The market came out of the gates today with guns blazing and
never looked back. I am getting a bit concerned the bullishness may
be getting a bit overdone. It's rare to get a market where both
equities and commodities are ripping higher as we have been
We removed another name from our
Best Dividend Stocks List
today. You can
view the downgrade with a full explanation here
if you did not read our e-mail alert we sent out earlier. We are
focused on always keeping the best names possible for investors
looking to put new capital into the markets.
Earnings were the clear driver of the action. Some of the big
winners included Intel Corp (
), Freeport McMoran (
), United Technologies (
), Wynn Resorts (
), and Polaris Industries (
). On the flipside, sellers pushed down shares of CSX Corp (
) and Wells Fargo (
). More new highs for gold (
) and silver (
) prices as the metals mania rolls on. Please don't be greedy if
you have any exposure in the metals area. Use some sell stops in
case we see a reversal. Oil prices are also ramping as well.
I was having a discussion with my parents recently about my
comments surrounding the home as an investment. When it comes to
building wealth, your home is technically not your best asset in
the sense it doesn't produce income (assuming one lives in a
residential one-family home). However for many, it is the main
asset they possess and where the bulk of their net worth exists. My
parents have been in their home since 1979, so they have built up
some decent equity. Every once in a while I will poke them and tell
them they could be producing some great income if they ever thought
about selling their home and investing that money. For them, and
likely for many that are approaching retirement age, or are there
already, moving is not something one looks forward to. My parents
will probably never want to move, because as they say, they are
"used to the area" and the challenge of picking up and starting
over is not one they are not too interested in. They have been
savers all their lives so that will help them in their later years,
but for many who maybe have not been as cautious on spending, there
are some major decisions coming down the pike. Staying on the
subject of real estate and moving, sometimes one needs to really
take a step back and assess what is really the best move one can
make to ease whatever financial burdens are presently being felt,
or may be coming around the corner.
One of the things I keep running into as I get older is how
magnified the financial realities become for families. I will not
let up in reminding everyone how important it is to build income
streams. Our focus is dividend-paying stocks and this is the
easiest place many are able to get started in. The other areas of
income I have mentioned is multi-family real estate or commercial
properties that produce income. Also, building businesses can work
well if you do the proper due diligence. Do you have to do all
three (dividend stocks, real estate income properties, businesses)?
No, but for many people that haven't done any of these, I would
strongly urge one begin to take action.
Here are three of my favorite examples of how powerful producing
income and having compound interest perform its magic.
Investor #1 starts investing $5k a year at age 25 and does so
for 40 years ($200K total invested) in Bank CDs, money markets,
etc. averaging 3% a year. After 40 years, this person's nest egg
becomes worth just over $652K.
Investor #2 starts investing just over $4K a year at age 45 and
does so for 20 years ($81K total invested) in dividend-paying
stocks that historically average an 11% annual return, this
person's nest egg becomes worth over $653K.
Investors #3 starts investing $5K a year at age 55 and does so
for 20 years ($100K total invested) in dividend-paying stocks that
historically average an 11% annual return, this person's nest egg
becomes worth over $806K.
As you can see, compound interest is a very strong force when it
comes to putting money to work over a period of time. Next, you
will notice the danger of being too conservative with your money
(as Investor #1 is). They had the right idea is starting young, but
they chose too conservative an investment road. Lastly, you see
that age is not really a factor when it comes to being invested
properly. This example should inspire many individuals who make the
mistake of thinking it's too late to make a difference for your
Thanks for reading, and I'll see you tomorrow! P.S. Please pass
this e-mail on to someone you think can use some financial
motivation as well as being kept in the financial news loop that
could affect them. Thanks again! And thanks for supporting my
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, as well as a detailed explanation of
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