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 (
) 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 (
), which tightened its profit outlook on Friday. On the flipside,
Phillip Morris International (
) has been the tobacco standout this earnings season.
Consumer play Kimberly-Clark (
) closed down 2% following its earnings numbers out this morning.
Online broker TD Ameritrade (
) was up on reports it may make a takeover bid for rival E*Trade (
). 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 (
) 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 (
) 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
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
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
, which is the best in the business, to search for upcoming
Speaking of dividend capture,
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!
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