Market Wrap-Up for Dec.27 (AEM, GOLD, MA, V, HRB, more)

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We woke up on the East Coast to 20 inches plus of snow this morning. Couple that with a vacation week for many and the recipe for a roller-coaster day was in place. Volume finished about 40% lower than we have been seeing of late.

The last week of the year is when I would like investors to really give their portfolio a thorough check-up to see if any weeds may have over-grown. If you use my down 25% rule to start giving serious consideration to trimming a position, you should not ever have to see big losses in your portfolio. It's one thing if the market is down everywhere, but if that is not the case and you have a stock that is down over 25%, this is certainly a sign to pay attention to. It is not easy for investors to sell, but it is a discipline that one needs to have, even with dividend-paying stocks.

I have been following many of the 2011 predictions that have been coming out from various pundits and they go from the ultra-bearish to the ultra-bullish. It is fun to read these predictions, but remember that they are only that. Some pundits will be pretty accurate and some will be well-off. Be sure to check out the video Tom and I did this past Thursday, where we chime in ourselves with what we can possibly expect to see as 2011 nears.

I wanted to share with everyone that may not have heard of something called the "rule of 72″. This is great for dividend investors to know as they try and figure out how quickly your money can double. Basically take the annual percentage return - let's say the stock's price and dividend increases 12% combined in a year, you would divide 12 into 72. That means your investment in that particular stock would double in 6 years. If it returns 6% per year, it would take 12 years to double. Keep this in mind as you look to build long-term income and wealth.

Looking at today's market, we had traders looking for anything that was moving and "rare earth" stocks (MCP, REE) are continuing to attract their attention. Commodity plays have been a favorite for active investors, so long-term positions in the sector need to be evaluated carefully. Gold-mining plays continue to have me concerned. Looking at the stock price action in RandGold Resources ( GOLD ) and Agnico-Eagle Mines ( AEM ) has me worried that the crowded gold trade could be taking on water soon. If you are sitting on nice profits, be sure to protect your positions with stop-loss orders. I still see the gold move as better suited for traders and not long-term investors. Elsewhere, Visa ( V ) and Mastercard ( MA ) had a good day, despite the snowstorm putting a big dent into after-Christmas sales. It was a tough day for H&R Block ( HRB ) as the company appears to be losing a key agreement for refund checks that had been in place with HSBC ( HBC ).

We will continue to look for opportunities that we feel good about adding to our "recommended" list, and will keep subscribers updated as to any new names, or names that we feel should go back to the sidelines when it comes to new capital or further investments in.

Back to the outdoors and more shoveling so some of us can make it into the office sometime this week! Thanks for reading and I'll talk to 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 .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: AEM , GOLD , HBC , HRB , MA

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