This morning's weak GDP report and uptrending jobless claims
report had some traders heading for the exits in today's early
action, ahead of tomorrow morning's monthly unemployment report. By
mid-afternoon however, prices began to stabilize as investors saw
some better entry points in names that have come down in recent
weeks. Whether it was short-covering or real buying, it is always a
good sign to see calmer heads prevail.
Earnings are not much of a factor this week for the stock tape.
Commodity equipment play Joy Global (
JOY
) was down on
this morning's earnings release
, however. The weakness also hurt shares of competitor Caterpillar
(
CAT
).
Monthly retail sales numbers were out this morning for several
major brands. Leading the way lower for the retail sector on the
news were shares of Kohl's (
KSS
), Nordstrom Inc. (
JWN
), and the Buckle (
BKE
). On the flipside, shares of TJX Companies (
TJX
), Ross Stores (
ROST
), and Wal-Mart Stores (
WMT
) all rallied on their sales update. Finally, Wall Street analyst
downgrades put a damper on shares of Cliffs Natural Resources (
CLF
) and transports play C.H. Robinson Worldwide (
CHRW
).
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
Dividend.com Premium
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
Benefit Cuts/Bad Inflation Trending Higher
A survey by the National Endowment for Financial Education finds
40% of working adults have seen their employer-sponsored benefits
reduced or eliminated entirely over the past 5 years. Health care
costs were hit the hardest in the study. With employers cutting
back, employees shouldered more costs, including higher deductibles
and co-pays, as well as more expensive premiums.
The "bad" inflation is all around us. Go to the supermarket and
you will see how much smaller the food packages have gotten. Just
the other day, I saw potato gnocchi pasta on sale, 2 packages for
$5 (that's $1 more than the sale prices I used to pay), but here
was the catch, the size of the bag was 10 ounces - they used to be
16 ounces! I'm sure everyone out there has noticed similar price
inflation for some of their favorite food items as well. And of
course, we're still paying through the nose at the gas pump.
The Right Investor Mindset for the Current Environment
We realize that recent selling in the market has some investors
nervous, but when you look at the bulk of the selling, much of it's
been in the higher-beta stocks. High-beta names usually offer very
low dividend yields (or none at all), which means very little
downside protection. These stocks just don't have the loyal
shareholder bases that our
Best Dividend Stocks
do, so selling just begets more selling from short-term
traders.
Of course, the business media paints any sell-off as a bad thing
for all stocks involved. In contrast, we like to view pullbacks as
opportunities to get into high-quality dividend names at better
price points. Inevitably, some great dividend stocks will be
dragged down a bit during market pullbacks.
If you bought quality companies during the massive sell-off of
2008/2009, the phenomenal returns since then should have solidified
your resolve to consistently put money into the best dividend
stocks. If you tend to get rattled during pullbacks, however, I
suggest you avoid business television during down days. In the
endless chase for ratings, the mainstream business media will
always resort to fear mongering during these periods.
As always, we'll continue to look for new opportunities during
pullbacks, all the while keeping an eye on our current
recommendations. If and when we see downside for particular names
we currently like, we'll let subscribers know immediately. Just
remember, 9 out of 10 times our downgrades are not "Sell" calls -
they simply mean "no new money" into the stock ("Hold").
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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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