The markets couldn't muster up much of a trend in today's
action. It's been a fairly quiet week from an overall earnings
standpoint as we start to get most of the Q3 numbers in the books.
Volume was once again very light.
Wall Street earnings reactions helped push shares of Dillard's (
) and Brinker International (
) higher, while shares of Tim Horton's (
) and Kohl's (
) finished in the red. Meanwhile, Wall Street analyst upgrades
helped push stocks like Cisco Systems (
) and Baker Hughes (
Growing Number of Retirees on the Hook for Student Debt
SmartMoney.com just ran a piece talking about the growing number
of retirees who are seeing their social security checks getting
docked because of delinquent federal student loans. In fact, the
number has doubled from last year alone affecting roughly 115,000
retirees' Social Security checks. Deeper findings reveal the debt
is tied mostly to
education costs. In other words, parents and grandparents who
co-signed on their children's and grandchildren's student loans are
now seeing their social security checks take an automatic hit when
those loans aren't repaid.
The number of checks seeing reduced amounts is likely to spike
in the next few years, too. Roughly 2.2 million student-loan
debtors were 60 and older during the first quarter of 2012.
Unfortunately I don't see how this trend will not continue for at
least the next several years. According to a recent New York Fed
report, borrowers currently in their 20s and 30s owe roughly $600
billion in student loans.
There are other factors affecting older Americans' student loan
debt, as well. Many may have chosen a career path early in life
that didn't work out too well from a salary standpoint. Others
decided to go back to school to re-tool their skills in their 30′s,
40′s, and sometimes even in their 50′s. The hope, of course, is to
invest in a career that will eventually pay enough to wipe away the
loan debt relatively quickly.
I have been beating the drum loudly in my newsletter that
parents (and grandparents) need to get their children on some sort
of precise path regarding career options. The last thing any of us
want is to see sky-high piles of debt for the younger generation,
with little employment prospects after they do graduate. And we
certainly don't want to put our retirement nest egg in potential
jeopardy by sharing the cost of skyrocketing education costs. It's
become more and more obvious that bad choices in a young person's
professional career (or personal life, for that matter) will
eventually affect more than just their own financial and personal
Most older folks going through these situations can tell you
they never planned on being on the hook for the younger
generation's bills. Thus the importance of making sound
investment/financial decisions at every point in our lives. That
way, you'll be prepared when the unexpected does happen.
25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been
paying out dividends for 25 years or more. Be sure to check out
the latest list of names here
Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the
difference dividend payouts made in the overall return investors
saw throughout the prior decades. Here are some of the
- The Nasdaq is down 28% since the end of 1999. Even the "blue
chip" S&P 500 stocks are down 15% during that time frame…until
you add back those "boring" dividends. With dividends included, the
S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a
loss for the 25 long years from August 1929 to August 1954. Then
again, without dividends, the S&P 500 produced a 5% loss during
the 13 years from September 1961 to September 1974. But with
dividends included, the S&P's loss became a 46% gain.
- Over the course of the last half-century, dividends have
contributed more than half of the stock market's total return -
56%, to be exact.
Of course, you can't discuss the potency of dividend investing
without making mention of how awesome compound returns are. I can't
stress enough the power of compound interest: you take a small
amount of money and turn it into a large amount over time. Finding
the right companies at the right price points which not only grow
earnings, but also grow their dividend payouts as well!
New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist
Names post that is out today, exclusively for
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
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Thanks for reading, and I'll see you tomorrow!
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