MSN columnists beat the market in '07

By MSN Money staff

It's one thing to pick the right stocks. When the market is up, as it is this year, there are lots of stocks with gains. Just owning an index-tracking mutual fund will put your money in a bunch of solid companies.

Avoiding the rotten apples? That's another skill altogether. And during this year of crunched credit and messy mortgages, it's been easily as important as finding the gems.

And that's where a number of the investing columnists at MSN Money have distinguished themselves. The S&P 500 Index ($INX) is up 3.6% this year. Jim Jubak's 50-best-stocks list? Up 10.5%. Tim Middleton's portfolio of exchange-traded funds? Up 11.8%. Michael Brush's portfolio? Up 12.6%. (Performance numbers in this story were updated as of mid-December except where noted.)

Jon Markman's picks are up 14% for the year. And perhaps his best advice to readers was his "25 stocks to avoid," a financials-laden list that he named on Nov. 1. If you'd have sold those stocks short on Markman's advice, that group of stocks would have made you 11% in less than two months.

Consider this article a report card for MSN Money's 2007 results. While others in the financial media spout opinions about markets and companies, our columnists tell you what to do about it, and we hold them accountable for their stock and mutual fund picks with articles like this one and on our Experts Picks page.

Bad banks, a fad to avoid and great corn

Steering clear of bank stocks has in some ways seemed a no-brainer this year, with an almost daily drumbeat of news about subprime mortgages going bad and bank after bank writing down billions of dollars' worth of bad investments. But more than a few smart investors thought the worst of the credit crunch had passed last summer and began buying the already battered financial and home-building stocks.

Markman's negativity on the financials didn't start with his 25 stocks to avoid. In a Sept. 14 column under the headline "What the big banks aren't telling you -- yet," he told his readers to buy the UltraShort Financials ProShares (SKF, news, msgs) ETF, which climbs when financial stocks tank. The fund has climbed 10% since, while the S&P 500 is down slightly in that time.

Markman's other piece of avoidance advice was this: Skip the green fad. His "Unearth Day" portfolio, chock-full of defense contractors, energy producers and railroads, has gained 20% since he created it April 26. The S&P 500 is down 1.4% since then.

There were plenty of other big gainers this year for Markman: He recommended an already hot Apple (AAPL, news, msgs) in June, in time for it to gain an additional 48%. And he created a portfolio of corn-boom-linked stocks in April that has climbed 58%.

Not that Markman hasn't had a few clunkers. He mistimed the continuing, but volatile, energy rally with a set of stocks picked on April 12 and was wrong or at least early with three biotech picks in June.

4 out of 5

Jubak, MSN Money's senior markets editor, runs five portfolios on our site for users to follow, so it's difficult to zero in on any one of his picks. The clearest view of Jubak's success this year is this: Four of his portfolios are beating the S&P 500's 3.6% return this year.

The best of Jubak's portfolios this year is his 50 Best Stocks in the World, which lived up to that billing with a 10.5% return. One big reason: Rio Tinto (RTP, news, msgs), which Jubak added to his portfolio in 2005, doubled this year. Another long-term holding in that portfolio, Nokia (NOK, news, msgs), which has been in the portfolio since 2003, jumped 76% this year.

But Jubak didn't just get it right with big foreign stocks. His Future Fantastic 50 Portfolio, which focuses on riskier stocks with the potential for even bigger gains, has gained 9.5% this year, thanks to smaller, faster-moving companies such as Navteq (NVT, news, msgs) and Zoltek (ZOLT, news, msgs), both of which have doubled this year after being added to the portfolio in 2006.

The long-running Jubak's Picks, with a 12- to 18-month time horizon, and Jubak's Dividend Stocks for Income Investors also are ahead of the S&P 500 this year. His lone laggard portfolio? The Stealth Blue Chips. Those 10 stocks, all holdovers from previous years, are down an average 5.8% this year.

Continued: Sometimes early, often right

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