As we head into the last two days of the third quarter, some
investors were wondering when the usual quarter-end buying would
finally hit, and today was the day, thanks in part to some optimism
just the latest Spain bailout proposal could be the catalyst for an
economic rebound. Everyone knows my feeling on how one bailout
continues to lead to the next, and so on. Many of these plans are
just about adding more debt in an effort to borrow one's way to
prosperity. When will we see results is anyone's guess.
Shifting back to our market story here in the U.S., credit card
issuer Discover Financial Services (
DFS
) gained nicely following
the company's earnings results
. The gains also lead to rallies for other credit card-related
plays such as Mastercard (
MA
) and Visa (
V
). The stock continues to hit new all-time highs, so today's good
news certainly helped attract money managers looking to pad their
third quarter portfolios with winning ideas. On the flip side,
spice maker McCormick & Co. (
MKC
) saw a bit of profit-taking following
this morning's earnings results
.
Meanwhile, Wall Street analyst upgrades pushed other stocks
higher. These names were led by Monsanto (
MON
) and Time Warner Cable (
TWC
). Other winners from today included Chevron (
CVX
), AvalonBay Communities (
AVB
), BHP Billiton (
BHP
), and Goldman Sachs (
GS
).
Protecting the Golden Goose
I recently read an analysis of this past weekend's
Eagles/Cardinals NFL football game in which the writer counted an
astonishing 20 hits on Eagles quarterback Michael Vick (including
five sacks). To put that number in perspective, most NFL
quarterbacks are hit well under 10 times per game. In just this one
game, Vick was hit by opposing players at a rate over three times
higher than the league average.
Now let's compare this dreadful stat to the great Miami Dolphins
teams of the 1980′s. In a single 16-game season (1988), Dolphins
quarterback Dan Marino was sacked only six times. I don't have the
exact stats available, but I'd venture to guess that Marino
probably took less total hits in that entire season than Michael
Vick did in a single game last weekend.
As a matter of fact, Dan Marino had many years where he was the
least-sacked quarterback in the league. The Dolphins realized early
on that any success the franchise would have would come courtesy of
Dan Marino's passing arm, and it was job #1 to make sure he was
protected at all costs. Thus, the team built a phenomenal offensive
line around Marino, ensuring the safety of their "Golden
Goose."
In that vein, I think we should all seek to identify the
proverbial "golden goose" in our lives. Perhaps your job is to
assist a key person that is closely linked to a company or
business's success. Or maybe you're the golden goose yourself, and
therefore need to build a team around you to fortify your current
or future success. We may not conceptualize this idea early in our
careers, when we have less personal responsibility (being single,
without kids, living at home with parents, etc.). Once you get
married, find your own place, and have children, however, the
picture changes completely (or at least it should). All of a
sudden, there could be a new sense of urgency about needing to get
a particular job, or having to put out maximum effort to keep the
job you simply can't afford to lose.
For me, having kids really raised the stakes and made me realize
I needed to put everything I had into my work. Not only did I want
to provide my family with the best possible everyday living
situation I could afford, even more importantly, I wanted to build
the legacy I would eventually leave behind. My wife and I decided
early in our marriage that she would stay home and take care of our
children. That meant she would take up much of the duties on the
home front, and allow me the bandwidth to focus on my
career/business. My wife and I have not strayed from our initial
pact, which has certainly helped me concentrate my efforts on
generating as much income as possible.
Somewhere out there, everyone has their own "golden goose." It's
our job to find and protect it, just like the Dolphins offensive
line did for Dan Marino.
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 DailyReckoning.com 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
Dividend.com Premium
members. This list gives readers a good idea of what stocks we're
watching behind the scenes here for potential upgrades.
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, as well as a detailed explanation of
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