Sectors to watch this year. There will be plenty of opportunities to make money this year, even after two strong years of returns for share investors. Focus on buying businesses that will grow long into the future and survive whatever gets thrown at them and keep an eye on the sector outlook. By Nathan Bell, Intelligent Investor Share Advisor. It was a good year for the sharemarket in 2. All Ordinaries Accumulation Index which assumes dividend reinvestment up 1. The bounty was widespread, with 1. Chart 1 below shows. Provided you were not heavily invested in resources or mining and engineering services companies, which should generally be left to investors with large risk appetites given their exposure to volatile commodity prices, your portfolio should be looking healthier as we enter 2. Chart 1 Best performed ASX sectors in 2. Sector performance Source Intelligent Investor. Health Care sector valuations soar. The Health Care sector was the years best performer, producing a 4. A combination of steady and in some cases rapid earnings growth saw valuations soar. Powerful-Lessons-From-The-Review-Of-Becoming-Warren-Buffett-1.jpg?fit=750%2C500&ssl=1' alt='Watch Becoming Warren Buffett Download Music' title='Watch Becoming Warren Buffett Download Music' />Ramsay Healthcare was the hero of the sector. Its share price increased 5. PE ratio of 2. 8. Few large businesses can justify that sort of PE multiple, and while we are wary of the dangers of underestimating such a high quality business, there is no margin of safety at current valuations. Editors note Do not read the following commentary as stock recommendations. Do further research of your own or talk to a licensed financial adviser before acting on themes in this article. We own CSL, Sonic Healthcare, Res. Med and Cochlear in our model Growth Portfolio but only respiratory device manufacturer Res. Med currently sports a positive recommendation, as the rest are close to fully valued. We would love another opportunity to invest in any of these companies at a cheaper price, but even though Res. Meds PE ratio above 2. It also has nearly 1 billion in cash sitting on its balance sheet, ensuring that any product recalls or other temporary problems can be dealt with from a position of strength. Financials and other outperformers. The four other heavily weighted sectors in the index that outperformed included Financials, which is dominated by the banks and produced a return of 3. Telecommunications, up 3. Consumer Discretionary and Staples indices that produced 2. Although National Australia Bank is the cheapest of the big four banks statistically, we prefer Commonwealth Bank and Westpac because they have not taken large risks abroad and instead continue to benefit from their regulated oligopoly at home. We also prefer the big four banks to the regional banks, as they are more likely to receive financial support in a crisis, as they did in 2. Our model portfolios have very little exposure to the banks, because they have become expensive and will be sensitive to the eventual slowing of the Chinese economy. We have positioned our portfolios away from stocks heavily reliant on strong growth in the Australian economy, and towards businesses such as 2. Century Fox and Macquarie Group that have large overseas exposure, to take advantage of a falling Australian dollar and the slowly recovering Western economies abroad. Telecommunications. The Telecommunications sector is heavily weighted towards Telstra and Singapore Telecommunications, but the performance of the mid cap companies, such as TPG Telecom and M2 Telecommunications, whose share prices increased 1. Watch Becoming Warren Buffett Download GoogleOur preferred pick is M2 Telecommunications. Watch Pirates Of The Caribbean: The Curse Of The Black Pearl Tube Free more. Its forecast PE ratio of 1. There is also room to cut costs further, which should help increase margins and profits. Retail. We have largely steered clear of the Discretionary Retail sector. While it has enjoyed a handsome rebound from 1. Australian economy was going to hit a wall, the long term structural threats to businesses such as Harvey Norman, JB Hi Fi and Myer from the likes of Amazon and Apple, and an influx of luxury fashion labels from overseas, remain. As Warren Buffett once said, its hard to pay a low enough multiple for a business in decline. The Consumer Staples sector should continue to plod along, but with valuations increasing we expect more of our returns to come from dividends than capital growth. Our preference is Woolworths, which offers a 3. Watch Greetings Online Freeform'>Watch Greetings Online Freeform. Australias high consumer debt levels. One of our biggest concerns with Woolworths is management making a large and misguided acquisition overseas. The year ahead. Ordinarily, as bottom up value investors, we analyse businesses on a case by case basis rather than focusing on rotating money by sector. But the collapse in share prices in the Gold sector should pique the interest of speculators that do not mind punting with money they can afford to lose. Given the risks, we recommend taking a portfolio approach. Beadell Resources, Kingsrose Mining, Northern Star Resources and Silver Lake Resources are currently on our buy list, but with very low recommended maximum portfolio weightings. In 2. 01. 4, merger and acquisition activity could increase as companies grow more confident and consider making use of their strong balance sheets. Rather than trying to pick targets, Macquarie Group and Computershare should do well if corporate activity picks up. Macquarie looks fairly valued, but Computershare is a relatively low risk way to play this trend should it eventuate. If not, they are still the type of blue chip companies that can form the bedrock of a high quality portfolio. Computershare should benefit as the US economy recovers and interest rates rise. Dividend yield. Lastly, investors searching for a mix of yield and growth might consider Sydney Airport. While not screamingly cheap, it offers an unfranked 5. Air travel is becoming cheaper, more and more airlines are offering more services than ever before, and Australia remains a popular tourist destination. Sydney Airport also has first right of refusal over a second airport in Sydney and it is much more profitable than an airline. No one knows what the future holds, but the difference between 2. That is usually a sign to check your portfolio limits and take some chips off the table, particularly if you have profited from owning some risky businesses, and keep some cash handy to take advantage of opportunities. It may seem strange to those without a contrarian bent, but this year I hope there are a number of earnings disappointments. Australia boasts scores of well run, highly profitable businesses that we would love to own at the right price. With expectations currently so high, there are bound to be some opportunities as various companies disappoint investors who are short term focused. Slower than expected economic growth in China would certainly bring this about, but it is impossible to know when this might happen. As a result, we remain focused on buying businesses that will grow long into the future and survive whatever gets thrown at them. Provided you have tempered your expectations after two highly profitable years, this simple strategy should ensure you make the most of the opportunities that 2. About the author. By Nathan Bell, Intelligent Investor Share Advisor. It was a good year for the sharemarket in 2013, with the All Ordinaries Accumulation Index which assumes dividend. Watch Sinister 2 Online Hoyts. The official website for Entourage on HBO, featuring videos, images, schedule information and episode guides. Nathan Bell is Research Director of Intelligent Investor Share Advisor. You can unlock all of Share Advisors stock research and buy recommendations by taking out a 1. This article contains general investment advice only under AFSL 2. From ASXASX Investment videos feature some of the markets best commentators, and are a great way to stay in touch with market trends. Copyright 2. ASX Limited ABN 9. All rights reserved 2. This Is How Spotify Curates Ads for You. If you like making playlists, youre more likely to buy video games. Thats some of the data Spotify collected for its new tool, Spotify. Me, which helps brands use peoples listening habits to predict their personality traits and better market products to them. Spotify analyzes users listening habits based on three factors how much they listen to new music, the number of different genres of music they listen to, and how much they make and listen to playlists. Listeners are then categorized based on these habits, and Spotify predicts what activities theyre more likely to do and their shopping habits. For example, Eclectics arent loyal to any particular genre and are more likely to stream TV and movies on a regular basis. Check out what Spotify thinks youre more likely to do by signing onto Spotify. Me with your Spotify account. Spotify Thinks People Who Always Listen to the Same Songs Are More Likely to Buy Energy Drinks The Verge.