The markets got off to their usual sunny start to the week (as
has been the recent trend), but were not able to hold those early
highs.
The earnings stories were light today, but the rest of the week
will be jam-packed. Halliburton (
HAL
) shares ended lower following
the oil-services giants' earnings results
. Elsewhere, a couple of Wall Street analyst calls inspiring some
investor moves. Shares of Blackrock (
BLK
) were higher on some positive commentary, while stocks like Amgen
(
AMGN
), ConocoPhillips (
COP
), and Procter & Gamble (
PG
) witnessed a bit of selling on valuation concerns. Financials
continued to hold up well with Prudential (
PRU
) and Deustche-Bank (
DK
) seeing some of the better percentage gains in the sector
today.
Media Continues to Focus on Yield
Barron's magazine once again had a big dividend piece in this
past weekend's issue. The focus was on companies that currently
don't pay a dividend, but have the cash hoard to do so. We've
published some similar articles in the past and agree it would be
nice to see more brands take the dividend step.
A very good point made in the Barron's article is how companies
now see dividend yields as a key to keeping a healthy-looking stock
price. A plethora of well-known brands yield right around 2%, but
many of their share prices have run up substantially. The problem
is, long-term valuations have come into question for some of these
names. Paying 20 times earnings for food-based companies and 17-18
times earnings for utility names generally doesn't bode well for a
portfolio's long-term returns. That's why we remain a bit more
cautious than all the rest of the financial media that have just
recently discovered how great dividend investing can be.
We're closely monitoring all the latest earnings developments
and keeping an eye on valuations in our continued effort to make
sure the
Best Dividend Stocks List
is up-to-date for anyone looking to deploy new capital.
The Average Worker is In Trouble
Everyone knows I'm a big fan of developing a special set of
skills for the industry you're working in. Remember, when your work
is just "average," meaning you routinely make mistakes, you'll
never be far from the firing line.
Here's a classic example. I'm a frequent customer of a local
bagel shop. The new owner recently opened a new satellite store
that is more convenient for me to visit when I do my early morning
weekend errands.
I went into the new location and placed my order, then left to
run my other errands. The bagel shop is notorious for being a bit
slow whenever you need something done on the grill. No big deal. I
ordered three things, two of the same and one other breakfast
sandwich. When I came back in to pick my order up, the boss was
putting the items in the bag, but there were only two sandwiches
going in. The person who had taken my order was back by the grill,
but had forgotten to make the third item (which also happened to be
the most expensive one). Since I was pressed for time, I just
grabbed what was ready. As I was paying for my order, I could hear
the boss mumbling under her breath about this particular worker
once again making a mistake. I'm sure there are ways to organize
the business to avoid mistakes, but when a certain worker
continually makes these gaffes, at some point the owner will be
forced to make a change.
You see, when you do average work, you become expendable.
Eventually you'll be on the chopping block, many times to be
replaced by a cheaper option. When you develop a special set of
skills, on the other hand, any boss would think twice about letting
a great talent go elsewhere.
I bring the subject of career up often because it is the
foundation of where our investment dollars come from. Despite the
jobs numbers getting better, I believe there are wholesale changes
happening in today's workforce and with that I see job
opportunities to make big money dwindling for the masses, unless
you acquire and develop a special skill set that is needed in
today's world. With declining education-based scores in the U.S.,
many of our young generation may be on the outside looking in when
it comes to global opportunities if there is not enough emphasis
placed on schoolwork and education. This needs to come from the
home front as much as from anywhere else.
Start-ups being staffed by as few as a dozen or two motivated
employees can use today's technologies and tools to revolutionize
industries and change the landscape of business. This is good for
those early investors and individuals taking part, but in the end,
there will be a price to pay. Average workers are going to be in
financial danger, whether it is from a wage standpoint or
employment opportunity standpoint.
From an investing perspective, you cannot ignore the changes
taking place today, especially if you're looking to achieve great
investment results from your dividend holdings. Talking to some
retail investors recently, many were stunned at the news of Eastman
Kodak filing bankruptcy last week. I told these folks to prepare
for plenty of other well-known brands heading down the same road in
the years ahead - probably a lot more than some market-watchers
expect. Avoiding these investment traps is one thing we strive for
at all times. As always, we'll sound the warning bell to
Dividend.com Premium
subscribers whenever necessary.
Our
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I hope everyone had a chance to check out our
Dividend.com Premium
members-only weekend articles , including new features that
highlight some of the biggest winners and losers from the week that
was, such as analyst upgrades/downgrades and earnings/story stocks.
These articles are a great way to catch up on the week that was in
the markets. We also have a rundown of how various Dividend ETFs
performed on the week.
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
.