We had another down day today as Washington's finest continue to
weigh a final budget resolution. The debt ceiling drama will end in
the next few days and then we'll wait for the next "crisis" story
to come up. With a major election year slated for 2012, Washington
will remain a central theme until late next year.
Politicians tend to think career first, then special interests,
then the rest of us. We need to stay focused on building our own
nest egg through the ups and downs, and that will be the script to
follow from now until the end of time.
Getting back to the markets, we had several stocks bucking the
selling. Earnings results boosted shares of online travel play
Expedia (
EXPE
). This is a name that is better suited for aggressive investors as
the dividend yield is low. Starbucks (
SBUX
) had been higher on their news, approaching all-time highs, but
the stock closed off those levels by the close. This was a name we
had featured a while back when we were highlighting an "aggressive"
portfolio. However, investors looking for a stock that offers
decent price appreciation, you may want to keep SBUX on your radar.
If the company begins to aggressively boost its dividend, we would
give it strong consideration for our yield-oriented
"Best Dividend Stocks" List
. Another name moving up on its earnings results was Chesapeake
Energy (
CHK
). The natural gas space continues to gain momentum, but
unfortunately the stocks carry very low dividend yields and are not
names we can offer as investment recommendations. Commodity-focused
plays with very low dividend yields can be disasters for an
investors' portfolio as we saw back in 2008. You need to time those
just right.
On the flipside, we had investors heading for the exits on other
earnings plays, including shares of Eastman Chemical (
EMN
). The stock is not trading far off its all-time highs, but
investors did push the sell button following the company's earnings
report. Arch Coal (
ACI
) missed earnings estimates badly, but the stock closed down less
than 1%. The company has often been mentioned as a takeover
candidate. Drugmaker Merck (
MRK
) traded lower on the company's subdued guidance, which included
mention of the company reducing its workforce by 12-13% over the
next few years. Lastly, gold-mining giant Newmont Mining (
NEM
) ended in the red following results. This move is despite gold
prices continuing to hit new all-time highs. Many gold investors
have been choosing the SPDR Gold Trust (
GLD
) ETF as their weapon of choice to ride the gold price gains.
We often hear money experts preach about putting money away in
an emergency fund for those rainy days. Unfortunately for many
people today, those rainy days have already come. With the jobs
picture remaining weak, the need to put money aside for unexpected
expenses is at a critical level. Tapping credit cards during an
emergencywill just put you into a big debt hole. The ramifications
of maxing out your credit cards also puts a damper on your credit
score, which leads to higher interest rates in any loan you seek
later on.
The other area people like to tap is retirement savings, which
also sets them back financially. The best thing to do is set up a
savings account and get started putting some money away each month,
or from each paycheck, that you know you will not touch unless you
have to. Carry the balance into the next year and be sure to
maintain it, avoiding the temptation of pulling money out just
because it is sitting there. Remember, you want to maximize your
investment funds as well, especially in high quality
dividend-paying stocks which can give you some awesome returns over
time.
Every so often, I am invited to be on a radio show or other
platforms where personal finance is a main focus. One of the
biggest topics is what advice I would give to people who are living
paycheck-to-paycheck. The first order of business for people in
this situation is to identify the source of their problems, and
poor spending habits are a chief problem for most. The lackluster
job market is another legitimate concern, but few are willing to
conquer it by working a second job. Sacrifice is necessary in these
situations, and the sooner the better. Action is required whenever
a change needs to happen. The solutions are clear. You work more,
earn more, pay off your debts, and get back to the positive side of
the money ledger. If you have to work 18 hours a day to turn your
life around, then do it! I worked seven days a week for five years
when I ran my family food business. I took six days off during that
time and had no vacations. It wasn't easy, but when is sacrifice
ever easy?
Personal finance solutions are cut and dry, it's up to the
individual to want to pay the dues required to better one's current
financial place. Everyone is locked in on the debt ceiling drama
and that will raise disenchantment with many, but at the end of the
day, one needs to do all one can to be in control of their own
financial destiny. I can tell you there are millions of retired
individuals out there who are petrified at the prospect of social
security checks perhaps being held back if there is no agreement in
place by Monday. Avoid making social security your main source of
retirement income. I urge everyone to get started building new
sources of income as soon as possible. Dividend investing is a
great way to get started, regardless of whatever your age is!
Quick note - We added a great new highly-anticipated feature to
our
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Looking ahead to next week, quarterly earnings will continue to
trickle in as we get set to see how well corporate America did in
the second quarter. Watch for earnings results from the likes of
Mastercard (
MA
), Clorox (
CLX
), and Kraft Foods (
KFT
), just to name a few.
Be sure to catch up with our latest watchlist updates this
weekend on
Dividend.com Premium
, including reports on earnings/story stocks, analyst
upgrades/downgrades, dividend ETFs, and much more. And as always,
you can view our current recommendations on our industry-leading
"Best Dividend Stocks" List
.
Thanks for your support everybody and thanks for reading my
newsletter too! Please pass this on to anyone you think we can get
inspired and educated about building wealth and using common sense
to do so.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.