Market Wrap-Up for Apr.20 (INTC, FCX, WYNN, PII, UTX, WFC, more)

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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 seeing.

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 ( INTC ), Freeport McMoran ( FCX ), United Technologies ( UTX ), Wynn Resorts ( WYNN ), and Polaris Industries ( PII ). On the flipside, sellers pushed down shares of CSX Corp ( CSX ) and Wells Fargo ( WFC ). More new highs for gold ( GLD ) and silver ( SLV ) 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 retirement.

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 "Be a Dividend Millionaire" book - be sure to pick up your copy on Amazon today!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: CSX , FCX , INTC , PII , UTX

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