Investors were still feeling some of yesterday's euphoria after
the indices blasted through key psychological levels (Dow 13K,
Nasdaq 3K), but as the afternoon wore on, a bit of profit-taking
began to seep into the market as we closed off the day's better
levels. The big news late yesterday surrounding many financial
institutions passing the Federal Reserve's stress test was part of
the reason for the early rally.
Speaking of the financials, we did end up seeing a little
giveback from yesterday's news. Moving lower were shares of Metlife
) and Citigroup (
) (which we found out after the close had failed their respective
stress tests). Several financial names boosted their dividend
payout significantly yesterday, so be sure to check out
yesterday's members-only post
detailing all the updates. In general, we'd like to would still
like to see more yields over the 3% level before we getting too
Elsewhere, Wall Street upgrades helped move stocks like American
read more here
) and Altera Corp (
) higher. On the flipside, gold-mining shares sold off as the
yellow metal prices continue to slide. Miners leading the way lower
included Barrick Gold (
), Goldcorp (
), and Agnico-Eagle Mines (
The Quandary of a Clear Conscience
Wall Street is abuzz this morning following an Op-ed piece in
the New York Times from departing Goldman Sachs (
) executive director Greg Smith. The executive worked for Goldman
Sachs for the past 12 years and described the firm as having a
"toxic and destructive" culture in a public exit letter.
Smith wrote about how Goldman would promote employees who were
successful in convincing customers to buy products that Goldman
Sachs was trying to get rid of. He also cited other questionable
practices, including upper-level executives that referred to
clients as "muppets" on multiple occasions.
Anyone who followed the financial crisis of a couple years ago
knows Goldman Sachs came under the microscope as much as any other
firm on Wall Street. So am I shocked to hear these comments from an
insider? Not at all, and I'm sure similar things go on in every
major financial services firm on Wall Street.
The question today for many financial pundits is why it took so
long for Mr. Smith to step forward with his criticisms. Why, too,
did he cash his annual bonus checks if the spirit of his company
was so evil? Some will also wonder if Mr. Smith will use the
publicity generated from this story to garner attention for a new
venture of his, perhaps starting his own firm.
Personally, I require a clear conscience in my life. I've found
that the longer you delay putting your mind at ease, the more
skeptical the reaction will be when you ultimately do stand up for
what is right. I remember watching a VH1 special on one of my
favorite bands from the early 80′s, Journey. The lead singer Steve
Perry had a falling out with the other members and left the band
following several highly-rated albums and successful world tours.
Being a big fan of Steve Perry's talent, I was taken aback by his
statement that he never felt like he was a true part of the band.
Really, Steve? Sounds like sour grapes to me.
Point being, when you make things personal - even if you're in
the right - you'll often come off looking self-serving. The
departing Goldman Sachs executive may just learn this lesson the
hard way. The stock did close down over $4 or 3.35%.
What is the Ultimate Price to Pay?
We had a local school referendum vote in my area last night, and
for the second time in the last four months, the measure failed to
be passed by voters. The $6.9 million proposal referendum focused
on replacing the roofs and fire alarm systems at three local
elementary schools, as well as a drainage system in one of the
school's parking lot, which would then have been repaved (the area
floods often during heavy rain).
For citizens of the area who don't have children attending
school, the obvious position was to vote the measure down. Some had
penned op-ed pieces in the local paper expressing displeasure it
even came up for a second vote. Whether you have kids or not, we
all know that a building's roof will eventually need to be
replaced. Furthermore, the costs won't be any cheaper in the
future. If the roof leaks and mold grows, guess what? The job
suddenly gets more expensive. And of course, what if an antiquated
fire alarm system led to a preventable tragedy?
As I was reading the news this morning, I saw an interesting
item from a town up in Westchester County New York (a town named
Rye), which last night saw its citizens approve a $16.35 million
bond to pay for a new wing of high school science labs. When asked
why one of the voters voted yes, his response was "I'm a property
owner and I think one of the things that hold the property value is
the quality of our schools."
No one is a fan of paying more in taxes, but sometimes, you have
to think things through before you automatically reject a
proposition. The cost to taxpayers in both cases was less than a
couple hundred dollars for the year. The biggest draw for many
families to move to an area is the local school system. If that
system deteriorates, eventually what do you think happens to
property values? This cycle begs the question I began this post
with: what is the ultimate price to pay?
Thinking short-term (my taxes will go up) and not about what the
benefit will ultimately be long term (better school facilities
equals more people attracted to your area, and ultimately better
for property values) is sometimes the difference between how
successful one person is compared to another. Sometimes you have to
sacrifice short-term pain (financially or professionally) to
ultimately reach your desired destination. It took our team six
months to get our Dividend.com site and ratings system ready to
launch. It was a 24/7 sacrifice that brought in no money during
that time period. It was a price that many might have hesitated to
pay, but we are so happy we did. Like I said, the short term can
feel lousy, but once you get past that hurdle, you'll see it will
almost always be worth it in the end.
Dividend Increases Ramping Up
In case you missed it, we saw a plethora of companies raise
their dividend payouts yesterday. Be sure to check out our
daily premium post
running down all these changes.
An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our
Best Dividend Stocks List
are the names we currently like for new investor capital,
regardless of what date the stock was first recommended on. If and
when a stock is removed from the list, we will clearly state
whether the stock should be sold (which is rare but occasionally
will happen), or simply held in one's account until we see a better
entry point or catalyst.
And here's one last thing to remember about what we do here at
Dividend.com: it's not just the names that we recommend that can
help you build wealth, but also the things we try to steer you away
from that are just as important. Forget about speculative or penny
stocks, chasing unprofitable IPOs, and listening to the manic
talking heads in the business media!
Beat The Markets with Dividend Stocks
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the main factors that could affect dividend investors. A $39.95
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A Dividend Capture Strategy for Active Investors
We now offer complete U.S. dividend data for all
members, so anyone that focuses on "Dividend Capture" trading
strategies should have plenty of good stuff to research each day.
Just check our enhanced
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Speaking of dividend capture, Dividend.com Premium members can
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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