We saw a bit of a replay of yesterday's global economic concerns
for the markets today. Equities and commodity prices ended lower
across the board, but we did close off the day's lows.
Some top commodity-related names seeing red included
) and Halliburton (
), which caught some
cautious analyst commentary
this morning. This move comes on the heels of competitor Baker
cautious comments about the oil-services space
Tuesday. Elsewhere in the commodity space, shares of Freeport
) and Cliffs Natural Resources (
) also experienced a fair share of investor selling.
Big news out of McDonald's (
) this morning that its
CEO Jim Skinner will step down
this summer after leading the company's turnaround beginning in
2004. Mr. Skinner's career is quite an amazing story. He started
with the company in 1971 as a restaurant manager trainee after
spending 10 years serving in the U.S. Navy. He never even graduated
from college, but quickly rose through the ranks and became
arguably the company's greatest top executive in history. The
company's current COO (chief operating officer), Don Thompson, is
set to take over on July 1.
On the earnings front, shares of FedEx (
) fell 3.5% on
the company's mixed guidance
, while shares of credit card services play, Discover Financial
) bucked the overall selling, ending the day 3% higher following
their earnings release
Local News - Where
to Turn for Financial Information
Anyone that has read my work knows that I am not the biggest fan
of how the business media portrays investing (they tend to cater
only to manic day traders). Well, my biggest pet peeve is how
off-target local news coverage is when it comes to discussing or
covering the economy. Whether it's local or national finance
stories, these folks are often just plain clueless.
Here's a great example. I was reading my local paper today, and
noticed a front page story story claiming that housing sales had
risen both nationally and locally. I then read the article and
found these nuggets: "in January and February we had back-to-back 7
percent increases in the listings coming onto the market" - which
was described as a positive. When does more inventory ever equate
to a positive when existing inventory is already too much to
handle? Then came the reality factoid: "February homes sales were
about 1 percent lower than January."
I get the fact that papers want to paint a positive picture of
the local economy, particularly from a real estate standpoint.
Papers need those advertising dollars from realtors more than ever.
But if anyone is just skimming headlines and not reading the
details, they'll be steered in the complete wrong direction.
I always urge investors to consult multiple sources of
financial/economic information. For these particular topics, I
suggest you keep your local press coverage at the bottom of your
list. Local papers can often times be the most biased - in fact,
many local presses didn't realize real estate had been plummeting
until a few years after the fact. When it comes to stocks and
investing, many local editions are realizing they can't bring much
new to the table, and are in fact cutting out much of the national
coverage/opinion/stock prices sections these days. At least they
realized these topics aren't something they should be toying
What Holds You Back From Becoming Financially Independent?
Let's look at some key factors that stand in the way of many
people seeking financial independence.
1. The "Dilly Dally" effect - Too many of us are always putting
off the necessary changes that need to be made regarding how we
manage our money. I often talk about automating money from your
paycheck into a brokerage account each week so you are positioned
to get money to work for you in income-producing dividend
2. Overspending - We all know someone that overindulges on the
latest tech gadget or fashion piece. Unfortunately this is part of
an overall addiction that has been built up and is tough to snap.
If you are around a group of people that just worship at the altar
of Tommy Hilfiger and Polo Ralph Lauren, it tends to be impossible
to not want to feel "left behind." Friends and family have a big
impact as to how you will perceive money.
3. Slow to Pay off Debts - Spending with plastic is easy, but
once the "minimum due" invoices come in, you start the bad process
of extending out your debt every month. Credit card companies just
love this and you become a slave to their process in no time.
4. Trying to Get Rich Quick - often times this is the disaster
event that knocks someone's finances for a loop. The no-brainer
business/stock investment with a friend who promises they have the
golden ticket to riches. The sure and steady way is to get compound
interest to work as your weapon.
When I was on Stu Taylor's Equity Strategies radio show a while
back, we discussed the options if you are older and have not saved
a dime yet. Let's say you just turned 50 and you looked at your
income statement and there is nothing but a $0 at the bottom of the
page. You actually still have plenty of time to build a solid 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 (Based on an
historical 11% average annual return for dividend-paying stocks).
So you see, it's never too late to get started as long as you're
investing in the right dividend-paying stocks!
New MLP Report Just Released!
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- Understanding their unique company structure
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25 Years of Dividend-Increasing Stocks
We recently updated our list of dividend stocks that have been
paying out dividends for 25 years or more. Be sure to check out
the latest list of names here
Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the
difference dividend payouts made in the overall return investors
saw throughout the prior decades. Here are some of the
- The Nasdaq is down 28% since the end of 1999. Even the "blue
chip" S&P 500 stocks are down 15% during that time frame…until
you add back those "boring" dividends. With dividends included, the
S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a
loss for the 25 long years from August 1929 to August 1954. Then
again, without dividends, the S&P 500 produced a 5% loss during
the 13 years from September 1961 to September 1974. But with
dividends included, the S&P's loss became a 46% gain.
- Over the course of the last half-century, dividends have
contributed more than half of the stock market's total return -
56%, to be exact.
Of course, you can't discuss the potency of dividend investing
without making mention of how awesome compound returns are. I can't
stress enough the power of compound interest: you take a small
amount of money and turn it into a large amount over time. Finding
the right companies at the right price points which not only grow
earnings, but also grow their dividend payouts as well!
New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist
Names post that is out today, exclusively for
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
Go Beyond This Newsletter
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Thanks for reading, and I'll see you tomorrow!
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