Market Wrap-Up for Oct.4 (DB, MS, FCX, AVP, GLD, EK, AMR, more)

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It looked like we were headed for another day of losses, until a report from report from FT.com saying that EU finance ministers are looking at ways to co-ordinate the recapitalization of banks (European version of TARP?) was able to get the indices back into positive territory. Judging by the action once today again, you saw traders trying to dip their toes in the water with the recently lambasted high-beta momentum stocks.

Some of the formerly high-flying momentum stocks have fallen 30-40% in the last month alone. Traders are sitting on some serious trading losses out there (not unexpected when momentum stocks collapse as quickly as they have recently). My advice for traders sitting in losing positions that have only gotten worse is to consider biting the bullet during market spikes like we saw late today, and not risk tanking one's portfolio totally. Things can get really dicey when rallies are short-lived and overhead resistance becomes even greater (stocks gaining less and less on any up days this equates to "game over" for many traders). Clearly the volatile market environment makes trading more difficult than ever - which is why we advise people to stay away from trading altogether.

For dividend investors, we are seeing lower prices for some marquee brands, thus higher dividend yields will result. However, we prefer to focus on quality names that have been pullback-resistant in this environment. Of course, we'll begin to reconsider some of the well-known names that have been beaten up lately once we sense the downside action has run its course.

The early buzz today was German banking giant Deutsche Bank ( DB ) pulling its earnings guidance altogether . The market yawned for the most part on this news, as the stock has already been beaten up for months. We may see the same reaction for other financials that begin to fess up to impending losses.

We saw a lot of focus on Morgan Stanley ( MS ) as well, as potential solvency rumors continue to run rampant with that company. Morgan Stanley, as well as many of the financials gained strongly in the last hour on the FT.com story I mentioned above. A couple of early Wall Street downgrade calls had stocks like Lorillard ( LO ) and Avon Products ( AVP ) trading lower for much of the day, but AVP did manage to climb back into the green by the close. Avon is a good example of a well-known brand that looked good 15 points higher and yet still has little buying interest with a near 5% dividend yield. We feel there are better names to own with just as attractive dividend yields, so investors may want to wait for stocks like Avon to show some stabilizing before even considering the stock for one's portfolio. Lastly, commodity stocks were able to finally muster a bounce. Freeport McMoran ( FCX ) gained $2 after recently seeing the share price cut in half over the last three months. Also, the good news for equities didn't translate for gold ( GLD ) prices as the yellow metal once again moved back down toward the $1600 an ounce price level.

Dividend Stock Downgraded from Recommended List Today

Be sure to check out today's post detailing our downgrade if you haven't already. We removed a big-name stock from our recommended list because we prefer some higher-yield names.

The "Bankruptcy" Trade Lure

We are seeing another stage of what I like to term "Bankruptcy Stock Fever" begin to develop. There are two variations of this trend. One is trading stocks that have already said they will file for bankruptcy, but their stocks are still technically trading. Blockbuster was a recent example of this type. Then you have the "they could be next" batch of names (ones everyone is assuming will file soon). The favorites in this group include Eastman Kodak ( EK ) and AMR Corp ( AMR ) (formerly American Airlines). No one knows for sure if these companies will be ready to file bankruptcy any time soon, but looking at long-term charts of the stocks, such news wouldn't be surprising to anyone.

Unfortunately these scenarios bring in the "rubberneckers" that can't help but look at these stock price train wrecks. Instead of delusions of grandeur about catching the next Ford Motors ( F ) (which narrowly evaded having to file for bankruptcy), I want you to realize that the vast majority of these kinds of stocks will never climb back out of their downward spirals. These types of trades are extremely difficult to pull off. My best advice is to move along. There's usually nothing good to see when stocks are imploding.

Increasing Your Career "Dividends"

Many people today are working subpar jobs, while others are struggling to get back into the workforce at all. Your career is the biggest core of your financial foundation, and whether you are just starting out or in the later innings of employment, the need to get as much out of your job income-wise is enormous.

You can equate getting a raise to seeing a dividend increase from a company you own in your portfolio. Never take your eye off the ball when it comes to achieving the highest salary you possibly can. The best way to keep your salary rising? Make yourself as irreplaceable as possible. Also, be sure you are in an industry where the advancement process is clear to understand. The question of where you can go with the gig you are pursuing should be paramount to any interview or networking situation. Don't ever be shy about knowing where all roads could lead. When you look at your career (or even back at it if you are retired), you will see that most successful people got to where they wanted with little help from anyone else. You must remain an independent thinker throughout life and always have a back-up plan is if things take a sudden negative turn.

A Career Second Act?

I have heard some tough stories of people with families losing their jobs and not knowing how to rebound or where to even start. Once you get over the shock of losing a job, or even being forced to come out of retirement, be sure to frame all of your past work experiences and relate them to any new opportunities you pursue. Sometimes, you'll also need to consider settling for a lower initial salary in order to get your foot in the door.

The idea of getting a job and settling into cruise control simply won't work anymore. Gone are the days of making copies and "looking busy," so realize it is all about productivity these days. It'll be a tough adjustment for some, but that's the reality of the modern work environment. Remember, replacing lost income is not just important for your bank account, but also to improve your state of mind.

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 Dividend.com Premium 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!

Thanks for reading everybody. 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: AMR , AVP , DB , EK , F

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