What the experts say

Emerging-market mania; Remodeling for less; Pot stocks

Emerging-market mania

A lot of mutual fund investors seem to have suddenly decided that stocks in emerging markets are a far better bet than those in developed countries, said Michael Pollock in The Wall Street Journal. Some of those joining the rush “may be in for a surprise.” Emerging markets do add diversity to an investor’s portfolio, and growth in such developing nations as Brazil and China bodes well for those nations’ stocks. But “studies suggest that strong economic growth often doesn’t translate into strong stock returns.” The reason: Growth expectations usually are already priced into the stocks. In fact, because the prices of emerging-market equities grew so much in 2009, U.S. and European stocks in the near term “may have better upside potential than stocks in more vibrant economies.”

Remodeling for less

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When it comes to remodeling, cheaper isn’t always better, said Josh Garskof in Money. “Fortunately, there are a few effective ways to get good quality for less.” Remodeling now, during an economic slump, is obviously one way to get a deal. Planning your projects for the off-season can also trim your tab. Install central air in the winter and, “if you can,” wait until summer to replace your furnace. Given the choice between a large contractor and a mom-and-pop shop, go with the latter. These “leaner operations” typically do the same work for 5 percent to 20 percent less.

Pot stocks

With medical marijuana now available in 14 states, the legal-pot business is big “and getting bigger,” said Sarah Morgan in SmartMoney. How can investors get hooked up? To be honest, getting in on the ground floor might not be wise. “I’d say that of people who invest in medical marijuana at this stage, nine out of 10 of them are going to wind up losing money,” says Peter Leeds, CEO of PennyStocks.com. The problem: While legal marijuana is already a $1 billion business in California alone, the handful of publicly traded companies that have a piece of the industry are “all tiny” and thus at high risk of failure. Still intrigued? Leeds says that Converted Organics, which makes organic fertilizer and builds indoor farming equipment used to grow marijuana, is one of the more reputable firms in the field.

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