Earnings season is often the most dangerous time to be a trader.
For dividend investors, however, the market's reaction to earnings
reports can present a welcome opportunity. If a stock gets beat up
for just meeting analyst estimates, we'll sometimes see momentum
traders scamper for the exits over several days, making stocks
we've been watching much more enticing.
Much like yesterday, today's market action was to the upside,
making it tougher to find solid entry points. Despite that fact, we
will not hesitate to make a move if we like a dividend stock's
prospects near and longer-term.
The market acted well, despite several well-known financial
names reporting disappointing numbers. The names that didn't
participate in today's rally included State Street Corp (
), Bank of NY Mellon (
), PNC Financial (
), and Northern Trust (
). The one financial name that did enjoy nice gains was Goldman
easily beat analyst EPS estimates
. Wall Street analyst upgrades also moved the tape higher for the
likes of Kraft Foods (
) and Ralph Lauren Corp (
) (read more about these upgrades
). Also moving up strong today were semiconductor plays, following
a positive report from Linear Technology (
). Being pushed higher as well were shares of Altera Corp (
), Analog Devices (
), and Texas Instruments (
Now here's a word of caution when it comes to analyst calls
during earnings season. I've seen many instances where analysts
like to play "catch-up" as far as earnings estimates go, either by
raising or cutting numbers just before a particular company's
report, only to see the stock move in the opposite direction (stock
rallies on a bad report or declines on a good report). So again,
just keep this factor in mind as you evaluate stocks that may be on
your watch list.
Who You Calling Rich?
Have you ever been a part of a conversation when someone decides
to anoint a particular individual with the "rich" label? There's
not really anything wrong with it, except for when the next part of
the conversation moves on to discrediting how he/she was able to
get in their particular position.
Sure, sometimes people born into wealth squander their head
start and blow their family's fortune. Those folks are in the
extreme minority, however. The vast majority of "rich" people I've
known have accumulated wealth as a result of taking risks, working
very hard, and spending and investing their money wisely over time.
These factors are present no matter what avenue people travel down
toward building wealth.
Another mistake people often make when discussing "rich" people
is assuming how "lucky" they are. Again, most people have built
fortunes through hard work and sacrifice. Luck usually has very
little to do with it.
Finally, I urge you to be wary about how you discuss the wealthy
around children. Young people are very impressionable, and the last
thing you want to do is attach a negative stigma to those with
money. As I've outlined in this newsletter, building wealth over
the long term is not that difficult. Make sure your children or
grandchildren understand that. Encourage them to dream big!
I tend to excuse myself whenever a negative cloud begins to
build about how or why someone is "financially fortunate." I
exercise my mental muscles each day along my own path to wealth, so
why sit among company who will only discredit my goals?
Story Behind Every Statue
Whether viewing a religious statue, a statue of a world leader
or politician, or one of a great athlete, all of these monuments
have stories behind them. Most of us will never have a statue
erected in our memory, but many people build their own kinds of
"statues" to commemorate their accomplishments.
Some will buy a shiny new (or classic) sports car. Others will
purchase that massive home they've always dreamed of. Still others
will eye up that gold Rolex as a reward for their hard work.
There's nothing wrong with desiring these dream objects. Just be
sure you've first invested your money wisely in assets that produce
income. Once you've built up the financial wherewithal to buy some
much-deserved "toys," then enjoy yourself!
Income, Income, Income
At Dividend.com, we maintain our focus on the best
income-producing investments the markets have to offer during time
of heightened volatility. We want to make sure we have only the
most pullback-resistant names on our
Best Dividend Stocks List
. Also, if we see the market putting in what looks like a decent
bottom, we will be prepared to scale up the list of stocks we like.
Stay tuned and be sure to look for
member alerts along the way. Don't count on the government or your
employer to set you up for a remarkable retirement. Take control,
do your own research, and achieve your goals yourself!
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Thanks for reading everybody. I'll see you tomorrow!
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