Market Wrap-Up for July 25 (LO, PM, KMB, ETN, AMTD, SCHW, more)

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The markets unsurprisingly opened lower at the open today, following a weekend of bickering in Washington about raising the current debt ceiling. We began to bounce off the lows as the day wore on, but sellers prevailed by the close as we started the week on a down note.

We will likely continue to see large market swings as further news about this issue is released. If word leaks about an agreement, the markets could spike multiple times this week. This action is very similar to what we saw with the recent bailout of Greece. The market must have squeezed 4-5 rallies out of that crisis! As investors, we're not complaining about those gains, but at the end of the day, earnings will determine the true valuations of what we're paying for.

Speaking of earnings, tobacco-maker Lorillard ( LO ) pulled back after releasing their results this morning. Investors were disappointed with the results (which beat analysts' view), as was the case with its competitor Reynolds American ( RAI ), which tightened its profit outlook on Friday. On the flipside, Phillip Morris International ( PM ) has been the tobacco standout this earnings season.

Consumer play Kimberly-Clark ( KMB ) closed down 2% following its earnings numbers out this morning. Online broker TD Ameritrade ( AMTD ) was up on reports it may make a takeover bid for rival E*Trade ( ETFC ). We would be a bit more interested in the online brokerage space if the dividend yields there grew considerably. The leader in the space, Charles Schwab ( SCHW ) has been a serial underperformer for years and with a 1.5% dividend yield, the stock has been dead money for investors. Finally, power management specialist Eaton Corp ( ETN ) closed up 3% as the company continues to deliver on its results quarter after quarter.

After hearing about the demise of troubled but super-talented singer Amy Winehouse this weekend, I immediately thought about the numerous people I've known in my life that had amazing talent, but could never quite set themselves on the path of success they seemed destined for. Being a huge sports fan and being involved with my son and his baseball endeavors, it's easy to see the athletes that stand out at a young age. Kids that are talented usually play travel ball these days, going on the road several times per week - sometimes throughout the year. Many would argue that there is burnout risk for kids playing one sport basically all year, but that is what is the trend in these days of over-enthusiastic parents. We personally don't elect to go the travel league route, but it is a big deal for anyone that knows families that participate. Interestingly enough, I had a conversation with a founding head coach of our local baseball travel league recently. He mentioned how he would coach 9-year olds and thinking how great they would be by the time they reach Babe Ruth baseball (13 years and up), but he said many of them actually stopped getting better at some point, while others that were pretty good, just kept getting better and eventually reached a higher talent level.

It's funny how this concept can equate to the world of investing. A few months back when I was doing my radio tour to promote my Be a Dividend Millionaire book , I was invited on Stu Taylor's radio show to discuss older investors that have not prepared for their golden years. We talked about options for individuals who may have turned 50 years of age and had no savings whatsoever. The plan was to start maxing out a Roth IRA contribution ($5K/year currently, but in addition to the "standard" contribution limits, taxpayers age 50 and over are eligible to make a Roth IRA catch-up contribution of an additional $1K/year). If you were to invest $5K per year for every year in your 50s, each $5K you invest would turn into more than $40K after 20 years. So you see, it's never too late to get started and maybe reach the potential you always had to create wealth.

I always think back to a line in one of my favorite movies, "A Bronx Tale", where Robert DeNiro tells his son "The saddest thing in life is wasted talent. If you've got talent and do the wrong thing, nothing happens. But when you do right, good things happen." As the coach mentioned to me above, early success does not guarantee future success, so you need to remember developing talent is a life-long quest. For investors, the job of building wealth is a long one, but one that can be quite successful and awe-inspiring if you stay the course and commit to making smart choices. Amy Winehouse may have left her mark, but there was much more she could have achieved. The lessons in life are around us every day in one form or another. Let us not forget them.

I hope everyone had a chance to check out our Dividend.com Premium members-only weekend articles, including the new features that highlight some of the biggest winners and losers from the week that was, including 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.

Our newly-expanded dividend data is all in place now, so anyone that focuses on "Dividend Capture" strategies should have plenty of good stuff to research each day. Just check our enhanced Ex-Dividend Calendar , which is the best in the business, to search for upcoming payouts.

Speaking of dividend capture, Dividend.com Premium members can now access a new 9 page report we just released on the essential elements to any successful dividend capture strategy. Be sure to check it out!

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 .



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: AMTD , ETFC , ETN , KMB , LO

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