The market was cruising along through the first half of the
session, even following negative comments from the European Central
Bank regarding the outlook for Eurozone economic growth. However
comments from a Ben Bernanke speech early this afternoon put the
market on the defensive, pushing the indices into negative
territory for the rest of the day.
High-beta traders had been continuing to chase the usual names -
), CF Industries (
), as well as non-dividend plays with off-the-charts valuations.
How about LinkedIn (
) at 228 times 2012 estimates. Even if you pay two times sales
growth - which by the way is estimated to be 47% in 2012, the stock
would be in the $40′s (currently trading around $86). Now again, it
is a social media darling and has paved the way for the next batch
of IPO's including Facebook. If we follow the late 90′s format, we
may not see the eventual correct valuations for a while. The runway
of hyped IPO's may need to clear before any warning sirens are
Looking at today's names, Men's Wearhouse (
) finished down following the company's cautious outlook. Valero
) and Cisco Systems (
) managed to hold on to gains following some positive Wall Street
analyst commentary. On the flipside, Boeing (
) and Consol Energy (
) drifted lower as both names caught analyst downgrades.
I happened to catch several market commentaries about
yesterday's big rally, and how it was combined with volume that
confirmed bullish characteristics. I wish I could see the data they
saw, because volume on the NYSE was on the light side and the
Nasdaq was around average. I hate to be a bit grumpy on this, but
this is still a market that has yet to prove that we are out of
harm's way. Do I prefer green on the screen? Of course I do. I'd
just like to see the bullish arguments have a bit more reality
Be sure to check out our weekly
50 Watchlist Names"
post that is out today, only for
members. Some high-beta dividend stocks will certainly be on this
list as we keep everyone up-to-date on names that are working
better than others in this current market environment. Our focus is
more on yield, so be sure to recognize the risk of buying
Millions Still Unprepared for Retirement
According to the latest government data, Social Security made up 38
percent of the total income of people age 65 and older in 2009.
This is up from 30 percent in 1962, and is the largest of any type
of retirement income.
Only a fortunate minority of Americans have significant sources
of retirement income other than Social Security. Social Security
made up 50 percent or more of the retirement income of 66 percent
of Americans age 65 and older in 2009, up from 64 percent in 2008.
And more than a third of retirees (35 percent) receive 90 percent
or more of their income as a monthly payment from the Social
Security Administration. The average monthly payout to retired
workers was $1,176 in 2010 - hardly enough to live on in our modern
society. Overall, more than 54 million Americans were paid a Social
Security benefit last year.
In another troubling data point, 39 percent of households with
heads aged 60 through 64 had primary mortgages in 2010 and 20
percent had secondary mortgages, according to research group
Strategic Business Insights' MacroMonitor. This data point
certainly highlights the fact that many older Americans must
continue to work if they have any chance of getting out of the debt
spiral. There is a hidden effect of having many older individuals
continuing to stay in the working world. College graduates are
finding fewer opportunities to step into that would normally come
when their generation approaches the retirement years.
Younger Folks are Affected, Too
A poll by Inc./WomanTrend shows the financial and psychological
toll the current economic environment is having on today's younger
generation. Out of the 18-29 year-olds polled:
- 28% are delaying saving for retirement.
- More than one out of five, 23%, are delaying starting a
family, and 18% are putting off getting married.
- Nearly half, 44%, say they're going to delay buying a
This sounds a lot like life in many parts of Europe, where
parents see their kids living at home well into their 30′s, have
trouble finding work, and feeling helpless about their futures.
There was an eye-opening study out late last week estimating that
about 38 percent of Europeans, or 165 million people, have some
type of mental illness and that most are going untreated.
Without the flow of old workers retiring at a certain time and
younger generations picking up the slack, the natural economic flow
will be disrupted. We will see it in real estate as stated above,
with the dream of buying a home pushed to the side for many. This
trend leaves less to those who have their main nest egg sitting in
I don't mean to bring all these points up to get everyone down
in the dumps, but rather to keep reminding everyone about the
economic realities many could face if they don't follow the right
financial path. People love to dismiss the importance of money, but
having it does make life a heck of lot simpler. We want to be able
to enjoy the fruits of life as well as be able to create a legacy
for future generations. Looking at the social security and mortgage
data points above should serve as a reminder that things could
unravel quickly, and as we all know, time goes by very quickly.
Each day provides an opportunity to better ourselves financially
and professionally. Tackle the obstacles as they come and don't get
frustrated by the frequency of issues we face. I have three kids
and I can tell you that there will be issues that will pop up in
time. That's life! Always focus on making the best decision
possible and don't be afraid to be flexible if life calls for it
(especially when it comes to making a career change).
Thanks for reading, and I'll see you tomorrow! P.S. Please pass
this e-mail on to someone you think can use some financial
motivation as well as being kept in the financial news loop that
could affect them.
Paul Rubillo is the CEO and Founder of Dividend.com.
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, as well as a detailed explanation of
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