The markets got off to a mixed start this week as some small
deals got done over the weekend, while other potential deals
grabbed the early headlines.
NYSE Euronext (
) shares finished lower after the company announced it would not
entertain an offer from Nasdaq OMX/Intercontinental Exchange. I had
mentioned to readers that taking some profits off the table on the
initial pop on the news was the best play in the short term. The
only way this stays alive is if Nasdaq/ICE decide to raise their
offer. At that point, things could get interesting. Not sure if
that will happen though. It is certainly a situation I will be
Meanwhile, shares of Tyco International (
) closed up 3% on a potential bid coming from French-based
Schneider Electric SA. Investment bankers could be instrumental in
keeping the rally going with all the deal possibilities being
thrown around. Elsewhere, shares of Monsanto (
), BHP Billiton (
), and V.F. Corp (
) all rallied following positive analyst comments out this morning.
Sellers appeared this afternoon in the commodity space, with Consol
), Anadarko Petroleum (
), and Occidental Petroleum (
) seeing much of the attention on the downside.
Let's take a look at some investing anecdotes this morning and
how they can affect one's portfolio:
1. Making Quick Decisions
As a trader, one would become conditioned to having to react to
news headlines as quickly as possible if daytrading is one's
gameplan. Most of the time, making quick calls is equal to flipping
a coin in the air, heads or tails. It's pure gambling and not much
else. For an investor looking to make a better risk/reward
calculation, preparation is often the best weapon you can possess.
Spend some time figuring out exactly what you're going to do, what
your goal is for the move you are about to make, and what the
parameters need to be before you even dive in.
2. Fear of Headline Risk
I talk about this often when it comes to those who loved to be
glued to their television sets day and night. The business media
will shake you out of many positions if you let them come into your
lives all hours of the day. Brokers love investors that trade a lot
as transaction costs are just gravy to them. You need to get away
from being bombarded by the "breaking news" effect. Think long-term
and take a look at your portfolio once a day, but no more - if you
fall into the "I need to know what the news is" category.
Otherwise, once a week is plenty of time to check in to see how
things are going.
3. Getting Too Complacent
This is pretty much the opposite of the second example above.
Too often investors get complacent with their losers instead of
winners, believe it or not. They tend to ignore the losers and
instead focus on the names that are up (sometimes selling out way
too soon). Don't ever get complacent when weeds start appearing in
your portfolio. Remember my rule - anything that is down 25% or
more from its 52-week high should be looked at closely, and
considered as a name that could be trimmed or eliminated entirely
from your portfolio.
I'll have more investment nuggets to share as we move
I hope everyone has had a chance to check out our
members-only weekend articles, including the new features that
highlight some of the biggest winners and losers from the week that
was, in regards to analyst upgrades, downgrades, as well as
earnings/story stocks. We also had a rundown of how various
Dividend ETFs performed on the week. Our expanded dividend data is
pretty much all in place so anyone that focuses on "Dividend
Capture" strategies should have plenty of good stuff to research
each day. Speaking of dividend capture, premium members can now
access a new 9 page report we just released on things an active
investor needs to know when it comes to a dividend capture
strategy. Be sure to check it out!
The early reviews are starting to come in and the one central
theme is how easy my
"Be a Dividend Millionaire"
book is to understand! This is what I was hoping it would be for
the masses. I have gotten quite a few people who said they have
read it cover-to-cover in a day or two. Too often books start off
with the right message, but then get loaded with tons of filler and
become boring. Stock market pundits tend to go over the top with
lingo that just darts over a readers' head. The book assumes little
as far as investor expertise goes. I hope everyone gets a copy or
even a few to pass along to friends and family.
I had a lot of fun on Mike Brown's "The Money Show" this past
Saturday on KMOX-AM (
) - St.Louis. I will be on with Mark Cope tonight in Dallas at
6:15pm, so if you are in the listening area, please tune in to
Thanks again for reading! Please pass this on to anyone you
think we can get inspired and educated about building wealth and
using common sense to do so.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
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