Market Wrap-Up for Mar.16 (CAJ, IBM, APA, BTU, CNX, more)

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With many market-watchers expecting a big bounce today, this morning's Portugal debt downgrade from Moody's and several conflicting headlines about the nuclear crisis in Japan cast a shadow over the indices for much of the day.

Investors have been used to minor one- or two-day pullbacks, but this recent selling and dip well below Dow 12K has turned some investors cautious. As I mentioned yesterday, there is nothing wrong with stepping back if you considering on waiting a few extra days or weeks to commit capital. You just don't want to start waiting months for the perfect entry point and become a market-timer. You will miss some good pullback opportunities when that happens. I don't ever preach buy, buy, buy no matter what as Wall Street pundits tend to do each time they get a chance. Sometimes bad news is bad, and you don't want to be buying what could be the proverbial "falling knife" stock.

We continue to examine our Best Dividend Stocks List closely and downgraded one stock earlier today. Be sure to check out the post below if you did not read the e-mail alert we sent out this morning.

Wall Street calls are dominating the early price movement. Some of the names that paced the way lower included Canon ( CAJ ), Qualcomm ( QCOM ), IBM Corp ( IBM ), and Apache Corp ( APA ). Bucking the downtrend and rallying were coal producers Peabody Energy ( BTU ) and Consol Energy ( CNX ).

Too often workers that don't have a 401K from their workplace feel like they are in a hole they can't climb out of when it comes to retirement planning. In life, we are going to get many obstacles thrown our way. Not having a 401K is not the end of the world. You have a phenomenal option when it comes to IRAs. You can contribute up to $5,000, or $6,000 if you are age 50 or older, to either a Roth or Traditional IRA (Some people like to split up the funds between both types to hedge what income bracket they may fall in). Traditional IRAs give you a tax break in the year you make a contribution to the account, but you'll have to pay income taxes on that money and the earnings upon withdrawal. You contribute after-tax dollars to a Roth IRA and distributions that are made after age 59 1/2 from accounts that are at least five years old are tax-free.

Traditional IRA account owners are required to take distributions from their retirement accounts each year after age 70 1/2. At that time, they will be paying taxes on their withdrawals. Some accountants prefer traditional knowing their clients get a tax break guaranteed each year they fund a Traditional IRA (Bird in the Hand!). Roth IRA account owners are not required to take annual distributions at any age. traditional IRAs levy a 10 percent penalty on distributions before age 59½, the early withdrawal penalty on Roth IRA distributions applies only to the portion of the withdrawal that comes from earnings. Traditional IRAs carry a 10 percent penalty on distributions before age 59½, as opposed to Roth IRA early withdrawals where taxes apply only on the earnings accrued.

For young people, Roth IRAs make a ton of sense. If one invests just $5000 by the time they turn 19 years of age, and did nothing else - but let's say buy dividend stocks and re-invest the dividends, they could end up with a $325K nest egg based on historical 11% returns for dividend-paying stocks after 40 years. Plus, the bonus of taking it out tax-free after they reach 59-1/2. Talk to your tax professional and get the low-down on how much your child can contribute if they have a part-time job, so as to conform to the Roth IRA contribution limits. Using some of that birthday money is also a great idea as well. The sooner you can get your kids started when it comes to learning about money and how to go about investing, the better positioned financially they will be for the long-term.

For older workers that have not been able to save yet, there is still time to build up a substantial nest egg. For instance, you can 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!

Dividend investors that are looking for income should be looking for opportunities in companies that are currently on our Best Dividend Stocks List . If you are trading these names, then you may not be interested in what the aim of our site is. We do feature some growth-related dividend plays for those looking to be aggressive, but not for day-trading types. Our main focus is on quality dividend names with attractive yields, and this should be the main focus for all those that are hoping to build income for the long-term. We will continue to parse through our data to make sure the names we like best remain on our recommended list. When we take off non-aggressive higher-yield names, it is not a sell call unless we say it is. We just want to have the best names from a risk/reward standpoint on our recommended list for new money at all times. Investors should however utilize a sell strategy in the event a company you own drops 25% and there are company-specific problems that could cause significant underperformance for that particular stock.

Legendary personal finance guru Suze Orman's new book "The Money Class" came out last week and is already climbing near the top of the best-sellers' list. We know Suze has been pounding the table on dividend investing and much to our delight, on top of page 274 in her new book, Suze wrote the following:

"One of the sources I use to pick good quality dividend stocks for my own portfolio is the newsletter published by Founder Paul Rubillo writes a newsletter that is full of great information and is easy to understand. Not only does Paul offer tips on what to buy, but he also shares his insights on when a stock should be sold as well."
-Suze Orman, The Money Class, pg. 274

It's a really great feeling to have Suze say such positive things about us, as well as dividend investing in general!

As you may know, my "Be a Dividend Millionaire" book release has been moved up to April 14th! I hope everyone can grab a copy (and maybe some extra copies to give to others). One last thing, please pass this newsletter on to any family, friends, or colleagues that you think could benefit from it. Word of mouth about is one of the best gifts you can give us. Another final thought, what information you are absorbing in your lives can impact how you see your life? Focus on things that will continue to inspire you and maybe a bit less of things that can give you a negative slant of life. Building positive momentum will lead to many successes in life. It's a simple self-perpetuating loop that anyone can do.

Lots of great comments from subscribers as to being prepared for this recent downturn. It's a ton of work to navigate the markets, but we're up to the task!

Thanks for reading, and 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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: APA , BTU , CAJ , CNX , IBM

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