The early pop didn't last as investors absorbed
sub-par earnings results
from Alcoa (
) as well as
a profit warning
from semiconductor-equipment giant Applied Materials (
). Throw in an early afternoon pre-earnings warning from Cummins
) and the stage was set for further red.
Some of those early warnings we heard hurt some of the key
competitors in the like sectors, including Intel Corp (
) - semi's, and Caterpillar (
) - industrial equipment. A couple of highlights on the upside
bucking today's selling, included V.F. Corp (
) and Harley Davidson (
). Formula-maker Mead Johnson Nutrition (
) saw shares fall on a Chinese report a prohibited additive was
found in two batches of the company's products.
Baby Boomers Daytrading Their Retirement Accounts
I recently read a piece in the L.A. Times about baby boomers who
have been turning to daytrading their retirement funds. These folks
are risking their hard-earned money in an effort to play
"catch-up," as they feel they don't have nearly enough money saved
up for retirement. Unfortunately, more and more older individuals
have turned to an aggressive trading style in their later
A lack of retirement savings is a nationwide problem that's
getting worse by the day. So, what can we do about it? Here are a
few simple items to consider. Taxpayers age 50 and over are
eligible to make a Roth IRA catch-up contribution of an additional
$1K/year, bringing the total of their contribution to $6K annually.
And here's the thing: if you were to invest $5K per year for every
year in your 50s, each $5K you invest could turn into more than
$40K after 20 years! To be able to achieve returns like that,
quality dividend-paying stocks are a must. Historically,
dividend-payers have averaged 10-12% returns annually.
If you remember months back, Marketwatch highlighted several
methods (found below) retirees and near-retirees can implement to
extend their retirement savings:
- Trim day-to-day expenses (Not hard to do if you take the time
to go through your regular bills)
- Buy fewer luxuries (more car owners are starting to drive their
cars not only to 100K miles, but some are holding vehicles to 200K
- Limit vacations (the term "staycation" has caught fire of late,
whereas individuals are utilizing local happenings coupled with
- Leave less of an inheritance (this is a personal choice and one
that only the retiree decide upon, without the outside influence of
sometimes overly-needy offspring)
- Downsize your home (this may be the biggest financial benefit of
anything you can do)
Whatever you decide to do on this list above, the idea is to
continue looking to put money to work in assets that produce
income. For us, high-quality dividend-paying stocks are a great
solution to keep up with whatever economic situations come our
The World of "Who You Know"
I was reading an interesting (but certainly not surprising) fact
that 79% of members of Congress who left office since 1998 have
since worked as lobbyists. In a sense, you can't blame them. These
elected officials have built an important and relevant rolodex,
which they now leverage to make very large sums of money.
In our own lives, we've all probably seen times where
you know winds up being much more important than
you know. Is this fair? Of course not, but such is the way of the
I see the "who you know" scenario playing out from a very young
age. In local sports leagues, for example, it's easy to see why
certain players are picked first for all-star/travel teams (hint:
their fathers run the league or at least coach within it). Even
though other players are on par with the all-star selections from a
talent standpoint, those left out in the cold lack the "insider"
profile needed to be called upon.
This quirk of human nature continues throughout life. Office
politics are everywhere you turn, and the only real escape is to
work for yourself. I've done my best to prepare my kids for these
realities, as "who you know" matters more and more as you grow
older. The sooner they understand these facts, the less of a shock
it will be when they ultimately get their first taste of favoritism
that works against them. For would-be entrepreneurs, a slap in the
face at the office can prove to be the final straw that inspires
them to venture out on their own.
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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