The markets were able to push upward despite the latest
rumblings of bank/country debt downgrades/bailouts, etc.
Looking at some individual names, we saw positive reactions to
mid-quarter updates from the likes of Texas Instruments (
) and Agrium (
). Shares of Boeing (
) were up on a positive Wall Street analyst note. Looking at the
financials, credit card plays Capital One Financial (
) and American Express (
) paced the sector higher. After the bell, Dell Inc. (
) initiated its first-ever dividend payout, beginning in the third
quarter. The annual payout will be 32 cents, which would equate to
a nearly 2.7% dividend yield. It's certainly a long-overdue event
for the company and shareholders.
Middle Class Net Worth Takes a Hit
According to Federal Reserve data just being released, a
hypothetical family richer than half the nation's families and
poorer than the other half had a net worth of $77,300 in 2010,
compared with $126,400 in 2007. Much of the drop is being blamed on
the fall in real estate prices. You probably remember the caution I
have expressed regarding counting your home as a key
investment/asset. My definition of a solid investment is one that
produces monthly/yearly income. Unless one's residence is producing
income from tenants (multifamily units), then I would consider the
residence as a low interest rate savings account - with potential
for negative interest like we've seen in the past four years.
Another key data point was the drop in median family income to
$45,800 in 2010, down from $49,600 in 2007. Many of us have seen or
experienced the reality of a tough job market. With more people
looking for work, employers are able to fill roles at lower salary
levels. This trend is another brutal blow to the middle class. When
you factor real inflation (not the reported mumbo-jumbo government
numbers with all the exclusions) into the picture, the squeeze to
the middle class is even more evident.
The ever-changing business landscape is also affecting the jobs
market. Start-ups staffed by as few as a dozen or two motivated
employees can use today's technologies and tools to revolutionize
industries and put many others out of work. While this trend works
out great for entrepreneurs and early investors, in the end, there
will be a price to pay. Average workers will remain in financial
danger, whether from a wage standpoint or employment opportunity
The key to not falling behind even further is to tighten up
discretionary spending first and foremost. Next, adjust your living
costs and figure out how you can free up money to start investing
in assets that produce income. Working more than one job should be
given serious thought by many able-bodied folks out there.
You'd be shocked at how many people are unable to pinpoint
obvious blemishes in their financial gameplan. Young couples, for
instance, often times overextend themselves as far as living
arrangements go. Renting a two-bedroom apartment for $1,700 a month
and spending the rest of their money on entertainment goodies
(electronics, restaurants, etc.) is a fast-track to a mountain of
So take a step back and consider what you can do to improve your
finances. Freeing up the capital necessary to generate wealth is
not hard, but without action, the clock will continue to run. Time
will quickly become less of your ally and more of your concern.
How Far Will The Cheating Go?
With three kids in school and technology ever changing, it's
hard to not think about what the future holds when it comes to
education. Reading a recent article that talked about the
prevalence in cheating in online classes makes me cringe. The sad
part is that these students end up skating through, while the
hard-working students do what is asked and will sometimes get a
Of course, we all figure these cheaters will eventually get
caught, but the reality of the situation is that more and more are
sneaking through. Now you may say they are only harming themselves,
but the danger is when the cheating extends beyond education. Once
people establish a pattern of cheating to get ahead, it's difficult
to turn off the spigot.
I have often talked to my kids about their school work, and how
their hard work now will be reflected later in life. Eventually the
moment of truth will come for those cheating. At that point, a true
lack of real skills will likely backfire. We adults know that when
times get rough, it comes down to what you know and how well you
can execute on that skill that separates the real success stories
from the fly-by-night scam artists.
Whether you're considering a career for yourself, your children,
or grandchildren, the ideal fit will depend on several factors.
Perhaps the most important factor is choosing an area that
compliments your skill set. For instance, if you or a loved one is
really good with computers, you may want to look into the tech
space. Similarly, if you're good with your hands, a trade school
(plumbing, electrical) may be a good option.
Another area to focus on is the long-term value of the career.
Try to narrow your search to areas that have good future prospects
(think medical, for instance), and avoid industries on the decline.
As for specific companies to work for, I suggest looking closely at
companies that deliver consistent results and produce products or
services that people love or need.
Finally, if you're considering a change in employment, ask
yourself if a big move will help maximize your earnings potential.
If not, you may be better off sticking where you're at. The sooner
you can begin discussing these matters with your family, the
better. That way, you'll be better positioned to concentrate on
investing and building wealth!
Income, Income, Income
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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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