Money-Making investment ideas for 2012 ~ OnlineMoneyMaking

1. Stick with 2011’s winners

Buy what’s worked and head for the beach? Not quite. But many of the headwinds investors fought in 2011 haven’t disappeared and could worsen, which means that some of last year’s winners could repeat.

Geopolitical and economic risks will, as always, impact financial markets and consumer prices short-term, with accompanying high volatility. Yet broadly speaking, in the current anemic global climate, where economic growth is increasingly scarce, pressure on interest rates and inflation isn’t much of an immediate threat.

U.S. stocks trounced their international counterparts, and look to do so again in 2012. Large-caps outperformed small- and midcaps, and growth-stock investors bested more bargain-minded value buyers. Expect more of that as well.

The hunt for yield is another priority. The Dogs of the Dow perform in volatile, tug-of-war markets and seem poised for another round. The 2012 Dogs are unchanged from 2011 except Procter & Gamble Co. PG -0.64% has replaced McDonald’s Corp. MCD +0.59% . AT&T Inc. T -1.65% is again the highest-yielding Dow component.

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In a slow-growth world where developed nations are deleveraging — much of Europe is likely to be mired in recession this year and the U.S. will be lucky if growth nears 2% — expect bond yields to remain low.

The riskiest play is long-term Treasurys. If the 30-year Treasury yield slides to 2% or 2.5% — perhaps in a euro-sparked panic — that probably would be the last gasp of the Treasury bond bull. Still, investors would win big on a total return basis, though not as much as in 2011.

As an alternative to volatile long- and intermediate-term Treasurys, consider high-quality corporate bonds, municipal bonds and income-producing stocks.

2. Own defensive stocks in a deleveraging age

Focus on capital preservation and the preservation of cash flow.

From a stock perspective, the classic defensive sectors include yield-rich consumer staples, health care and utilities.

Among these three, only the consumer-staples sector gets an enthusiastic nod from analysts at S&P Capital IQ. Utilities, especially shares of electric companies, enjoyed a tremendous run in 2011, up 14.5%. And while these companies offer hefty dividends, valuations have increased considerably and the S&P analysts expect market performance from the group in 2012. The analysts are also neutral about the health-care sector, which gained 10.2% last year.

3. Add some economic sensitivity

“A balanced sector approach that emphasizes both cyclical and defensive themes is critical to navigating this manic market,” said Alec Young, global equity strategist at S&P Capital IQ, in a recent research report.

That means you have to temper the urge for flight and beef up the portfolio with some fight. Put some money into cyclical sectors that lagged in 2011, including materials, industrials, energy and technology.

“Some of the beaten-down cyclical groups will come back,” said Doug Ramsey, chief investment officer at mutual fund firm Leuthold Group. Topping his list: shares of railroads, chemicals, industrials and materials.

4. Stick with dividend-paying growth stocks

U.S. corporate balance sheets — the fundamentals — are in excellent shape overall. Still, in a slow-growth climate the advantage goes to the best of the best. These companies tend to be found in areas that are less economically sensitive. They’re typically large-caps, with a “wide moat” of business, strong cash flow and a history of using capital for productive purposes including acquisitions, share buybacks and regularly higher dividend payments.

“Gravitate more to the income-oriented sectors of the U.S. market for the time being,” said David Rosenberg, chief economist and strategist at Toronto-based investment manager Gluskin Sheff + Associates, in a recent research report.

As examples of high-quality companies whose dividend yields top Treasurys, he points to AT&T, 3M Co. MMM -0.12% , Exxon Mobil Corp. XOM -0.20% , Emerson Electric Co. EMR -0.99% , McDonald’s, Johnson & Johnson JNJ -0.89% , Colgate-Palmolive Co. CL -0.69% and Wal-Mart Stores Inc. WMT -0.39%

Other defensive, cash-rich growth stocks on Rosenberg’s suggested list include Procter & Gamble and Microsoft Corp. MSFT +0.61% Read more: Low-risk investing in highly volatile markets.