Well, investors came back from the three-day holiday weekend to
find a nervous market environment. With gold prices hovering back
up toward the $1700 an ounce levels, stock investors moved a bit
slower into equities during the first half of the day, but did pick
up some steam as the day went on.
Campbell Soup (
CPB
) shares had traded off higher following
the company's earnings beat
, but the stock closed well off the day's highs. Apple (
AAPL
) shares were up following
yet another analyst upgrade
. These AAPL upgrades seem to come on a daily basis. At some point,
there will be no one left that hasn't said good things about the
Apple story!
In contrast to the Apple euphoria, there seemed to be a big
negative analyst theme around coal today, with downgrades hitting
coal producers Peabody Energy (
BTU
) and Walter Energy (
WLT
), as well as coal transport plays CSX Corp (
CSX
) and Norfolk Southern (
NSC
).
Following Europe's Lead? Let's Hope Not
The Washington Post highlighted the troubling employment
situation affecting the younger generations in Europe recently, and
the data is startlingly bad. The youth unemployment rate (age
15-24) in Greece and Spain has climbed to a staggering 53 percent,
with Portugal next at 36 percent, Italy at 34 percent, and France
at 23 percent rounding out the worst situations. In the U.S., the
youth unemployment rate is just 15 percent, but we all know that
number is trending higher.
Worries about the fallout from the troubling trend in Europe
include rising crime and depression rates, with birth rates
declining even further. Here in the U.S. the situation isn't all
that much better for young people. Remember, total student debt in
the U.S. recently crossed the $1 trillion mark, so the burden of
being unemployed becomes even more detrimental to one's overall
financial outlook.
With election season upon us, you can bet the emphasis will be
on some sort of student loan reform, but once again, these changes
will only come long after the severe damage has been done. Turning
to the taxpayer to help put out another fire that was fueled by
soaring college tuition costs is just another roadblock we will all
have to share at some point.
We all have to do our best to guide the next generation to
smarter choices (in school, spending money, career, and with whom
they surround themselves with). My kids are always hearing me use
the word "hustle," and my daughter got her first taste of it
recently, working in a super-busy gelato store for the summer.
Fortunately, she loved the fast pace, and I hope my prep work (from
my old retail days) had something to do with her being ready to
go.
See, we can't operate like Washington/local governments do when
it comes to our family's finances. If we only react once something
bad has already happened, ignoring the early warning signs, we'll
being doing ourselves and our families a great injustice. Let's
hope our government can realize this fact at some point, and stop
being so late to the blatantly obvious problem areas in the
economy.
Calling for Accountability
I recently read about a 19-member civil grand jury calling out
the San Francisco Employees' Retirement System's (SFERS) investment
strategy because of its "volatile and risky investment policies,"
"unrealistically high, assumed investment return rate of 7.66%,"
and for not undertaking a formal "failure analysis" subsequent to
the funding loss suffered in 2008-2009. The $16 billion public plan
is only 83.9% funded as of July 2011, with $3 billion in
outstanding liabilities, which does not comply with the city
charter requiring that the public pension be fully funded.
Now of course, if the fund was doing well despite investing in
volatile and risky investments, it probably wouldn't come under any
scrutiny. When things are going well, like gamblers, risky
investors are on top of the world. It's only when the house of
cards comes crashing down that the critics come calling.
Regardless of the type of markets we are in - bull or bear - an
investor's job is to remain grounded in what his or her normal
realized expectations should be. Unfortunately, human nature
distracts many investors, who seek above-average market returns
year after year. This trend leads to chasing whatever the next big
move may be, and eventually a portfolio based only on the bedlam of
the markets.
I can't say it enough: stay consistent and disciplined in your
investing, and you'll be bound for long-term success. Get greedy
with unrealistic expectations and start chasing speculative
investments, however, and you'll inevitably do serious damage to
your hard-earned nest egg.
Year-to-Date Results Just Posted
Be sure to check out the year-to-date watchlist posts up on the
site today. You can see how well many of the dividend stocks we are
tracking have done through the first eight months of 2012. As
always, you can find these and other members-only articles on
Dividend.com Premium Articles Page
.
I hope everyone had a chance to check out our
Dividend.com Premium
members-only weekend articles , including new features that
highlight some of the biggest winners and losers from the week that
was, such as analyst upgrades/downgrades and earnings/story stocks.
These articles are a great way to catch up on the week that was in
the markets. We also have a rundown of how various Dividend ETFs
performed on the week.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.