After yesterday's Fed announcement that interest rates will
remain historically low for another couple of years (at a minimum),
commodity prices instantly shot higher. The trend continued into
today as gold prices (
) and other commodities raked up further gains, but this time, with
equity prices falling by the close.
The Fed is clearly intent on trying to reflate the economy with
its massive dollar printing strategy. The impact on savers who
haven't put their money to work in the stock market has been
catastrophic, however. A quick check on BankRate.com reveals that a
one-year CD now yields 0.67%. That's just unbelievably low.
Meanwhile, the real estate market remains shrouded in mystery.
Some experts see the market as "bottoming," pointing to positive
signs in cities like New York, Boston, and San Francisco. Whether
the markets have recovered at all in suburban areas (i.e. where
most Americans live) remains to be seen.
It's obvious that just like the stock market, the real estate
market has a narrow window of winners, or areas that see any
meaningful price increases. If the Fed expects the tide to lift all
boats, it may be in for a disappointment. The actual result could
be simply more of the same, with real estate sitting in the
doldrums, while savers continue to be punished with low interest
Many retired folks will need to dip into their principal in this
environment, which is never a good sign. That's why it's so
important for investors of every age to generate income from a
strong basket of dividend stocks. We are doing our best to find the
names that can work at the current time, and we hope the market can
ease up a bit with the dividend plays that have gotten overbought.
Hopefully we'll see some better entry points in the near future.
Chasing yield is not a game we recommend, so being selective and
patient is key. We did find a new name we liked this morning, so be
sure to check out the link below for more on that upgrade.
Today was another big day for earnings results. Share price
winners included Zimmer Holdings (
), Caterpillar (
read the report here
), Colgate-Palmolive (
), Mead Johnson Nutrition (
), Sherwin Williams (
), and Time Warner Cable (
). On the flip side, we saw down moves following earnings results
from Eaton Corp (
), Automatic Data Processing (
), AT&T (
) and Peabody Energy (
New Dividend Stock Recommended Today!
We just upgraded a new dividend stock this morning onto our
Best Dividend Stocks List
. Be sure to check out
post detailing the upgrade
if you haven't already.
How Will Our Place in History Be Defined?
We recently saw the passing of legendary Penn State college
football coach Joe Paterno. Anyone who has been watching the news
surrounding Penn State and the heinous scandal there knows Joe
Paterno was dismissed from his post a few months ago. That move
followed a growing chorus of individuals who felt the 85-year old
coach didn't take the proper steps to address the child molestation
accusations against his former assistant coach, Jerry Sandusky.
Whether you are coaching a sports team, running a company, or
have any other position of great responsibility, you can never lose
sight of the goings on all around you. You have to put the proper
procedures in place to make sure you don't ever let decades of hard
work get tainted by the imbroglio of any person or persons in your
Mr. Paterno is not the first and will not be the last legend
whose legacy is tainted by scandal. It's not just older folks who
are at risk, either. Just look at all the recent athletes whose
career achievements have been undermined by suspicions of
performance-enhancing drugs. The pursuit of greatness can sometimes
push people into situations they no longer can control. Short-term
accolades are put ahead of the possibility of long-term harm.
There's nothing wrong with striving for success. In fact, I urge
you to aim high and work hard to achieve your goals. Just ask
yourself from time to time, what price are you willing to pay for
success? Will you assume much greater risk in order to try and "get
ahead" more quickly? Would you jeopardize your legacy or reputation
by taking a short cut to the top? I certainly hope we all keep
these questions in mind as we continue down our road to
New MLP Report Just Released!
The Essentials of Investing in MLPs
, we outline the do's and don'ts of investing in high-yield Master
Limited Partnerships (MLPs). Our exclusive new MLP report outlines
everything you need to know about these popular high-yield
- Understanding their unique company structure
- What you absolutely need to know about their special tax
- Why MLPs may not be suitable for retirement accounts
- How to find the best high-yield partnerships
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Head to the
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25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been
paying out dividends for 25 years or more. Be sure to check out
the latest list of names here
Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the
difference dividend payouts made in the overall return investors
saw throughout the prior decades. Here are some of the
- The Nasdaq is down 28% since the end of 1999. Even the "blue
chip" S&P 500 stocks are down 15% during that time frame…until
you add back those "boring" dividends. With dividends included, the
S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a
loss for the 25 long years from August 1929 to August 1954. Then
again, without dividends, the S&P 500 produced a 5% loss during
the 13 years from September 1961 to September 1974. But with
dividends included, the S&P's loss became a 46% gain.
- Over the course of the last half-century, dividends have
contributed more than half of the stock market's total return -
56%, to be exact.
Of course, you can't discuss the potency of dividend investing
without making mention of how awesome compound returns are. I can't
stress enough the power of compound interest: you take a small
amount of money and turn it into a large amount over time. Finding
the right companies at the right price points which not only grow
earnings, but also grow their dividend payouts as well!
New Watchlist Article Out Today
Be sure to check out our weekly
Top 50 High-Yield Watchlist Names
post that is out today, exclusively for
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
Go Beyond This Newsletter
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Best Dividend Stocks List
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- Finally, we offer the most complete and easy-to-use dividend
data on the web. Many subscribers use this data as part of a
"Dividend Capture" trading strategy, but long-term investors can
use it to keep track of impending payouts. Just visit our
for a complete outlook on which companies will be paying out
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Thanks for reading, and I'll see you tomorrow!
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Best Dividend Stocks
, as well as a detailed explanation of
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