Yesterday's rally seemed like a distant memory today as
continuing concerns surrounding Europe's debt and the Spanish
banking crisis linger. Several economic data points here in the
U.S. this morning also weighed on the markets. Visa (
reporting lower payment volume in April surprised some
Also, pending home sales data showed the biggest drop we have seen
in a year. This new data of course runs counter to the constant
bottom calls surrounding real estate prices.
Looking at the sectors leading the way lower, financials were
pacing the losses with names like Deutsche Bank (
), Citigroup (
), Morgan Stanley (
), and Goldman Sachs (
) trading in the red. Wall Street analyst downgrades also pulled
down shares of Agnico-Eagle Mines (
), Chevron (
), and Darden Restaurants (
). Looking deeper, we are also seeing energy prices resume their
recent pullback. We have maintained a low exposure to the energy
sector for the past several months, as we anticipated oil prices
would eventually join in on the general state of global economic
weakness (which it has - oil prices are down 20% in the past three
Two Dividend Stocks Removed from Recommended List
We removed two dividend stocks from our
"Best Dividend Stocks"
list this morning. We still like both names long-term, but we are
cautious in the short-term. Check out the names removed
"Compounding" Investor Behavior to Avoid
You've probably read plenty of anecdotes about how compound
interest is the ultimate investor weapon in building long-term
wealth, but here's a twist on how a different kind of compounding
behavior can work against investors. In the last month or so, we
have seen the markets pull back much more than in the past 6-12
months. As enticing as it may be to cut and run (selling stocks and
moving to the sidelines in anticipation of better price entries),
the idea anyone can successfully pull off selling at the top or
buying at the bottom is always easier said than done.
This behavior of trying to time the markets tends to compound
over the course of weeks, and even months. All the while, you could
have been targeting the best income-producing assets (
Best Dividend Stocks
) with your capital. For the "safety and security" of earning
almost nothing, individuals continue to forfeit their ability to
create better returns for themselves. High-yield dividend stocks
(think in the 3% to 7% range) are clearly a better option than CDs
and savings accounts in the current environment - and will continue
to be for several years to come.
You can see from our actions above (removing dividend stocks we
think could potentially have more downside than the others we
currently like) that we are not oblivious to the current market
environment and are not afraid to pilot through whatever situations
arise. As I mentioned days ago, markets that race higher day after
day tend to get us more nervous than overall market pullbacks.
Investors that get too frothy tend to be the ones who feel the most
pain when the inevitable corrections come.
The Myth of Making the "Right" Decision
We all face big choices throughout the course of our lives.
Whether the decision involves career, business, investing, or
family, I find that many people place too much emphasis on that one
specific choice as the be-all, end-all. In reality, following
through on our decisions is the most important step in the
equation. It's not so much about making the "right" choice, but
instead about choosing the option we feel will work out best - as
long as we pay attention to and put our greatest effort forth.
Remember, no one succeeds in every single aspect of their lives.
I know people who are great with money but their family life is a
mess. I also know people who are financially unstable but have an
extremely healthy family life. I even know people with great
careers who earn good money, but fail time and time again in their
investing. Many of these folks could greatly benefit from a mentor
or advisor - be it for their career, investing, or personal lives.
The problem is, most people are generally reluctant to accept help
(or even seek it out).
The question then becomes, is it that these folks are making
wrong choices, or that they're just not following through with
their decisions? I find that in majority of cases, the latter is
true. Deciding to put money to work in dividend stocks is a great
choice, but if you don't actually put your will into action, what
have you really accomplished? Even if you make the "wrong"
decision, your future actions can turn the tide to the positive
side of things.
In the end, you must hold up your end of the bargain. Do
everything you can to make sure your life decisions work out for
the best - in your career, investing, and personal life.
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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Thanks for reading everybody. I'll see you tomorrow!
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Best Dividend Stocks
, as well as a detailed explanation of
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