Smart Investments for 2019
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15 Smart Investments to Make in 2020

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Smart Investments for 2019
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Will there be a recession in 2020, or will the economy continue to grow and reward investors? The financial signals are mixed. Some experts, like Goldman Sachs chief economist Jan Hatzius, see continued expansion and market gains. Others aren't so optimistic. Whatever the new year has in store, you've got options for investing in 2020 that promise a positive return. And while you're making financial resolutions for the new year, check out these 30 Money Mistakes You're Probably Making and How to Avoid Them.

Mia Taylor also contributed to this story.

AT&T
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AT&T

Merrill Lynch has made the telecommunications giant's stock one of their top picks going into 2020, citing potential for earnings growth as they expand their 5G cellular network and continue to cut costs aggressively. Another appeal: Analysts project a forward dividend yield of 5% to 6.5% in the coming year.

Facebook
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Facebook

Digital privacy advocates may not be very fond of Facebook, but financial experts such as the Motley Fool and InvestorPlace say the social media behemoth is still a force to be reckoned with in 2020. The company enjoyed nearly 30% growth in revenue over the past year and expects similar numbers in the year ahead.

Exxon-Mobil
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Exxon-Mobil

In general, 2019 was not a good year for the energy sector. But analysts at Merrill Lynch are bullish about the coming year for Exxon-Mobil, the world's largest oil and gas company. Oil prices are expected to climb slowly, and Exxon has plenty of supply coming online. Plus, the company's stock pays a 5% dividend.

General Motors
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General Motors

American automakers have been struggling to cut costs, and General Motors had to contend with a costly 40-day labor strike in the fall. But John Buckingham, chief investment officer at AFAM Capital, told a panel in late October that he considers GM stock to be a value for 2020. The price-to-earnings ratio is an exceptionally low 6 to 1, and the stock yields a dividend of 4%.

Terraform Power
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Terraform Power

TerraForm Power runs facilities throughout North and South America and Europe that generate wind and solar power. The company is on track to increase its cash flow per share by about 5 percent to 8 percent until about 2022, which will likely further increase dividends. It was a top Motley Fool stock pick in 2019 and it remains so for 2020.

Value Stocks
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Exchange-Traded Funds

Not confident about betting on just one stock? An exchange-traded fund (EFT) invests in a range of stocks to give you a broader exposure to the market while reducing the risks associated with investing in just one company. Motley Fool recommends Vanguard's large-blend Total Stock Market ETF, which invests in a diverse portfolio of more than 3,600 growth and value stocks to track the performance of the market overall. The fund has returned 13% over the past decade, matching the Dow Jones Industrial Average's performance over the same period.

Mutual Funds
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Mutual Funds

Mutual funds are a time-honored investment tool and a good way to diversify your portfolio no matter what the economic outlook. Look for funds that invest in goods and services that are always in demand, such as food or health care. The Balance recommends Vanguard Health Care Fund, which has a relatively low expense ratio and a minimum initial investment of just $3,000. It has returned about 9% over the past year and 14.2% over the past decade.

REITs
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REITs

Real estate was red hot in 2019, and the experts at Kiplinger say 2020 could be another strong year for real estate investment trusts (REITs), which invest in a portfolio of commercial and residential properties. Kiplinger writer John Waggoner recommends Realty Income, which leases long-term retail space to companies such as FedEx and Walgreens. The company, which touts itself as "the monthly dividend company" to investors, has yielded a 3.5% dividend return so far in 2019, with a 4.5% compound average annual dividend growth over the past 25 years.

Investment Grade Bonds
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Investment Grade Bonds

With many stocks overvalued in terms of price to earnings ratio, Gladice Gong, creator of Earn More Live Freely, suggests shifting some money to investment grade bonds in 2020. "It's a good idea to take profit from your stocks and move some of your money into safe and liquid investments such as investment-grade bonds to protect yourself from a possible stock market correction," said Gong, who suggests investment grade bond ETFs or exchange traded funds, (which are similar to stock ETFs) and offer a low expense ratio.

Defensive Stocks
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Defensive Stocks

Another move to make if you have any concerns about the stock market headed into 2020 is investing in what Gong, of Earn More Live Freely, calls defensive stocks. "You might want to hold more high-dividend defensive stocks and stay away from growth stocks and cyclical stocks," explained Gong. "This way, you can protect yourself from the volatility in the market. One good example of high dividend defensive stocks are consumer staples stocks. These include McDonald's and Coca-Cola."

BlackBerry
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BlackBerry

Yes, the company that made those phones everyone once used. While BlackBerry may have faded from the headlines in recent years that doesn't mean the company should be written off, says Dennis Shirshikov, senior financial analyst, FitSmallBusiness.com. "Consider why governments and major companies around the world relied upon BlackBerry — it offered the highest level of mobile security available on the market. The company has de-coupled its security infrastructure from its phones and offers these services to major clients who need to secure data," explained Shirshikov. "With the growth of the mobile market and increasing emphasis on security due to data breaches, BlackBerry has positioned itself for huge growth in that market." Though Shirshikov calls this stock a "must-have in any portfolio for 2020," you may want to wait and see how it fares. It was down some 23% at the end of 2019.

Growth Industry Stocks
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Growth Industry Stocks

Cannabis is a growing industry across the country as legalization sweeps the nation. With that in mind, David Bakke, personal finance writer for Money Crashers, suggests stocks in this industry may be a smart buy in 2020. "Cannabis probably will continue to become legal in more states and countries, which is a good sign for the sector," said Bakke. There's a variety of ways to invest in this industry, either through companies that are conducting research tied to cannabis, or those involved in sales or even distribution. Some of the names that are well-known in the cannabis industry include Village Farms International; Amyris; and also iAnthus Capital Holdings.

Shares of Art
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Shares of Art

Those seeking diversification from stocks in 2020 could look to the typical options such as bonds and REITs, says Kevin Pantich of Just Start Investing "Although, there's a new diversification option on the rise right now to consider," said Pantich. "Investing in art is now an option for the middle class thanks to Masterworks, a company that allows people to buy shares of artwork just like you would buy shares of companies through stocks." These investments operate very much like stock index funds, allowing individuals to buy shares of numerous pieces of artwork ranging from Monets to Andy Warhol masterpieces. The 2018 returns in the art market were 10.6%.

Do as Warren Buffet Does
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Other Ways to Save: Do as Warren Buffet Does

Berkshire Hathaway, the Nebraska conglomerate founded by Warren Buffett, owns well-known companies including Dairy Queen and Fruit of the Loom, as well as stock and debt in Apple and Bank of America. The firm has posted extraordinary returns since inception, averaging 20 percent annually. Buffet invested heavily in U.S. Bancorp in 2019, and Kiplinger columnist James Glassman says the bank's stock remains a sound pick for 2020, with a return of about 3% and potential for growth.

Contribute to a 401(k)
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Other Ways to Save: Contribute to a 401(k)

Many companies will match employee contributions to their 401(k)s on a dollar-per-dollar or percentage basis up to a given amount (often 3% to 6% of a worker's pay). Even if your company doesn't offer a corporate match, investing in a 401(k) is a relatively easy way to save because the money comes out of your paycheck along with taxes and other fees; you'll never miss it. Best of all, you can contribute up to $19,500 for 2020, more if you're over the age of 50, according to the Internal Revenue Service.