Some of the recent late-day selling may have gotten a few
investors nervous to get too long into today's action, and as the
result, the markets meandered for much of the session.
We did have some big-name earnings plays capturing investors'
attention. On the upside, Walt Disney (
), Macy's (
), and Computer Sciences (
) all posted gains on their reports. Meanwhile, Ralph Lauren (
) closed down on
, while shares of fast-food giant McDonald's (
) sold off following
the company's July sales update
) surprisingly came out with some upside guidance for this next
quarter, but the shares could only manage a 2% gain, or $.45 on the
news. Many a "value" player has taken a stab at catching the bottom
in HPQ, but the proverbial bottom has remained elusive. Finally,
shares of online travel giant Priceline (
) are down $108, or -16%, on earnings news that momentum traders
couldn't sell fast enough on. If you remember, the same thing
happened to Chipotle (
) a while back, and the long traders took a triple digit hit there
as well. We know the business media makes it look sexy to want own
momentum plays, but all too often, retail investors get caught
buying the tail end of the euphoria or earnings peak. Trading is a
tough game, and has only gotten harder the last few years.
Historic and Quite Negative Shift Begins for Social Security
According to a study by the Associated Press, individuals
retiring today will be part of the first generation of workers who
have paid more in Social Security taxes during their careers than
they will receive in benefits after they retire. Part of the
findings included a 2011 study by the Urban Institute, highlighting
the fact that a married couple retiring last year, which earned
average lifetime wages, paid about $598,000 in Social Security
taxes during their careers. This couple can expect to collect about
$556,000 in benefits, but that total is dependent on the man living
to 82 and the woman living to 85.
The number of recipients collecting social security currently is
around 56 million, but that number is expected to grow to 91
million by 2035. Needless to say, those retiring in the next few
decades can expect to get a lower percentage back of what one would
have paid in. If the recent trend continues, it's even possible
that today's youth may never collect any Social Security benefits,
despite paying hundreds of thousands into the system
Judging from this latest data, all we can continue to say is
investors need to remain proactive in seeking out assets
that can produce income
to make up for any potential financial shortfalls that can come our
way as we get older. As the cost of everyday items we need to shell
out money for continues to rise precipitously (food, gas, any type
of taxes associated with income or property, etc.), this fact is
all the more important. The current ultra-low interest rate
environment is certainly propping up commodity prices, and those
costs are being passed along to many ,of us. We know the banks are
able to make their numbers as long as rates stay low (we hope
anyway, as the banking business is not as attractive as once was),
but for savers and those who prefer to avoid risk, that luxury can
no longer be afforded. Stay in cash and lose out to inflation. Park
your money in a savings account, money market, or CD, and get paid
nearly nothing to do so.
Clearly, we all need to work harder and longer than ever - and
invest our money much more wisely - if we're going to stay ahead of
the retirement game.
Where is the Big Money Parking Cash?
I just read bout Google (
) (which is sitting on $40 billion in cash) recently investing
hundreds of millions of dollars into asset-backed securities, tied
largely to automobile loans and consumer credit-card payments.
According to recent data from the Wall Street Journal, the auto
portion of an ABS index compiled by Barclays has returned 2.34%
this year on deals with an average maturity of just over two years.
That compares with 0.30% for comparable Treasurys this year. So you
see, low interest rates are causing all sorts of trouble for
companies sitting on cash hoards, big or small.
The conclusion for investors as we see it is to remain
super-selective, but at the same time, realize that doing nothing
is not a long-term solution. There is a point to where chasing
yield can eventually get you hurt. We are diligently analyzing that
very topic every day as we consider new high-quality dividend stock
An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our
Best Dividend Stocks List
are the names we currently like for new investor capital,
regardless of what date the stock was first recommended on. If and
when a stock is removed from the list, we will clearly state
whether the stock should be sold (which is rare but occasionally
will happen), or simply held in one's account until we see a better
entry point or catalyst.
And here's one last thing to remember about what we do here at
Dividend.com: it's not just the names that we recommend that can
help you build wealth, but also the things we try to steer you away
from that are just as important. Forget about speculative or penny
stocks, chasing unprofitable IPOs, and listening to the manic
talking heads in the business media!
Beat The Markets with Dividend Stocks
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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