December Money Magazine

Though there were many interesting articles in this issue, many of them do not help my key focus, which is looking at where money should be invested, and information that could provide insight on that front.

One of the main investing articles talked about how in spite of the recession, the vice stocks, the ones for gambling, smoking and alcohol continued to do well. On this point in particular, I found it interesting that many of the alcohol sales are not from the cheap brands, but instead from the more expensive, quality brands. This actually coincides with what I have observed from my husband's family, where they would all prefer to spend more for a better alcohol than waste their money and calories on a cheap drink.

The article stated that Diageo, which produces Johnnie Walker, Guiness and Ketel One is trading at 18 times 2013 earnings. The competitors are actually slightly higher, but this particular company has more room to grow because it sells more overseas than its competitors.

Later in the article, it stated that if you don't want to invest in these areas based on principle, you have more of a challenge, but organic food makers might be a good area to look at. The two they named are Hain Celestial and Whole Foods. The article states that both of these companies have good return on capital, healthy recurring revenue and great projected growth rates.

I know that my family does prefer to shop organic, and I know many of my friends do as well. Based on nothing but my opinion, I think that as more people learn about what chemicals are in their products, and possibly more studies showing the effects of these chemicals on our bodies, more people will try to switch to organic products if they can afford to do so.

 There was a different article that truthfully confused me quite a bit, but I'm sure I will learn more as I go. This article was discussing the difference between a traditional index and a fundamental index. From what I understand, the key difference is the factors on which the stocks are chosen. It stated that there was an extra return for value stocks, and fundamental indexes tend to have more of those. Also, smaller stocks apparently outperform over long periods.

As I understand it, the main value of an index is that it allows you to diversify without active management, which is choosing all your own stocks and following them individually. It sounds like the fundamental index is somewhat of a hybrid, with some of the benefits of active management, while retaining the safety of an index.

The magazine recommended Europe, as their economy is expected to expand 1% in 2014. It also recommended investing in technology, as business spending is supposed to pick up.