The markets took quite a turn this afternoon, and it was led by
the fall in Apple (
) shares you can say (More on Apple comments I made in today's
mid-day newsletter below). Market reversals have been rare of late
and could be something momentum-style investors may want to be
paying attention to.
We had a decent number of earnings reports out today. Heading
higher on better-than-expected results were shares of Comcast (
full report here
), Dr.Pepper Snapple Group (
), and Abercrombie & Fitch (
). On the flipside, earnings results were not quite good enough for
investors of Deere & Co. (
) or Weight Watchers (
), as both names ended in the red.
Meanwhile, shares of Kellogg (
) rose on news
it will buy the "Pringles" brand
from Procter & Gamble (
Ramifications of Apple's Recent Rise
It's hard to ignore the recent move in Apple (
) shares, which I mentioned in yesterday's newsletter. The stock
has gained nearly $100 since Jan. 24 - a 22% gain in just three
weeks. Investors are fixated on the move, which has the feel of
what happened to former tech titan Qualcomm (
) shares in late 1999.
Back then, the stock went from a split-adjusted $48 on Dec. 10,
1999 to an all-time high of $88 on Dec. 31, 1999. I remember it was
all investors could talk about. QCOM's technology was primed to
explode, and analysts couldn't boost their price targets and
earnings estimates fast enough to keep up with the rising share
price. Yes, those were some wild days.
Apple is certainly locked into a similar "can-do-no-wrong"
pattern. This is where things can get pretty dangerous for
investors looking to jump into the stock with major dollars,
considering the incredible move we've seen the last three weeks.
I'm not saying Apple will follow Qualcomm's drop following the
feverish run it had, but if you are going to consider the stock on
the latest moves or the potential dividend rumor announcements, be
very careful. I urge anyone looking to trade this name to use
sell-stops to protect your capital from any potentially vicious
Take my information for what it's worth. I've been in the
markets long enough to see danger when stocks move as quickly as
Apple has. Is Apple a great company? Without question. Is its
valuation still reasonable? Actually, yes it is. But if you are
looking to add a non-dividend growth-focused name to your
portfolio, always bear in mind that the moves tend to be fast and
furious. Do your homework and avoid jumping into stocks
For our loyal dividend-focused readers, slow and steady has
proven to be the ticket to success. Why change what's been working
Has the Train Left the Station?
If you'd been sitting on the sidelines waiting for a perfect
entry point to put some money to work, you may be getting the
feeling that the proverbial train has left the station. So, has it?
The answer is almost always no. If you're a long-term investor,
just keep your eye on the prize of building income streams with
dividend stocks. Aim to put money to work each month, if
It's hard to stay focused on the long term sometimes. Business
media coverage typically focuses on stock moves over a 20-minute
period, rather than how well a stock has performed if you'd
maintained a position for several years.
If you are a person who gets emotionally wrapped up by the
noise, you can either lower the volume on the business channel or
take your shot at chasing the hot names and risk losing money when
the music inevitably stops.
Small Businesses Will Keep Payrolls Lean
Recent findings from a Wells Fargo/Gallup index survey show many
small businesses have no desire to make new hires. Businesses
indicated several reasons for not expanding, including economic
worries, additional healthcare expenses, and concerns about how
much new employees would really contribute to the bottom line.
Such is the reality of the modern job market. Padded government
statistics may have you believe otherwise, but we certainly aren't
seeing any signs of renewed hiring at the corporate level. In fact,
layoffs seem to still be the norm among Fortune 500 companies. This
trend of doing "more with less" is hard for companies to shed, so
in my opinion, real-world employment will remain a concern for
quite some time.
As always, we'll be sure to keep
subscribers updated about the potential investment ramifications
that are bound to come along with these economic shifts.
Dividend Investing Does Not Require a Special Talent
I firmly believe that everyone possesses the ability to improve
their financial situation. History is full of rags-to-riches
success stories, and the formula is pretty simple, really: buy
income-producing assets, build a great business or service, or
become an innovator in your field.
If you live within your means and your career starts on the low
end of the pay scale, then keep a tight lid on your living
expenses. Select a place you can afford to live and forgo some of
the material possessions you don't yet need. That's called
sacrifice, and almost anyone who has built themselves a fortune
will point to many sacrifices along the way as key factors in their
success. Whether you're forgoing some of the latest fashions or
gadgets, or simply working extra long hours, the road to success is
paved with sacrifice.
Finding the right strategy for investing is also essential. Of
course, we feel that dividend investing the best possible avenue
for the vast majority of all people out there. Once you've come up
with an investing game plan, putting what you've learned into
practice is the second step. We advocate investors develop a
monthly system of putting money to work in their brokerage
accounts. Automate this process as best you can, so you remove any
mental barriers. Embrace investing as a constant learning process.
Be willing to keep an eye on what your investments are doing.
Staying in the loop is an integral part of growing your money.
Just dabbling in the markets will not get you to where you need
to be. Develop a routine and stick with it! If you have a habit of
jumping in and out of the markets, dividend investing is the best
remedy for that affliction. You'll gain a new perspective on
long-term investing and the power of compound interest.
Dividend investing does not require a special talent, education
level, years of experience, luck, or much money either. It simply
requires a commitment from you as an investor that to keep
consistently put money to work in the best ideas available (that
would be from our
Best Dividend Stocks List
). It's that simple!
2011 Was a Big Year for the Dividend.com Family of Income
It is always great to see the media tip their hat to what has
been a great year for dividend-paying stocks. We've been seeing
several major media outlets publishing articles about how dividends
were a big investing theme in 2011 and likely remain so in
The truth is that we tend to see solid years more often than not
in the dividend world, but the business media focuses their
attention instead on the high-risk momentum action. Only in times
of extreme duress does the media seem to focus on our dividend
niche. Regardless, we won't be distracted from our job of finding
the best dividend names to put fresh capital into.
I'd like to thank all our
subscribers and daily newsletter (nearing 35K!) readers for helping
spread the word about our service and being part of the
Dividend.com family of investors. It means a lot to us, and telling
friends and loved ones about Dividend.com is the best possible gift
you can give to us.
Beat The Markets with Dividend Stocks
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Beat The Markets with Dividend Stocks
contains a full economic forecast for 2012, including in-depth
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A Dividend Capture Strategy for Active Investors
We now offer complete U.S. dividend data for all
members, so anyone that focuses on "Dividend Capture" trading
strategies should have plenty of good stuff to research each day.
Just check our enhanced
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Speaking of dividend capture, Dividend.com Premium members can
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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