As far as the markets went for much of morning, I think one word
would sum things up perfectly: "trendless." However as the
afternoon went on, we did see a bit of buying from investors.
Looking at some of the day's big movers, we saw a bit of bounce
for recently beaten-up commodity and financial plays, including CF
), Joy Global (
), JP Morgan (
), Capital One Financial (
), and Prudential (
). Starbucks (
) shares fell following news of the company's $100 million bakery
acquisition. Also selling off were shares of Fastenal (
) following the company's May sales guidance. Their news also hurt
shares of competitor W.W. Grainger (
Dividend Stock Removed from Recommended List
We removed a dividend stock from our
Best Dividend Stocks List
this morning. We still like the name, but would wait to add new
money to the shares for now. Check out the name we downgraded
Private Markets Continue to Send a Positive Signal?
Despite the recent pullback in the public stock markets, the
private markets, where start-ups are growing and disrupting current
industries, are still running strong. Companies in the private
space are still being acquired for significant multiples of
revenue. Many companies are also able to raise tens and even
hundreds of millions of dollars in financing.
I like to follow this development because it relates to the
public markets. Public companies are clearly still confident paying
a premium for much smaller entities. Granted, some acquisitions may
be out of fear that upstart companies could disrupt the acquirer's
current business. When the spigot is finally shut off to these
private acquisition targets, it could then be a sign that
valuations (both public and private) may have some downside. We
haven't seen anything to indicate a slowdown yet, however.
Getting Back in the Box
It's been quite an eventful year helping coach my son's baseball
team. One player in particular has had the misfortune of being hit
by opposing pitchers multiple times, mostly early in the season. As
a result, this young man stopped swinging the bat altogether.
Instead, he simply jumps out of the batters' box each time a pitch
The other coaches and I have worked on getting him to avoid this
"bailing out" behavior. The process hasn't been easy, of course. As
time went on, however, the young man began developing some
confidence and actually swung the bat again. Even though he's
struck out a couple of times, it's clear he's been making strides.
Toward the end of one recent game, he drew a walk from the pitcher.
Later in the inning, he came flying around the bases and scored a
big run for us. He got to the bench and his teammates met him with
high fives and praise. All he had to do was get back in the box and
start swinging again!
For investors, the recent market pullback is similar to being
hit by a pitch in baseball. It stings to see shares of companies
you own fall. Just remember, with dividend stocks, the gial isn't
to see instant profits following a purchase. Instead, dividend
investing is about buying income-producing assets as part of your
long-term wealth-building plan.
So if you've become gun-shy following the recent market
downturn, I suggest you try getting back into the box. Don't be
afraid to swing the bat again just because you've been hit a few
Manning the Controls
As the markets continue to gyrate, we're dedicate to making any
and all ratings changes necessary to ensure investors that are
committing new capital only to the best possible dividend stocks.
If we think a stock needs to be removed and profits be taken, we'll
make the call. If we think a recent recommendation needs to come
off sooner than one would expect, but is still a name worth
holding, we'll make the "hold" call. We are closely tracking the
indices, fundamentals, economic data, and other factors that can
affect the markets - you can be assured of that.
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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