In what was a lazy Friday in late August, there wasn't much
significant stock news or data pushing the averages. As has been
the trend on lower volume days, the bias tends to be toward higher
prices and this pattern repeated itself once again today. The
market lost a bit of ground this week, but the downside was overall
fairly minimal.
Positive Wall Street analyst calls helped pull some well-known
brands higher, including Bristol-Myers Squibb (
BMY
), Microsoft (
MSFT
), and Nike (
NKE
). Eli Lilly (
LLY
) and Sherwin-Williams (
SHW
) had a fairly strong day as well. Struggling retailers Best Buy (
BBY
) and Staples (
SPLS
) once again were not able to get much going and finished
lower.
We did a new name to our recommended list (first one in a
while), so be sure to check out the
post
if you missed the alert we sent out earlier today.
The Pre-Retirement Income Drop Reality
A new report from Sentier Research shows the typical household
income for people age 55 to 64 years old is almost 10 percent less
in today's dollars than it was when the "recovery" officially began
three years ago. Some have argued that the recovery was limited
mostly to the financial markets, and unfortunately didn't affect
real-world job growth - and I happen to agree with them.
Sustained unemployment among older workers may be at least
partly to blame for this income decline. Once older workers lose
their jobs, they have an unusually hard time finding employment
again. This trend is also emerging for younger age groups as well.
One's career is a key financial foundation that allows one to build
wealth over time. Today's job reality is a scary situation for
many, and for those who don't want to put in extra efforts to
secure their futures, the end game will not be good. It's critical
to take note of the skill sets that will continue to be in demand
for many years to come. That way, you'll be able to keep your
incoming fire hose of funds (earnings from work/self-employment) at
full blast.
What's more, savers are continually being punished by the
Federal Reserve's consistent policy of keeping interest rates at
abysmally low levels for several years. As I've written many times,
we see no signs these zero-percent interest rates will end any time
soon. So what are older folks to do?
Let's look at an example that could hit home with many readers
who've found themselves unable to pull the trigger and put money to
work in the markets. Many individuals, young and old, choose to
either sit in cash or instead to give their money to banks. Banks,
in turn, "generously" pay them 1.50% for a 5-year CD (according to
this morning's numbers posted on Bankrate.com). What does the bank
do? They take that money and invest it themselves, earning a much
higher rate of return.
For the "safety and security" of earning almost nothing,
individuals continue to forfeit their ability to create better
returns for themselves. Quality dividend stocks (think in the 3% to
6% range) are clearly a better option than CDs and savings accounts
in the current environment - and will continue to be for several
years to come.
Thankfully, many of our readers have taken my message of
wresting control over one's nest egg to heart. This process isn't
difficult at all. All you need is an online brokerage account,
money being saved and automatically deposited into the brokerage
accounts. Then do your research and consult high-quality investment
research sites like ours at Dividend.com. Finally, develop a
discipline of putting your money to work weekly, monthly, and year
after year.
Our
Beat The Markets with Dividend Stocks
eBook Has Arrived!
We just debuted our brand new 275-page eBook, exclusively on
Dividend.com! In this digital-only book, we look ahead to 2012 and
the main factors that could affect dividend investors. A $39.95
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Dividend.com Premium
subscribers.
Beat The Markets with Dividend Stocks
contains a full economic forecast for 2012, including in-depth
analysis on 65 of the biggest dividend stocks out there. It's a
great way to get prepared for your investing next year! So head
over to the
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now to download your copy.
A Look to Next Week and a Weekend Preview
Looking ahead to next week, third quarter earnings will be very
light. The focus will likely be on the economic data as well as the
latest Wall Street analyst calls.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.