Market Wrap-Up for Oct.4 (WMT, GPS, KSS, AGNC, NLY, BTU, more)


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Judging by the market's one day reaction to last evening's first Presidential debate, the market is embracing the idea of a closer-than-originally-expected race. Of course, it's still early in the election process as far as debates go. I would imagine the debate swings will be as volatile as the markets.

Getting back to the market picture today, monthly retail sales took over the early headlines with stocks like Gap Inc. ( GPS ), Wal-Mart Stores ( WMT ), and Target ( TGT ) seeing a positive reaction to their monthly results. On the flipside, we saw some selling in names like Ross Stores ( ROST ), Kohl's ( KSS ), and PetSmart ( PETM ). We saw an interesting downgrade this morning of a couple of high-yielding mortgage REITS, namely American Capital Agency ( AGNC ) and Annaly Capital ( NLY ).

Looking at sectors that are moved today, coal-related names gained, with stocks like Peabody Energy ( BTU ) and Consol Energy ( CNX ) leading the way higher. Casino-related names went in the opposite direction, with stocks like Wynn Resorts ( WYNN ) and Las Vegas Sands ( LVS ) ending lower.

Dividend Stock Removed from Recommended List

We removed another dividend stock from our Best Dividend Stocks List this morning. We still like the name and its yield, but would wait to add new money to the shares for now. Check out the name we downgraded along with a full explanation here .

Don't Blink

It's funny how some people believe investing has gotten much easier these days, just because the platforms to put money to work are easy to access (log on to your online brokerage account from anywhere on any device). In reality, making transactions simpler doesn't make investing decisions any easier. And although you now have access to much more research, both free and paid, finding one style or publication that you feel great about can be very difficult.

Investors want to know their money is safe, but they also want to be in the know if someone has a hot tip on some fast money. That's an unfortunate part of human nature. The casino mentality in the markets is just as prevalent as ever.

As a result of these and other factors, I'd argue that today's investing environment is just as difficult as it's ever been. Look at the recent carnage occurring in stocks like Hewlett-Packard ( HPQ ), considered by many just a few years back as a must-own, diversified way to play the tech economy. After all, the company had what many considered to be top management. Yet the company lost its way, and Apple ( AAPL ) barreled over H-P (and other PC/device makers) with ease. I fear that Hewlett is probably still sitting in many long-term holders' portfolios, and will likely remain there indefinitely. Why? Because most investors wait too long to sell, and figure the worst has already happened.

The speed at which entire industries are being transformed these days makes the art of investing quite a complicated venture. You must stay on the ball and have at least one reliable research source to help keep you abreast of all the comings and goings. Just as importantly, your research sources shouldn't be waiting to scream "fire" after the damage has already been done.

Today's generation is unique in that younger people are not anchoring down as much as prior generations would. Blame it on the lack of job opportunities perhaps, but getting married, buying a home, and having kids are things that young folks are pushing back further than ever. Of course, there will be investment ramifications stemming from these trends, among others that continue to take hold.

I ask everyone who is investing their hard-earned capital (no matter what assets you're buying) to pay close attention to the world around you, and not lose sight of how changes can destabilize one's nest egg. Stay flexible and above all, remain disciplined!

You Really Only Get One Shot

A friend of mine recently told me about a commercial property he was considering buying. The property had a superb location, but borderline ROI numbers (known as "cap rate" in the real estate world). In other words, there wasn't much room for profit after monthly expenses were factored in.

The seller was asking a high-ticket price, so my friend wanted to make sure he could work the sale price down as much as possible. He held off on making an offer, hoping the seller would capitulate and come down to a more reasonable price. Thus, he remained on the sidelines for a while and patiently waited.

Unfortunately, to his dismay, my friend recently picked up the local paper and found out the property he'd been looking at was being acquired by a local group (the price was not disclosed). I asked my friend why his realtor wasn't aware of the potential deal for the property they'd spent so much time investigation, especially since the listing agent for the property worked in the same office. My friend expressed extreme frustration and honestly have no idea what happened. Looking back on the process, my friend noted a potential red flag he failed to notice initially: the sporadic follow-up he would get from his realtor.

Sometimes calls and emails were returned, sometimes they weren't. Follow-ups ranged anywhere from a few minutes to a few days. Maybe it shouldn't have been much of a surprise that the property was bought without his realtor realizing it!

Regardless, the experience left my friend with a bitter taste, and the notion he would never work with that particular realtor again. Ask any successful realtor, and they will tell you they build their entire business on the back of great referrals. You see, in sales, the margin for error is very thin. You can try your best as a realtor and a deal could still fall apart, but most good clients will recognize the great effort made, and will almost always retain the realtor for another crack at something else.

When it comes to evaluating realtors or other business people, I have found in my life that if I have to defend someone more than once, it's probably the case that a real problem does actually exist. In other words, anyone can slip up once, but if it becomes a habit, the outcome of working with someone is likely to not be good. My gut feel for these situations has saved me from entering into plenty of partnerships that would've likely been just a waste of time. Time is precious, so you need to deal exclusively with individuals that get things done, follow up with you when they should, and most importantly, get results!

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 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 highlights:

- 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 Premium 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

We know many of you enjoy reading the daily newsletter, but remember that with our Premium service, the newsletter is just one small component of what we offer. Here are the "Big Three" benefits of our Premium service:

- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.

- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.

- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a "Dividend Capture" trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.

We don't ask for a credit card to use our free trial, and we don't bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Premium a shot if you haven't already subscribed!

Thanks for reading, and 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 Nasdaq, Inc.

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