Market Wrap-Up for Apr.5 (TXN, ANF, DMND, PG, SCHN, KBH, more)


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Global economies continue to wage a fight against inflation, as China and Poland boosted interest rates today. In the U.S., the Federal Reserve continues to mostly say inflation is a non-issue. We all know that's a big stretch, but until we see interest rates move higher, we have to continue to maneuver as best we can. The bond market could be the ultimate decision maker in where rates will head, but so far, bond traders are buying into Ben Bernanke's take on inflation.

It was a big day for Diamond Foods ( DMND ), which closed up nearly 7% higher after this morning's Pringles deal with Procter & Gamble ( PG ). Another stock moving up on big volume was Abercrombie & Fitch ( ANF ) - higher by nearly 11%. The odd thing is there was no news out that would explain today's 8% price/volume spike. Texas Instruments ( TXN ) surprisingly finished higher despite what seems to be a bit of an overpay in the company's acquisition play for National Semiconductor ( NSM ).

A couple of earnings plays that didn't fare all too well today included Schnitzer Steel ( SCHN ) and KB Home ( KBH ) - both closing lower following earnings results. It was another down day for Toyota Motor Co. ( TM ) as the company is still trying to stabilize their auto parts' supplies amid the earthquake/tsunami disaster in Japan. General Motors ( GM ) and Ford ( F ) shares have stabilized with investors betting the companies will pick up market share. No dividends yet from the "The Big Two" American automakers, but we'll keep monitoring for any hints dividend payouts may be on the horizon. The situation in Japan is still quite precarious, and investors need to be very careful if they are considering jumping in.

We continue to patiently look for opportunities in the market to either add or modify our current dividend recommendations on our "Best Dividend Stocks" List . As we do this, I hope investors continue to allocate money into the best dividend names we continue to like. We added a new name to our recommended list today, so be sure to check out the link below if you did not read the e-mail alert we sent out earlier. Consistently looking to free up capital to put to work is a must if you are going to build long-term wealth. We are certainly cautious on the market and the possibility for pullbacks as commodity prices continue to worry us. This has been a concern for a while now and we are fortunate to not have stayed out of the markets. The market can often frustrate the smartest investors and at times, knock them out of the game. This usually happens when one decides to start "fighting the tape". We see it happen everyday, especially in the momentum stocks traders love getting in and out of on a daily basis. Hence, why I would push anyone away from trying to become a fill-time trader. The risk to blow up is high and many people don't have the capital to put to risk that would not cause a crisis if they lost it.

In 2009, according to the most recent data available from the Labor Department, average annual investment income for the 24.6 million American households headed by people 65 and older amounted to $2,564. That figure is down 34% from 2007, and is the lowest since 2003. This may seem like old data, but guess what everybody - the data has likely gotten worse. Interest rates in money markets, savings accounts, and Bank CD's are about lower today than just a couple of years ago. We have been hearing countless stories from readers that are so grateful to have found our service the last couple of years. Realizing that a social security- focused retirement will leave many barely able to make it month-to-month, we are seeing a growing class of older investors embracing dividend investing more than ever. We get calls and e-mails from numerous people that are in their 80′s even who are looking to push the ball forward and keep a nice income stream coming in. Many like the idea of getting monthly checks and are utilizing our monthly dividend income generator tool to make sure each month is covered with names from our recommended list. If you are younger and want to maximize your long-term results, you should consider contacting your broker and tell them you want to get your dividends re-invested back into more shares anytime they are paid out. This will create the biggest opportunity to take advantage of compound interest.

The example I like to use always is how someone invests a mere $50 per month - that's $600 per year - in dividend stocks from the age of 8 to 13, and re-invests those dividends, you would be accumulating over $1 million by the time you reach the age of 65. Reinvesting your dividends within a retirement account is awesome, especially if you are sitting in a Roth IRA which will be tax-free when you are ready to start withdrawing those monies for your retirement. Think of how little you even need to get started with, and how much it can grow to in the example above.

Everyone should consider maximizing every retirement vehicle possible, but there is a roadmap to follow as far as which accounts should get priority. Starting with a 401K, you should find out the total your employer will match and fund that option first. A recent survey revealed that 39% of 401K participants don't maximize their contributions according to what their employers will match - don't be one of them! The next item of business should be funding your IRA, in which you have many more investment options (dividend stocks especially!). The IRA contribution limits are $5,000 for 2010, or $6,000 if you over age 50. Lastly, you can circle back around to your 401(k) again, where you can contribute up to $16,500 this year, a limit that jumps to $22,000 if you are over age of 50.

The mindset of what retirement is all about has been changing quite dramatically for the last couple of decades. I see the internet having played a big role in this as people of all ages continue to be much more active in their daily role. It is quite exciting and I see it in the spirit of people not feeling enslaved by working in their later years. For some, working is a must if they did not prepare well financially, but for a growing number of older people, the spirit of entrepreneurship is a key driver. The boom in franchise ownership for older people is a growing trend. At the West Coast Franchise Expo in November, 27% of attendees were 51 or older, up from 22.5% in 2008; at a different event on the East Coast in April, the percentage of 50-plus attendees jump from 21.5% to 24%. How you finish is being taken to a new level for older workers!

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 aw well as being kept in the financial news loop that could affect them. Thanks again! P.S. Please keep the book reviews coming for my "Be a Dividend Millionaire" . It means a lot!

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 Nasdaq, Inc.

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