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Market Wrap-Up for Jan.6 (MA, V, CME, FDX, WTW, JPM, more)
1/6/2012 4:33:00 PM
The market didn't react as well as many investors had hoped, following a better-than-expected jobs report. The indices ended mixed, as some worry the Federal Reserve may not need to accommodate with further capital infusions. How ironic is that? You would think not needing a QE3 program would be more embraced!
Looking at today's movers, the credit card names that were strong in 2011 have struggled in this first week of 2012. MasterCard ( MA ) more so than Visa ( V ) has seen consistent selling. Other high-beta plays seeing a bit of downside today included CME Group ( CME ) and Wynn Resorts ( WYNN ). Wall Street analyst upgrades helped put a bid in shares of FedEx ( FDX ) and J.C. Penney ( JCP ) in the early going. The JCP call is a real head-scratcher, as the company just reported disappointing monthly sales data little more than 24 hours ago. Lastly, the ultimate New Year's resolution play - Weight Watchers ( WTW ) finished the first week of trading with a 23% plus gain.
When Everyone's Doing It
Undeniably, our society loves jumping on the latest fads. Whether it's investing, social media, or the latest gadgets, people flock to the hottest topics in droves.
We live in a microwave-style world. People want results and they want them now. In many areas, patience seems to be a thing of the past. Investors get into the stock market and expect instant results. They simply don't understand that long-term investing is the only reliable way to have consistent success and generate wealth. Entrepreneurs, too, now launch start-ups and look to cash out within a few short years. Who needs a real business model when you can raise a few million from venture capitalists, gain some users, and sell to an ill-informed acquirer? Or better yet, issue an IPO and sell shares to ill-informed investors!
Manic media coverage continually adds fuel to this "instant results" fire. Sensationalism equals ratings, after all. The losers in this equation are the audience. Everyone else makes out pretty well: the news outlets gain viewers and sell more ads, and the advertisers get to sell their wares to a bigger audience.
It's a constant race to discover the latest hot trend and pour money into it. "You just gotta trust me and get in fast," they'll tell you. No one's held accountable when the house of cards comes tumbling down, however. Not the talking head on the television, not the network, and certainly not the huckster who sold you an investment that turned out to be a lemon.
I've talked to dozens if not hundreds of people who've been burned by bad investments. Almost without fail, they'll tell me "at the time" it seemed like a good idea. I've noticed that no one seems to do any due diligence "at the time." They figure it it's popular, then it's gotta be big!
Do yourself a favor. The next time you hear about a "can't miss" proposition situation, just do your homework first. Your hard-earned money is far to0 precious to throw away on half-baked investment opportunities.
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A Look to Next Week and a Weekend Preview
Looking ahead to next week, quarterly earnings results will slowly start trickling in for the first quarter. We will be looking for reports from financial names like M&T Bank ( MTB ) and J.P. Morgan ( JPM ) for starters.
Be sure to catch up with our latest watchlist updates this weekend on Dividend.com Premium , including reports on earnings/story stocks, analyst upgrades/downgrades, dividend ETFs, and much more. And as always, you can view our current recommendations on our industry-leading Best Dividend Stocks List .
Thanks for reading, and I'll see you this weekend! 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.