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By Jason Stipp | 12-23-2011 10:00 AM

Five Gifts We'd Like to Give

Stressed-out investors, unemployed workers, Detroit automakers, and an overstretched eurozone are on Morningstar markets editor Jeremy Glaser's list this year.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to the Friday Five.

Happy holidays to you. It is the season for giving, and Morningstar markets editor Jeremy Glaser has a list of gifts he'd like to give this year. He's here to give us the rundown.

Thanks for joining me, Jeremy.

Jeremy Glaser: You're welcome, Jason.

Stipp: So, what do you have for the Friday Five this week?

Glaser: Well this week, we're going to give gifts to all investors, to Yahoo, to job seekers, to Detroit, and finally to Europe.

Stipp: So investors looking over their portfolios might want a few different kinds of gifts, but there's one they probably need more than anything else, what is that?

Glaser: Well Jason, as you can tell, I have a very well-worn stress ball here, and it's helped me get through the volatility in 2011. I think all investors are going to need one of these in 2012 and possibly beyond. We are in an incredibly volatile period, between what's going on in Europe; potentially things that could be going on in the United States with discussions of different budget cuts and with our sovereign debt; with just the uncertainty in a lot of emerging markets: Is China going to have a hard landing or soft landing, are they going to have a construction bubble that's going to burst all of a sudden?

With all those outstanding questions and with the facts just moving so quickly in a lot of these questions, markets are responding with a lot of volatility. We're seeing a lot more very big moves in a single day and those kind of moves, I think, can definitely make investors extremely nervous.

As always, we think that the best policy is to really have a long-term view, to really buy and hold and make sure you are in companies with great competitive advantages, and that you're happy with your asset allocation. But it's hard just to kind of sit back and watch it. So, we're hoping that maybe stress balls can help investors calm down a little bit and ride through the volatilities so they can reach their long-term goals.

Stipp: Next on your list, Jeremy, you want to give a gym membership to Yahoo. This is a company that has suffered from shortness of breath recently. What do they need to do to get back on the road to financial fitness?

Glaser: Yahoo really has had a difficult year. Between management turnovers and their market share continuing to shrink, it's been challenging for them. I think for Yahoo to really get back into fighting shape, they're going to have to shed some of the excess weight--that is, their stake in Yahoo Japan and Alibaba, which is a Chinese e-commerce company. And it's not that those are bad companies. In fact, they are both pretty strong, but it really just creates a lot of complications for Yahoo when it comes to entering into different deals, when it comes into really focusing on their core business. It takes a lot of management attention. There are a lot of worries about who really controls the decisions that are happening in those entities.

But getting rid of them is not so easy. There could be some pretty serious tax consequences to just selling it outright, and Yahoo has started, and this week we heard about it, that Yahoo is starting to really look at novel ways of creating new companies to try to mitigate some of that risk, but it's something they are going to have to be focused on if they want 2012 to be a better year than 2011.

Stipp: Also on your gift-giving list, Jeremy, are the unemployed. You have something that you want to buy for them. This is a pretty big group still. What do you want to get for them and why?

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