Market Wrap-Up for Jan.25 (KMB, VZ, HOG, AXP, JNJ, MMM, more)
We are getting more data on housing today, and essentially nothing new has come to light. The latest numbers are finding single-family home prices fell for a fifth straight month in November. At some point, business television will lose the emphasis on the importance housing will play in the current economic recovery. Unfortunately for us, Dow 12K is starting to get on the radar for the pundits, as if it really matters.
There is a bit of a new vibe when it comes to the American dream of owning a home. Increasingly, Americans are disregarding the home as an integral part of their nest egg, opting instead to rent. There's still money to be made in buying and selling real estate, but for the average Joe, the roadblocks to owning real estate have gotten much bigger with much stricter lending standards. Many banks are actually reverting back to requiring 20-30% down payments to consider a buyer "serious." I stick to the idea that if you are looking to reap money out of buying a property, focus on multi-family units where you can take residence and have the tenant help pay for a piece of your mortgage note. Just be ready to be a landlord - it's not for everybody. Some of my relatives and friends have been very successful with this strategy, eventually moving on to buying larger multi-family properties. It makes sense to start small at first, though. There's no sense in buying something too big unless you've tasted life as a landlord and can stomach it on a larger scale.
This morning, we added two more dividend names to our "Best Dividend Stocks" List . Be sure to check out the link below if you didn't see the e-mail alert we sent out earlier. Today's market action was dominated by earnings results. Some of the winners included Kimberly Clark ( KMB ), Harley-Davidson ( HOG ), Verizon ( VZ ), BlackRock ( BLK ), and Baker Hughes ( BHI ). On the flipside, earnings results pulled names like 3M ( MMM ), W.W. Grainger ( GWW ), American Express ( AXP ), and Johnson & Johnson ( JNJ ) lower. Lots of volatility transpires during earnings season, and it is a period in the market every quarter that I am not the biggest fan of. Buying and selling can sometimes get overdone in certain headline names. Patience is key!
Let's continue this week's series on investing strategy anecdotes.
Investing Strategy #6 - "Be calm, have a plan, and ride it out
through the rough times."
This is tied into having a simple approach in the markets. It also pays to know which stocks are best to own when things get occasionally messy. This is what we do best when it comes to our recommended list, which names the only stocks you should be considering for new money that you are putting into the market.
Investing Strategy #7 - "Be flexible & sensitive to what the
market is doing rather than trying to tell the market what to do."
This is where we can sometimes see "book smart" investors running into trouble. Too often we are hear about some of the brightest minds in the business running a fund that gets in trouble. Being stubborn about a stock's outcome can cost investors dearly.
Investing Strategy #8 - "The importance of not having and
trading a biased opinion."
We can see times where an investor will love using a certain product and feels that because they like the product, it will automatically be a big hit for a company they are invested in (Krispy Kreme, Boston Chicken are just some examples). Well-liked products don't always translate into higher stock prices. Fads come and go, causing stocks to be all over the map.
Investing Strategy #9 - "Execute the plan, don't just 'think'
At some point, one needs to get off the sidelines and get their investing plan in motion. Waiting for the perfect time is a waste of time. No one can ever be so great as to time the best time to buy and sell consistently. That is what turns investors into traders.
Investing Strategy #10 - "Trying to pick tops is a sucker's
This is similar to what I just said above. Many a "smart" trader have badly timed trying to short stocks that "shouldn't" be going higher. This also applies to "ringing the register" on stocks long before the big long-term runs could be getting started.
Check out yesterday's first 5 investing strategy anecdotes and be sure to read more of these in the daily newsletters as the week goes on.
Don't forget to check out our library of "Learn to Be Rich" articles which give you snippets about personal finance maneuvers you should know about. As always, check out our industry-leading "Best Dividend Stocks" List for the top dividend names to put money into right now.
Thanks for reading, and I'll see you tomorrow!