What's Next for These 2012 Market Movers?
It's that time of year again. No, not the holidays. It's the time of year to take a look back at your investment successes and mistakes, with an eye to the future. The Dow Jones Industrial Average looks like it will close 2012 in positive territory, up about 7.5% so far, though that could change quickly if fiscal cliff negotiations falter. That said, let's take a glance at some notable market movers this year, and see what their prospects look like moving forward.
Far and away the pride of the Dow in 2012, Bank of America shares have rallied back from a hellish 2011 in which the massive bank's solvency itself was called into question. After tumbling 60% last year, shares have surged more than 90% this year already. With plans to increase mortgage lending, Bank of America has begun to actually look well situated for the future.
In contrast, Hewlett-Packardhas had a year most investors would rather forget about. Shares have lost more than 40% of their value as a stagnant PC market and, recently, questionable acquisitions have come back to bite the company -- hard. HP has the unsavory distinction of being the Dow's worst year-to-date performer, which could be part of the reason activist investor Carl Icahn was rumored to be interested in turning the company around. If HP can show success in enterprise services in 2013, the company might just be able to do so.
Peering ahead to the New Year, it's worth considering the "January effect," which states that certain stocks will sell off in late December for tax reasons, only to promptly rise again in January. My Motley Fool colleague Rebecca Lipman discussed this last year, and if you'd bought a share in each company she suggested at the first ring of the opening bell this January, you'd be sitting on 27% gains for the year.
One of the companies she recommended was AIG , which joins Bank of America as another financial slowly fixing its problems after taking a severe beating during the '08-'09 crisis. Shares in AIG are up more than 40% this year. The U.S. Treasury sold the last of its AIG stock on Friday; at one point the government had upwards of $180 billion committed to the struggling insurer.
One final stock on the forefront of many investors' minds is Apple , which, despite having taken a nasty stumble recently, still boasts greater than 25% returns on the year. The early success of the company in 2013 will no doubt come down to holiday sales. Apple's intimidating lineup of tablets has been an explosive growth mechanism for the company, and even if it loses some market share, the tablet market is growing so rapidly that Apple could still post a blowout quarter.
There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article What's Next for These 2012 Market Movers? originally appeared on Fool.com.John Divine owns shares of Apple and has long JAN 2013 $10.00 calls on Bank of America. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.The Motley Fool owns shares of Apple, AIG, and Bank of America and has options on AIG. Motley Fool newsletter services recommend Apple and AIG. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.