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Market Wrap-Up for Dec.27 (SHLD, MJN, SO, D, LO, more)
12/27/2011 4:07:00 PM
It was a subdued start for the market as we began this holiday-shortened week. Once again, we hope everyone enjoyed the break in the action and got to spend some quality time with family and friends. Volume during today's session actually finished a bit below Friday's totals, just to paint a picture of how light the action was.
The Christmas shopping season is barely over, and news broke this morning that Sears ( SHLD ) will be shuttering over 100 Sears and Kmart stores due to poor holiday sales. That story is dominating the headlines early today, as investors try and figure out what the future holds for other brick-and-mortar retailers.
Over the holiday, I chatted with one of my relatives who works in the retail clothing sector. He said that sales were strong in his stores, but that the company was basically giving their merchandise away, barely turning a profit on many regional brands. Margins, he said, would take a tremendous beating. We'll see how the publicly-traded retailers hold up in the coming weeks, but some could could be in for a bumpy ride if we see similar news like Sears released today.
Elsewhere, shares of Mead Johnson Nutrition ( MJN ) attempted to re-gain some of the losses from last week, as the company reports no bacteria was found in its popular baby formula . Several large retail chains had pulled MJN's products from their shelves following last week's scare. Yield-centric stocks like Southern Co. ( SO ), Dominion Resources ( D ), and tobacco play Lorillard ( LO ) were up once again as last week's hyper-drive to buy yield continues into the new week.
Don't Get Sloppy in an Up Market
As the market has been on a good tear to the upside, we've increasingly heard from investors looking to get back into the markets in one big swoop. This trend tends to take hold when investors think the train is about to leave the proverbial station (i.e. they're missing out on potential gains by sitting on the sidelines).
As dividend investors, we should never panic and feel compelled to throw a huge sum of money into the markets all at once. The best approach (in our opinion) is to make regular monthly stock purchases so you don't have to agonize on whether you have picked the right day to go "all-in."
I understand the anxiety some investors feel. It's difficult to sit in cash while watching the averages move higher day after day. That's why you must avoid trying to time the markets. You may miss some down days, but over your investing lifetime, you also risk missing some of the best upside moves the market will put together. To put in simply, inconsistent investing will hurt your overall performance in the long term.
If the increasingly manic business media adds to your angst, just turn down the volume and focus on smart about your plan to build wealth. Leave the unnecessary emotions to day traders that can't afford to miss a single second of the action.
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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.
Thanks for reading everybody. I'll see you tomorrow!