Market Wrap-Up for Jan.11 (AA, LEN, WLT, FLR, BEN, more)

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With the release of Alcoa's ( AA ) results last night, investors should be getting primed for the deluge of earnings reports due out for the first quarter.

The response to Alcoa's numbers were muted, but homebuilder Lennar Corp ( LEN ) saw some some buyers following the company's report this morning. There is a lot of chatter going on regarding the housing market potentially building a bottom, and we saw a similar positive reaction from the markets when KB Home ( KBH ) reported last week. My gut was that the financials would be the better candidate for a decent rebound in 2011, but it may make sense to watch the homebuilders for anecdotes as well.

I still stick with my thesis on investing in real estate, which is to focus on multi-family/commercial units that throw off numbers that work each month. Buyers simply bought on the hope of price appreciation potential in the recent mania, and you see how that worked out in the end. Any price appreciation you get would be gravy if the rent-roll carries the properties and puts money in your pocket every month. Speculation in flipping condos burned many buyers the last few years and is something I would be guarded against trying. All this said, I still prefer dividend stocks for the liquidity and the fact that there are still great names that can be bought in today's market at current valuations.

Speaking of great names, we just added eight new names to our Best Dividend Stocks list today. Check out the link below if you did not read the e-mail alert we sent out earlier. We prefer investors not hurry into any names we first recommend, but instead look for entry points on pullbacks. Also, the two names that were downgraded today are not sell calls. Those downgrades simply mean that we do not advocate putting any further money into those stocks, if owned.

I'd also like to remind investors that developing a sell discipline is a must. Our general rule is anything that drops 25% from its 52-week high must be examined closely for possible trimming of shares. Too often, investors let underperforming shares pull down their portfolio results for much longer than they should.

Elsewhere in the market today, Wall Street upgrades helped lift stocks like Walter Energy ( WLT ), Fluor Corp ( FLR ), and Franklin Resources ( BEN ) higher. We are continuing to monitor the markets and economic data closely as we position our "Recommended" list to outperform as we move ahead.

If you have been fighting the rally from the March 2009 lows and are sitting on the sidelines still, I would recommend one considers scaling in slowly just to test the water. When you try and time the markets, you can sometimes put yourself in a situation where you forget how stock prices move. Remember, the focus is always on earnings looking forward and not behind. We are still finding attractive valuations as we continue to dig, but that doesn't mean there aren't areas of the markets that are way overvalued from a valuation standpoint, as I see several spots where investors could be vulnerable. Remember that fighting the tape, up or down, is a long-term losing battle.

Thanks for reading and 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 .



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: AA , BEN , FLR , LEN , WLT

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