Chatter that the Federal Reserve is willing to continue its
accommodation strategy (the proverbial "punchbowl" as some
economists call it) had the markets regaining more of what they'd
lost in the recent losing streak.
The commodity sector reaped some of the biggest gains, as
traders look to that volatile area as a beneficiary of the monetary
printing press. Gains were seen in names like Freeport McMoran (
), Cliffs Natural Resources (
), as well as equipment play Caterpillar (
). Despite having a bit more attractive dividend yields of late,
commodity-related stocks have been making lower highs, so sustained
upside could be hard to come by unless the recent trends
Wall Street analyst upgrades helped boost stocks like Qualcomm (
), American Express (
), and AT&T (
). Shares of Fastenal (
) did not participate in the rally after
its latest earnings results.
) was also down as the company continues to trade in a tight range.
Investors are gearing up for a pending change at the top of the
company, as MCD's highly-regarded
CEO Jim Skinner will retire this summer.
When Sabotage is Your Strategy, be Prepared to Suffer to
I was pretty disgusted at the recent news surrounding former New
Orleans Saints defensive coordinator Greg Williams. According to
audio and other evidence, the coach ordered his players to
intentionally harm opposing players, blatantly disregarding the
very rules the NFL set in place to protect its participants. Is
winning a football game worth potentially ending someones career -
I'm sure a number of Saints players in the room sat in utter
shock as they were told to go after one player's knees, another
player's head (since he had a couple of concussions and could
easily be knocked out once again), and to try and give the
quarterback a few extra shots whenever there is a pile-up (the
phrase "attack the head" was used multiple times). I understand
that football is an intensely physical game, but offering monetary
rewards for taking cheap shots at opposing players is a totally
In our own lives, we sometimes run into people - co-workers,
bosses, etc. - who are willing to step on other people to get
ahead. Our job is to make sure we are not influenced by these
people, and remind ourselves that life isn't about winning at any
cost. Rather, life is about succeeding in a fair and honest
fashion. You will never truly win the respect of your peers or
subordinates if you take the low road to the top.
Believe in yourself and understand that success comes in all
forms - not just by being on the winning team.
17 Money Excuses People Make - Part 3 of 3
Excuse #13 - "You have to leverage debt to become rich!"
My Response: This is a dangerous play for many that try and
speed up the road to wealth. We have all heard the amazing stories
of real estate tycoons that pulled off incredible wins, only to get
caught off-guard when markets turned. The financial road is
littered with failed money gambles that were based on leverage. The
banks have always been guilty of encouraging investors to roll the
dice a bit too much when times were good. We have seen the fallout
from that the last couple of years.
Excuse #14 - "I need to invest in a car."
My Response: The words "invest" and "car" almost never belong in
the same sentence unless you are extremely knowledgeable about the
collectible car market.
Excuse #15 - "If everybody got out of debt, the economy would
My Response: Worrying about the economy's collapse should never
be the consumer's concern. Living debt-free should be an ultimate
goal of yours, but giving yourself a license to spend recklessly is
just plain dumb.
Excuse #16 - "Just put it on the card and we will worry about it
when it comes in."
My Response: I understand the convenience factor of carrying
plastic over cash. The danger comes when you allow credit cards to
take control of your spending vices. If you are a "spur of the
moment" buyer, learn to take a pause before making any big
purchases you don't actually need.
Excuse #17 - "I must be able to afford this (car, house,
etc.)since I was approved for the loan."
My Response: This one is a real trap for those ignorant about
the ways credit card companies and lenders operate. What is amazing
is that you can see someone get burned once by signing on the
dotted line for a deal they couldn't afford, but then they will
repeat the mistake not too long after it. Reviewing mistakes in
spending and investing is a necessary tool to make one's path to
wealth a much smoother one.
Retirement Account Deadlines Approaching
One of the best long-term retirement strategies an investor can
use is investing in dividend-paying stocks within their Roth IRAs.
Roth IRA Distributions, including capital gains, interest, and
DIVIDENDS are tax-free if you are at least age 59 1/2 years old,
and the account has been established for longer than five tax
years. Dividends paid into a Roth account are never taxed, even
when withdrawn. This special treatment differs from dividends
accumulated in a Traditional IRA, which would be taxed during
withdrawals. The best part of a Traditional IRA is the tax credit
is counted the year you do it. Some accountants prefer clients to
take this road, knowing it can ease one's tax burden for the
particular year a traditional IRA is funded. Do remember, though,
that withdrawals taken from an IRA account before age 59 1/2,
including income from dividends, is subject to a 10 percent penalty
tax in addition to ordinary income taxation. Always consult with a
tax specialist before making any moves that may incur tax
consequences. Of course, there's nothing wrong with purchasing
dividend stocks within a Traditional IRA either, but Roth IRAs are
particularly attractive to dividend investors looking to maximize
their future retirement withdrawals.
For those of you who are self-employed, you have the benefit of
building a retirement nest egg very quickly with a SEP-IRA. If
you're self-employed, you can contribute 25% of your earned income
or $50,000, whichever is less, to a SEP plan for 2012. Think of all
the high-quality dividend stocks you can be putting to work for
yourself - that's the true essence of making your money work for
you! Again, talk to your tax professional and see how you can take
advantage of this type of account.
New MLP Report Just Released!
The Essentials of Investing in MLPs
, we outline the do's and don'ts of investing in high-yield Master
Limited Partnerships (MLPs). Our exclusive new MLP report outlines
everything you need to know about these popular high-yield
- Understanding their unique company structure
- What you absolutely need to know about their special tax
- Why MLPs may not be suitable for retirement accounts
- How to find the best high-yield partnerships
- …and much more!
Head to the
page to download this brand new report today!
25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been
paying out dividends for 25 years or more. Be sure to check out
the latest list of names here
Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the
difference dividend payouts made in the overall return investors
saw throughout the prior decades. Here are some of the
- The Nasdaq is down 28% since the end of 1999. Even the "blue
chip" S&P 500 stocks are down 15% during that time frame…until
you add back those "boring" dividends. With dividends included, the
S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a
loss for the 25 long years from August 1929 to August 1954. Then
again, without dividends, the S&P 500 produced a 5% loss during
the 13 years from September 1961 to September 1974. But with
dividends included, the S&P's loss became a 46% gain.
- Over the course of the last half-century, dividends have
contributed more than half of the stock market's total return -
56%, to be exact.
Of course, you can't discuss the potency of dividend investing
without making mention of how awesome compound returns are. I can't
stress enough the power of compound interest: you take a small
amount of money and turn it into a large amount over time. Finding
the right companies at the right price points which not only grow
earnings, but also grow their dividend payouts as well!
New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist
Names post that is out today, exclusively for
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
Go Beyond This Newsletter
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