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Market Wrap-Up for July 25 (AAPL, ALTR, TROW, WLP, LO, IGT, more)
7/25/2012 4:11:00 PM
The latest batch of real estate-related data released this morning showed the sale of new homes fell 8.4% in June, which contradicts data from the month earlier. The May data showed sales hitting a 2-year high. As we keep saying, economic data remains consistently inconsistent, adding to investor frustrations.
The big focus today for the markets was on earnings, as we are in the heart of earnings season. Today's standouts on the upside included semiconductor plays Altera Corp ( ALTR ) and Broadcom ( BRCM ), with both stocks bouncing off recent 52-week lows. Also seeing green were shares of Eli Lilly ( LLY ), Boeing ( BA ), and Ace Ltd. ( ACE ). On the flipside, selling was the main theme for the following earnings names, including Wellpoint Inc. ( WLP ), T.Rowe Price ( TROW ), Apple ( AAPL ), Lorillard ( LO ), International Game Technology ( IGT ) and Corning ( GLW ).
On Second Thought…
Lots of hoopla this morning following former Citigroup CEO Sandy Weill's appearance on CNBC. Mr. Weill commented that the big banks need to broken up, separating their investment banking and trading activities from traditional savings & loan operations. The irony is that Mr. Weill was one of the biggest proponents in the late 90′s of making "Super-banks or supermarkets for financial services." He lobbied for and succeeded in getting legislation altered so that major U.S. banks could do just that - and we all know how that story turned out.
Now Mr. Weill is back on the scene with a retraction of the very same model he so feverishly pushed for and likely profited handsomely from. It's amazing how things work on Wall Street, isn't it? These folks simply move whatever way the wind is blowing.
Too Many "Transition Boomers" are Unprepared for Retirement
Allianz Life Insurance Company of North America recently completed a survey where one-third of so-called "Transition Boomers" (age 55 to 65) indicated uncertainty about their retirement income needs. More than half (64%) were ages 55 to 60 and about one-third (36%) were between 61 and 65. The study also found one-quarter of the group uninformed about the effects of inflation, while more than 40% lacked a realistic idea of when retirement planning should begin.
Now here's an even bigger shocker from the report: forty-three percent of respondents said they will not focus on retirement income strategies until they are less than five years from the start of retirement, with 16% waiting until six months to one year prior.
We all know rising food and energy costs, along with bigger ticket expenses (college, mortgages, etc.) have limited the retirement savings for many people. Thankfully, there are solutions available for those unprepared for retirement.
Taxpayers age 50 and over are eligible to make a Roth IRA catch-up contribution of an additional $1K/year, bringing the total of their contribution to $6K annually. And here's the thing: if you were to invest $5K per year for every year in your 50s, each $5K you invest could turn into more than $40K after 20 years! To be able to achieve returns like that, quality dividend-paying stocks are a must. Historically, dividend-payers have averaged 10-12% returns annually. The bottom line is to invest in assets that produce income, even if you find real estate-related deals that can produce positive cash flow. We love dividend stocks first and foremost, but if a great deal comes along and you can derive some great income from a real estate property, why not diversify if the numbers work.
Remember, it's never too late to get the ball rolling. Even if you have to keep working for longer than you originally planned, at least you know you have a chance to recover financially in your golden years.
The bottom line is for individuals to start investing as soon as possible, and consistently stick with the process of building a huge nest egg. Whether you're starting from scratch and opening your first online brokerage account, educating yourself as to what dividend stocks can work best to generate returns, automating the process of getting money to be put to work to work, or just keeping a watchful eye over your portfolio each month, no one will care more about your finances than YOU!
Each and every day here at Dividend.com, we try not only to find the best dividend stocks for one's portfolio, but also to keep our recommendations as current as possible for those looking to put new capital to work.
Our Beat The Markets with Dividend Stocks eBook Has Arrived!
We just debuted our brand new 275-page eBook, exclusively on Dividend.com! In this digital-only book, we look ahead to 2012 and the main factors that could affect dividend investors. A $39.95 value, the eBook is a free download for paid Dividend.com Premium subscribers.
Beat The Markets with Dividend Stocks contains a full economic forecast for 2012, including in-depth analysis on 65 of the biggest dividend stocks out there. It's a great way to get prepared for your investing next year! So head over to the Dividend.com Premium homepage now to download your copy.
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!