Market Wrap-Up for May 24 (CBRL, COF, SLB, MA, GS, more)

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Five weeks ago, Goldman Sachs ( GS ) published a note advising clients to sell out of commodities. In a stark turn of events this morning, the firm came out with a call for higher oil prices through 2014. Goldman raised its Brent forecast for the end of 2012 to $140 a barrel from $120 a barrel and its 2011 year-end forecast to $120 a barrel from $105 a barrel. The analyst also hiked forecasts for a range of commodities including aluminum and nickel.

This kind of flip-flop illustrates just how difficult trading stocks can be, and reinforces my philosophy of focusing on long-term investing. If a $70 billion Wall Street firm like Goldman Sachs, with every resource at its disposal, can be so dead wrong on an issue as big as energy prices, how can small-time individual investors hope to make money in short-term trading?

Every once in a while, we'll downgrade a stock from our Best Dividend Stocks List (which simply means "no new money" in the name for now), and then we'll wind up upgrading it again a few weeks later. We make these moves based on attractive entry points and positive news flow surrounding high-quality stocks. Remember, the only names we ever talk about selling outright are the low-yielding "aggressive" plays, which we have gotten away from recently amid market volatility. In very rare cases, a "Recommended" stock may be subject to unforeseen circumstances that could affect the ability of the company to continue paying its dividend. One such case was the BP oil spill disaster, in which we urged shareholders to head to the exits on that name immediately.

Despite the bullish call on commodities, the indices finished lower. Following up on the bullish call for energy prices from Goldman Sachs, shares of Schlumberger ( SLB ), Apache Corp ( APA ), and Marathon Oil ( MRO ) traded higher, but did close off the earlier levels. Cracker Barrel ( CBRL ) investors had a tough day as the shares dropped over 12% on disappointing quarterly earnings. Financials continue to be mired in a slump, with even recent winners Mastercard ( MA ), Capital One ( COF ), and Discover Financial Services ( DFS ) seeing red on the day. Volume will likely begin to taper off as we get further into the week with Memorial Day weekend on deck.

In a paper published by the National Bureau of Economic Research which was released yesterday, nearly half of Americans say that they definitely or probably couldn't come up with $2,000 in 30 days. Ouch! Apparently the most popular methods to cope with an unexpected crisis are dipping into savings, asking for help from family and friends, using loans or credits cards, taking out payday loans, or selling possessions. None of these options are attractive from a wealth-building standpoint.

Rather than having to rely on the crisis methods mentioned above, your best bet is to set up an emergency savings account and start putting some money away each month. Carry that balance into the next year and see if you can continue the same pattern. Think of your emergency account as if you're opening a business and you need to have operating capital in place to start paying your bills from the first day on. You can drawdown the capital as needed, but always keep a minimum amount in place. Anything above the balance you save (let's say $2500 for individuals and $10K for families for starters) can be used for investing, vacations, occasional spending on something you really want to have. As your family grows and your monthly expenses grow, you will need to be sure you have at least 12 months worth of expenses covered in case of any job loss or other financial hardship.

Here's a simple layout for what you should be aiming to save for retirement while you are in your 30′s. The rule of thumb is to have 1.5- to 2-times your annual salary put away when you near the end of your 30′s. The best way to accomplish this goal is to save money in retirement-focused accounts. If your company offers a 401(k) matching program, address that first and contribute the maximum amount each year that your employer will match. Also, raise your 401(k) contributions proportionately as your annual salary increases. If you are eligible, be sure to fund a Roth IRA (or Traditional IRA) account. To qualify, you'll need to have made less than $120,000 in 2010, or $177,000 if your are married and filing jointly. The current contribution limits to an IRA account is $5,000 for people under 50 years old. You want to avoid any possible penalty of needing to use money out of your retirement accounts. Your "emergency" money should be kept in a liquid account, preferably a money market account or short-term CD that is penalty-free for early withdrawals.

If you are going to build wealth, you need to adopt the mentality of consistently buying assets that produce income. This practice requires a sacrifice in spending on material goods as a natural part of the process. Put your money to work for you early and often, rather than spending it on things you don't need.

I wanted to re-run some of the 25 investing anecdotes I discussed some time ago. Here are the first five to re-absorb as we all try and keep our money/investing skills sharp.

Investing Strategy #1 - "Keep it simple. Simple works."
This adage epitomizes dividend investing. Building up new income sources for your future is a must!

Investing Strategy #2 - "Learn to think for yourself. Trust your gut."
I often get asked for personal advice on what to buy or sell, and when. Learning to fend for yourself is a must, and isn't hard to do when it comes to a dividend stock investing strategy. Keep reading our site and my newsletter and you will be as smart as you have to be to succeed.

Investing Strategy #3 - "Focus on things that help you make money in investing/trading; tune-out all the noise about day-to-day news & opinions."
This is a point I stress often. If you enjoy watching business television and checking stock quotes, that's fine as long as you don't get the urge to constantly maneuver in and out of the markets. I used to spend hours a day watching CNBC and skipping around from site to site looking for stock ideas early in my trading career, but it never did me any good. The true key to my success in investing was to spend time coming up with strategies and techniques to better my investment returns instead.

Investing Strategy #4 - "Follow the price trends rather than the pundits."
This is another big point, especially for those constantly chasing new stock ideas. At the end of the day, the stock tape is the final judge and jury to who is right and who is wrong.

Investing Strategy #5 - "Be calm, have a plan, and ride it out through the rough times."
It is tough to keep emotion out of investing, as it's just human nature to panic when things get scary. Unfortunately for many investors, they missed getting out of trouble sooner because they lacked a sell discipline.

Look for the next set of five later in the week.

Thanks for reading, and I'll see you tomorrow! P.S. Please pass this e-mail on to someone you think can use some financial motivation as well as being kept in the financial news loop that could affect them. Thanks again!

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 Nasdaq, Inc.

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This article appears in: Investing , Stocks
Referenced Symbols: APA , CBRL , COF , DFS , MRO

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