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Investing Specialists

Top 10 Buys and Sells of Our Ultimate Stock Pickers

Cautious optimism gave way to more risk taking during the first four months of 2010.

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By Greggory Warren, CFA | Senior Stock Analyst

Despite the dip in the markets since the end of the first quarter, indices like the S&P 500 Index (SPX) are still up more than 50% since the markets bottomed in early March 2009. It was against this backdrop that our Ultimate Stock-Pickers were reviewing their portfolios during the period, making purchases or sales that would prepare them for the next stage of the market. While cautious optimism continued to be the most prominent opinion put forth by our top managers, there was a growing belief that the improvements seen in corporate profits and balance sheets (especially in the financial services sector) could hold up in the near term. Much as we had noted in a recent article on the top purchases and sales by our best performing managers, most of the capital that was put to work during the most recent period went into financial services, followed by energy, industrial materials, and consumer goods).

This ran contrary to what we saw in the fourth quarter when there was a more or less equal amount of conviction being placed in more defensive sectors of the market, such as consumer goods and health care, as there was in relatively riskier areas, like financial services and energy, with more than a handful of our Ultimate Stock-Pickers believing that we were due for a bull market correction.

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.