Similar to last Tuesday, the markets were moving higher for the
most part (excluding the Nasdaq index) following a plethora of
earnings reports. This move came despite home prices data coming in
worse than expected.
The biggest earnings winners included names like Baker Hughes (
BHI
), Hershey Company (
HSY
), Parker Hannifin (
PH
) (which also reported a dividend raise), AT&T [[T], and 3M (
MMM
). Speaking of dividend raises, IBM Corp (
IBM
) came out with
news of a dividend hike
as well as expanded share buyback. On the downside, shares of
Reynolds American (
RAI
) were lower following their earnings results, as were shares of
Coach (
COH
), which also raised their dividend payout as well.
In case you missed them, here's a breakdown of all the big
earnings reports from well-known dividend stocks we covered this
morning:
Social Security Death Watch
The government released the latest versions of the annual Social
Security and Medicare Trustees Reports on Monday, and unfortunately
the funding trend has worsened. The trust fund that holds reserves
for the overall Social Security program is now expected to run out
of money in 2033, which is three years earlier than trustees
expected last year. The Medicare trust fund will run out of money
in 2024, which was the projection last year as well, so no
improvement there from the bleeding. Meanwhile, the Social Security
disability program is set to go run out of funding in 2016, two
years earlier than last year's projections.
Only a fortunate minority of Americans have significant sources
of retirement income other than Social Security. Social Security
made up 50 percent or more of the retirement income of 66 percent
of Americans age 65 and older in 2009, up from 64 percent in 2008.
And more than a third of retirees (35 percent) receive 90 percent
or more of their income as a monthly payment from the Social
Security Administration. The average monthly payout to retired
workers was $1,176 in 2010. More than 54 million Americans were
paid a Social Security Benefit last year.
I keep saying investors need to take charge of their own
investment plans (whether for college, retirement, or whatever the
life-cycle event is). Relying on federal entities like Social
Security to provide for financial peace of mind can be hazardous to
your wealth. Fortunately, many dividend investors are heeding my
advice!
Finding the Right Investment Strategy is Essential
We feel dividend investing is the best option for the vast
majority of the investing public. Putting what you've learned into
practice is the second step. We advocate investors develop a
monthly system of putting money to work in their brokerage
accounts. Automate this process as best you can, so as to remove
any possibilities of "missing a month" here or there.
Embrace the learning process of investing. You should never stop
gathering knowledge along the way. Always be willing to keep an eye
on what your money is doing. Staying in the loop is a great thing.
You'll always benefit from staying on top of market and economic
moves, and how they affect your holdings.
Just dabbling in the markets will not get you to where you need
to be. Instead, stay consistent with your investments. If you have
a bad habit of jumping in and out of the markets, dividend
investing is the best remedy for your affliction. You'll gain a new
perspective on the results that long-term investing and the power
of compound interest can deliver.
We realize many of you have already put these concepts into
practice, but market volatility tends to push some investors to the
sidelines for extended periods of time. That's when the habit of
trying to "time" the markets takes hold. The danger with market
timing is that you need to be right twice - both when you buy and
sell. You essentially morph into a trader, and I've made it clear
how incredibly difficult it is to succeed at trading. Instead, be
an investor who seeks to generate income and compounding returns
from dividend-paying stocks.
The Harder You Work, The More Money You Should Make
Headlines about income inequality continue to be in vogue these
days. The discrepancy between the rich and poor is undeniable, and
I can guarantee one thing: we will never see a fair balance of
wealth. Some of the reasons behind this fact are built into our
employment system.
In my teenage years, I took a job at the local post office. In
that environment, no matter how hard you worked (or how much you
slacked off), your pay raises would roughly correspond with those
of your coworkers. No wonder why morale was so low! There was
absolutely no incentive to achieve better results. In fact, my
fellow postal workers became angry with me for working so hard
because it made them look bad.
I quickly realized I needed to challenge myself more and not be
capped by the system. Hence, my entrepreneurial spirit was born. I
needed to be in a situation where the harder I worked, the more
money I made. Starting my own business was the only way I could
make that happen.
Rather than being fixated on the thought of "income equality",
taking charge of my career and finances has put me in the driver's
seat. I always recommend others do so as well.
Income, Income, Income
At Dividend.com, we maintain our focus on the best
income-producing investments the markets have to offer during time
of heightened volatility. We want to make sure we have only the
most pullback-resistant names on our
Best Dividend Stocks List
. Also, if we see the market putting in what looks like a decent
bottom, we will be prepared to scale up the list of stocks we like.
Stay tuned and be sure to look for
Dividend.com Premium
member alerts along the way. Don't count on the government or your
employer to set you up for a remarkable retirement. Take control,
do your own research, and achieve your goals yourself!
Go Beyond This Newsletter
We know many of you enjoy reading the daily newsletter, but
remember that with our
Dividend.com Premium
service, the newsletter is just one small component of what we
offer. Here are the "Big Three" benefits of our Premium
service:
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Best Dividend Stocks List
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- Creating your own
Watchlist
allows you to track the performance, news, and upcoming dividend
payouts of the particular stocks you care about.
- Finally, we offer the most complete and easy-to-use dividend
data on the web. Many subscribers use this data as part of a
"Dividend Capture" trading strategy, but long-term investors can
use it to keep track of impending payouts. Just visit our
Ex-Dividend Calendar
for a complete outlook on which companies will be paying out
soon.
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Thanks for reading everybody. I'll see you tomorrow!
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.