction, and that the six months starting now are usually a rocky time for stocks. What should you do? "Sell in May and go away" isn't about timing or outguessing the market -- a fool's errand if there ever was one. It's really about limiting risk.

According to the Stock Trader’'s Almanac, from 1950 to 2011 the Dow Jones Industrial Average gained on average 7.5% over the six months from November through April, but only 0.3% from May through October. And the S&P 500 fell 10% from its April peak last year, 19% in 2011, and 16% in 2010. That's a tiny statistical sample, but it shows that late spring and summer can be rough on your portfolio.

Most investors would be perfectly OK just holding on and heading for the beach. But if you're

Ah, it's spring again, when we put winter coats in storage and try to keep the pollen from making us sneeze. And it's when some of us lighten up on stocks. That's right, it's "sell in May and go away" time on Wall Street. Though the calendar hasn't quite turned, I think now's a good time to lock in some of your gains.

That doesn't mean selling everything -- I can't stress that enough for the many "black or white" thinkers among you -- but it does mean trimming your stock holdings, or shifting some of your equity allocation to more defensive areas. "Sell in May and go away" is really a way to lower risk at what is traditionally the rockiest time of the year for stocks. And this year, besides the usual seasonal considerations, some fundamental and technical indicators suggest it may be prudent or investors to pull

On Monday, the rationale for owning gold collapsed along with its price. The yellow metal plummeted more than 10%, settling above $1,350 an ounce at the close before bouncing back a bit Tuesday. That was its lowest level since February 2011, crashing through every support level in sight and pushing gold deep into bear market territory. It's down 28% from its peak above $1,900 in August 2011.

But gold's price could be headed much, much lower, said Campbell Harvey, a professor at the Fuqua School of Business at Duke University. Harvey has looked at gold prices over the centuries, and concludes that it's still trading at lofty multiples of inflation. At more normal multiples, he told me, it would be changing hands below $800 an ounce. If it gets there, many investors who loaded up on gold coins, bullion, shares of gold mining companies, and gold ETFs will get a

For 16 years, Treasury Inflation Protected Securities (TIPS) have been an investment of choice for Americans saving for retirement.

TIPS are US Treasuries whose principal adjusts along with the Consumer Price Index, giving investors protection against inflation without the volatility of stocks or commodities. No wonder investment heavyweights such as Pimco’s Bill Gross and Yale University’s chief investment officer David Swensen have recommended TIPS for individual investors.

But TIPS have become victims of their own success. The Federal Reserve’s extraordinarily loose monetary policy and investors’ desperate flight from risk have propelled TIPS to new highs in price - but new lows in yields.

The iShares Barclays TIPS Bond ETF (TIP) hit an all-time closing high of $123.30 last December. It closed at $121.24 Wednesday. The ETF racked up gains of 33% from its October 2008 trough, an enormous advance for a bond fund.

Yields of some TIPS have fallen

Too many investors are bypassing prudent money management to guard against a total market collapse that may never come, and the cost of that strategy may far outweigh any potential benefits, writes MoneyShow's Howard R. Gold, also of The Independent Agenda.

Have you ever watched Doomsday Preppers? It's a popular National Geographic Channel reality show about average Americans who make elaborate plans to protect themselves and their loved ones from earthquakes, mega-volcanos, economic disaster, geomagnetic storms, you name it.

These people have spent countless hours and tens of thousands of dollars to keep their families safe from TEOTWAWKI — The End of the World as We Know It.

Now don’t get me wrong — disaster preparation is prudent and necessary, as we all learned when Hurricane Sandy hit the East Coast. But many of these preppers are, well, slightly over the top. That’s why they’re on

People don't buy umbrellas until it rains. They don't buy overcoats until the thermometer plunges below freezing. And many don't buy stocks until the market is up. Way up. We've seen that dramatically this year, as retail investors emerged from their bond-market cocoons and jumped back into stocks.

From 2007 through 2012, they pulled $600 billion from U.S. equity mutual funds while putting twice that amount into bond funds, according to the Investment Company Institute. But in January, investors started pouring money back into U.S. stock funds -- some $19 billion, their biggest such contribution in more than six years, according to ICI data. Since then, it's tapered off a bit, although flows into foreign equity mutual funds have remained strong.

Meanwhile, retail brokerage firms like Fidelity, Schwab, and TD Ameritrade reported substantial increases in trading volume over 2012. Anecdotal evidence of a sentiment shift is also plentiful. This is

Are you one of the millions of Americans who poured their money into bonds over the past five years, and now are nervous that rates will rise? Well, you’ve got company—the managers of the very funds in which you’ve invested.

Two managers of leading bond funds I spoke with have moved to protect their shareholders from what they view as a gathering storm. They have shortened maturities, lightened up on some overpriced sectors, and have gone far afield—outside the U.S.—for decent yields with lower risk.

The problem, of course, is a three-decade-long rally in the bond markets, which has driven rates way down, combined with a Federal Reserve that has gone way beyond its usual rate-cutting toolbox by adding more than $2 trillion to its balance sheet. That helped push the 10-year Treasury note to its lowest yield ever—1.38% last July.

But while stocks have rallied, bond prices slipped and

Big news: The Dow Jones Industrial Average made an all-time high Tuesday, closing at 14,253.77. It set another new mark on Wednesday, advancing 42.47 to close at 14,296.24. But there was little celebration in the financial media, as skeptical journalists bent over backwards to not get carried away with the hype such magic numbers inevitably bring. Even congenitally optimistic Wall Street was strangely subdued.
And two long-time bulls, whose sanguine views were featured in this column last September, sounded cautious notes this week -- at least for the short run.

On Monday, Craig Johnson, technical market strategist for Piper Jaffray, declared that the market had entered the "drop" phase of what he called "a hop, a drop, and a pop," after a key indicator gave a "sell" signal. Citing "technical damage" from a "deterioration in the market internals over the past several weeks," he recommended that investors lighten up on

Last week brought the sad news that Martin Zweig had died at the absurdly young age of 70.

Many tributes to him (which included this insightful commentary by Mark Hulbert in MarketWatch) recalled his memorable appearance on Wall Street Week with Louis Rukeyser on October 16, 1987, where he warned of a stock market crash.

It happened the very next trading day, and Zweig’s reputation as a forecaster was sealed. (You can watch the video here, starting about six minutes in.)

Still, that understates his importance. A numbers wizard (he got a PhD in finance from Michigan State), Zweig saw patterns in the market no one else could. His newsletter, The Zweig Forecast, had a stellar track record, according to Hulbert, and he ran a successful hedge fund with his business partner Joseph DiMenna.

Zweig, who famously purchased a multi-story penthouse apartment in New York City’s

Last September was a great time to be an Apple (AAPL) shareholder. The stock topped $700, capping a remarkable run in which the shares practically doubled since July 2011.

Even more extraordinary, much of Apple’s huge advance came after the death in October 2011 of its founding genius, Steve Jobs. Nothing could stop this juggernaut, it seemed.

It’s been downhill ever since. From its closing peak of $702.10, Apple shares plunged by 37.4% as of last Friday, when it closed at $439.88. It’s bounced back a bit, but when the world’s most valuable company loses that much in just four months, something must be seriously wrong.

It is. Apple’s competitive position has seriously weakened, and investors are recalibrating their outlooks. Tailwinds have turned into headwinds as tangible and intangible issues alike weigh heavily on the shares.

Apple has lost the mantle of the greatest growth stock of our

This week, the self-styled global elite and their accompanying media hordes gather in Davos, Switzerland, for several days of schmoozing and pontificating about the state of the world in 2013.

In many ways, things are better than in 2012. Though unemployment remains high in some countries and the global recovery looks fragile, some big political uncertainties (like the U.S. election) are off the table and the dysfunctional U.S. Congress has stepped back twice from the fiscal brink.

But most important, the eurozone doesn't look like it's going to implode. In fact, The Economist reported, "the invalids in Europe's medical ward are making a remarkable recovery."

I discussed that in my column last week, where I noted with some surprise that the southern European debtor countries - the "invalids" of Italy, Spain, and Greece - have been among the best performing stock markets in the world over the

After years of underperformance, this could be the time for a rebound in the turmoil-driven markets of Greece, Spain, and Egypt, among others... but don't bet the house on it, writes MoneyShow's Howard R. Gold, also of The Independent Agenda.

In 2011, every major stock market in the world was down, except one -- the U.S., which eked out a gain of less than 1%.

"In 2012, you had completely the opposite," said money manager Nicholas Vardy, who tracks 37 country exchange traded funds for his London-based firm, Global Guru Capital. Nearly all global markets were ahead in dollar terms in 2012, with many outpacing the U.S.

Now, Vardy believes a more fundamental reversal is under way: Emerging markets, which have lagged badly (as this column has pointed out repeatedly), are outperforming again.

And the very best developed markets in 2013 may well be -- are

A strong start in the stock market in 2013 has cheered investors weary of the fiscal cliff doom and gloom during the holidays, and MoneyShow’s Howard R. Gold, also of The Independent Agenda , examines the sectors that will lead the next leg up.

Stocks have moved up smartly since the New Year’s Eve rally began, and though they’ve paused a bit over the last couple of days, they appear to be heading higher still.

Last year’s leaders - especially consumer discretionary and financial stocks - are still setting the pace, suggesting that the economy will continue to grow in 2013, as housing recovers and auto sales stay strong.

But as the year progresses, I expect those early-cycle plays to pass the leadership torch to stocks that do best later in an economic recovery. We may even be coming to the end of the massive rally in homebuilders

It's that time again when pundits and guru wannabes of all stripes say how they think 2013 will turn out for the economy and markets. Here are my four best predictions, along with one big wild card.

1. The U.S. economy will continue to grow, albeit slowly, in 2013.
Now that we've avoided the fiscal cliff by permanently preserving the Bush tax cuts for 98% of the American people, I believe a Washington, D.C.-induced U.S. recession is unlikely.

The expiration of the payroll tax holiday and the $100 billion in automatic spending cuts from the notorious "sequester," along with any additional changes in the tax code to raise revenue, might knock as much as 1.5% off GDP this year. With economists looking for 2.3% growth in 2013, that could mean GDP rises less than 1%, especially early in the year.

But Federal Reserve chairman Ben Bernanke's aggressive bond-buying

"All happy families are alike; every unhappy family is unhappy in its own way." So wrote Tolstoy in the 19th century. But he could have been talking about the U.S. stock market in 2012.

Why? Because the market’s biggest winners this year -- at least in the large-cap S&P 500 index -- were often beneficiaries of bigger trends, like the strength of consumer sentiment and housing's revival. But the losers were generally individual companies hit by technological obsolescence or bad management decisions.

Financial and consumer sectors set the pace in what has been a surprisingly good year for U.S. stocks. With gains of 23.6% and 20.9%, respectively, financial and consumer discretionary stocks significantly beat the S&P 500's strong 12.76% gain for the year through Wednesday's close. (Energy, materials, and utilities were the biggest laggards.)

Homebuilder PulteGroup (PHM) was the S&P's biggest winner, rising 171.2% this year, while fellow homebuilder Lennar

It's been more than a year since the yellow metal's serious run ended, relegating it to bouncing around a range far short of its all-time highs. Could 2013 change the game? MoneyShow's Howard R. Gold, also of The Independent Agenda , weighs in.

Gold was a quiet winner before its big sell-off this week. The yellow metal had worked its way up from around $1,560 an ounce back in July to nearly $1,800 in October. Just last week it changed hands at $1,750.

But then came waves of selling, which drove the price below $1,690 by Thursday morning, still slightly above support levels.

But gold has gone nowhere in more than a year. It peaked near $1,900 in September 2011 and hasn’t come within $100 of that since. It fell as low as $1,540 in May. Though it’s still up 8% in 2012, this year’s rally is looking pretty

This preoccupation with the fiscal cliff is, frankly, driving me nuts.

I thought I was over it a few weeks ago. But it’s gotten much, much worse. You can't go anywhere without reading or hearing about the doomsday deadline when taxes increase and spending cuts kick in, potentially delivering a $500 billion double-whammy to the economy.

Markets move up and down based on the Washington rumor mill. On Tuesday, the Dow Jones Industrial Average closed down 89 points after Senate Majority Harry Reid (D-Nev.) said lawmakers were making "little progress" on negotiations to avoid going over the cliff by year-end. On Wednesday and early Thursday, stocks rallied after some hopeful statements by President Obama.

But for all of Wall Street's moaning and groaning, the market has hardly corrected at all over the past few weeks and the key VIX volatility index has barely budged. Maybe investors are venting their anxieties

(Originally published November 15, 2012)

The missing piece of the puzzle, the one thing that has made this recovery so much weaker than previous ones, may finally be falling into place: The housing market appears to be in a sustained recovery from what can only be called a depression.

So far, new home sales in 2012 are up sharply on average from 2011, while existing home sales are up, too, according to the National Association of Home Builders. Inventory has dropped substantially. And median sale prices of new and existing homes have risen by around 5% so far this year, their biggest price increases in years.

More than 100 economists polled by Pulsenomics for the real estate Web site Zillow expect the good times to roll. They foresee home price increases of around 2.3% this year, but also think residential real estate will continue recovering for the next