Another day, another glut of economic data for us to sift
through. The last few months have seen very little cohesiveness
regarding the various data reports. In fact, many reports have been
in direct conflict with others.
Today's private sector jobs number looked decent, but the
unemployment number coming out Friday could easily wind up painting
a very different picture. This same phenomenon happened last month
and many traders were caught on the wrong side of that report. It
doesn't stop there - as we progress through the numerous earnings
report out this quarter, we see a lot of inconsistencies that
require our deepest scrutiny. Take this morning for example.
MasterCard (
MA
) came out with a big earnings beat, indicating that consumer
spending is rising, while the most recent consumer spending report
(which came out yesterday, mind you) showed the lowest consumer
spending levels in two years. To paraphrase Jerry Seinfeld, "What's
the deal with that?"
As investors, we need to do our best to break down these key
reports. That's what we concentrate on here at Dividend.com every
day. Always remember that flexibility - the ability to adjust to
market fluctuations - is our greatest asset.
In that vein, we continue to fine-tune our
Best Dividend Stocks List
, and this morning we downgraded two more stocks that we'd like to
wait for better entry points on. Be sure to check out
the post from earlier today
to see which names they were.
It looked like we were headed for a 9th straight day of losses,
but buyers stepped in to pick up some inventory. Getting to some of
the stocks moving on news today, we saw MasterCard (
MA
) buck the early selling and running higher, taking along
competitor Visa (
V
) for the ride. On the flipside, we saw high yield telecom play
CenturyLink (
CTL
) end 6% lower following the company's earnings results. We're
becoming increasingly concerned about CTL's ability to maintain its
current dividend payout level as the weakness in this stock
continues. We prefer Verizon (
VZ
) and AT&T (
T
) for anyone looking to get exposure to the telecom space and are
looking for above-average yield. Elsewhere, Time Warner (
TWX
) shares ended lower despite the company beating estimates
following recent success from summer blockbuster "Hangover 2″ and
the build-up to the final Harry Potter film. Beverage plays like
Coca-Cola (
KO
) and Pepsico (
PEP
) attracted some of the afternoon buying we witnessed.
Our main focus is on quality dividend names with attractive
yields, and this should be the main focus for all those that are
hoping to build income for the long-term. Stocks with good yields
help stabilize shares and provide above-average returns, which
becomes increasingly important during periods of market volatility
like we've seen over the past few weeks. We will continue to parse
through our data to make sure the names we like best remain on our
recommended list. If we take off higher-yield names, it is not a
sell call unless we say it is. We just want to have the best names
from a risk/reward standpoint on our recommended list for new money
at all times. Investors should however utilize a sell strategy in
the event a company you own drops 25% and there are
company-specific problems that could cause significant
underperformance for that particular stock.
For dividend investors, market pullbacks provide an opportunity
to put your money to work and not have to chase your targets during
what have seemed like endless up days. The hard part for investors
on days like today is to actually make a move. People tend to want
to wait for the selling to stop. There is nothing wrong with that,
but understand that you don't ever have to take full positions when
entering stock positions. Scaling in is the best way to get
exposure, especially if your gut tells you that we could be headed
for a mini-correction. The idea of getting all out of the market
requires the best of timing, but will also require the best of
timing as to when the bottom is hit, and you will at some point
need to get back in.
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.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.