Stocks for the Buy-and-Hold Investor

By Jamie Dlugosch, TheStreet.com Contributor

Depending on your viewpoint, the market is either teetering on the brink of a potential collapse and correction or simply building a base for more gains. Knowing the outcome at this point in the game is a guess at best.

I can make a case for both. On one hand, a market that puts up a record gain for December is long due of a pause. On the other hand, stimulus, value vs. bonds, a strengthening job market, a more-optimistic consumer and impressive corporate earnings suggest that stocks are due for more gains.

These are very difficult circumstances for traders. In fact, the conditions are perfect for those patient investors who adhere to a buy-and-hold strategy.

Goldman Sachs. Signs of a market top: The king of deal-making is in the news with respect to its investment in Internet fad and social network king Facebook. It is interesting to note that one of the company's fund managers took a pass on the deal, citing that an investment in Facebook did not fit the investment strategy of the fund. Funny: Goldman will make a ton of money selling the deal to others, but the investment was not strong enough for its own proprietary product.

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Starbucks. The coffee shop purveyor is ditching its name in its logo. I don't know about you, but I know Starbucks the name, not Starbucks the logo. This move seems questionable at best but will have little impact on future value. Recently on "Mad Money," Jim Cramer flagged Starbux as one of several stocks with the most to gain from exposure to China, and it was one of Goldman Sachs' 10 best stock picks for 2011.

Gap. Shares of the iconic retailer sank nearly 7% on Thursday after reporting a decline in same-store sales. I thought the holiday season was a plus for retailers, but apparently not all stores sell equally. Gap has struggled for years, and the brand may be tiring. If you needed an excuse to exit the name, this might have been it.

It was highlighted recently as a retail stock that could rally in 2011.

Citigroup. The huge financial services firm weathered the financial crisis storm. Investors in this giant penny stock (according to the SEC, a penny stock is defined based on share price below $5 per share) have made a killing betting on the eventual recovery. Today banks are poised for profits with an upward sloping yield curve. Banks and big banks in particular make for great buy-and-hold investments.

Ford. The recovery in the auto industry has been impressive. Ford's ability to avoid bankruptcy was due in part to a strategy of focusing on smaller cars. Perhaps it was just luck, but more likely it was strong management. Look for more of the same in 2011. Ford is another great buy-and-hold stock.

Target: The discount retailer lost $4 per share on Thursday after reporting same-store sales grew by less than 1%. That disappointing result was well below expectations. Shares now trade near its 200-moving day average of $54 per share. It would be easy to panic, but I would view the selling as a buying opportunity.

IBM: An interesting article from Forbes examines IBM's efforts in the area of cloud computing. In my opinion, it is overstating the obvious. IBM missed the boat on cloud and is now looking to use its mainframe and storage power to ride the wave. Success in cloud could make IBM a worthwhile buy-and-hold possibility for investors.

Salesforce.com: Speaking of cloud computing, investors should note that shares of CRM are up some $10 so far in 2011. With a market still deciding which way to go, the momentum investors are riding this stock higher. Talk of its demise look to be premature. I would not trade this stock. Instead, this is a wave to ride.

Netflix: Momentum investors can be fickle folks. Look no further than Netflix. Shares have been trading aggressively lower since peaking late last year. This is not a stock to buy and hold -- in fact, it might be a name worth dumping. If the momentum crowd gives up and moves on, things could turn ugly.

SPDR Gold Trust: Has gold lost its luster? At a minimum, it appears to have lost its can't-lose trading position. A weaker dollar creates inflation and thus higher gold prices. Lately we are seeing a stronger dollar thanks to a stronger economy. Previously, investors presumed a stronger economy implied higher inflation. Not so much today with gold down so far this year. I would view such a state to be temporary. We will not have a stronger economy without creating some sort of inflationary consequence. As such, buy and hold gold.

Research In Motion: The big player in smart devices unveiled its tablet computer this week. Apparently everyone does have Apple envy. My sense is that RIM's move is too little too late. Anyone remember the fate of Palm? It may take a bit more time, but Research In Motion's fate is likely to be similar.

AT&T: Verizon is coming, Verizon is coming. Perhaps in a move to pre-empt Apple's iPhone on Verizon , AT&T announced this week that it would be selling a cheap version of the Apple 3G. Again, investors looking for clues about such a strategy need only look at Palm's fate. Deep discounting of phone equipment was the kiss of death. Consumers are willing to pay for top-tier technology. Intense competition on the low end ensures that not enough volume exists to make the effort worthwhile. 2011 will be a tough year for AT&T.

However, it recently increased its dividend payout, and it's one of 2011's top-yielding Dow stocks.

BP: A new government report regarding the Gulf of Mexico oil spill further implicates BP and Transocean. The giant oil company response is to shrug. Not a smart move, in my opinion. The matter at hand is litigation, and the more evidence against British Petroleum, the more expensive the settlements or judgments. Will these companies ever learn?