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Market Wrap-Up for Mar.29 (PVH, WLT, GE, VZ, T, RL, VFC, more)
3/29/2011 4:14:00 PM
After a mildly weak start, the market continued its recent end-of-month push higher. The current fiscal quarter ends in just a couple of days.
There is not much in the way of earnings news that is driving the stock moves. Phillips-Van Heusen ( PVH ) saw an earning-related pop, however, following the company's impressive results. PVH doesn't have much of a dividend, so growth investors rather than yield investors may be a bit more intrigued regarding that name. The news did spur buying in competitors Polo Ralph Lauren ( RL ) and V.F. Corp ( VFC ). Speaking of growth names, Wall Street analysts were out pushing shares of former recommended name Walter Energy ( WLT ). The stock has been on a recent winning streak, finishing up for the last six trading days (traders are certainly attracted to this sort of action, but the yield is minimal and not a good play for income investors). Elsewhere, shares of General Electric ( GE ) finished slightly higher after the company announced an acquisition of a French electrification and automation equipment firm this morning. Another good day for telecom plays Verizon ( VZ ) and AT&T ( T ) as analysts continue to weigh the ramifications of the recent M&A announcements in the space.
We are laser-focused on any possible changes we will be making to our "Best Dividend Stocks" List . We will keep subscribers updated to any changes as we make them. I want to reiterate that investors should consider any new names we add on pullbacks only - our recommendations are not intended for day-trading ideas where "timing" the market is critical. I realize that sometimes the names we recommend move a bit more at times on our calls, but we are not interested in intraday action. We instead focus on longer-term holdings. The growth names we sometimes recommend are short-term ideas, but we mostly focus on long-term income producing ideas.
Because many people have some sort of exposure to real estate, I am often asked about whether it is better to rent or buy a home in today's market. Everyone knows my stance about looking for multi-family properties with positive cash flow as my only favorite investment theme tied to real estate. But not everyone is interested in being a landlord, but rather looking for a place to settle down and raise a family. Renting allows you the flexibility to move around and it can be a great idea if you are still trying to establish your career. Renting in your 20′s seems to make sense when you tie it to the career theme. Once you do have a career and met the spouse of your dreams, I would then weigh the numbers based on the area you live it. Real Estate is typically tied to location and in some parts of the country, it is better from a numbers standpoint to be a buyer than a renter. If you are going to be a buyer, you need to make sure you have sufficient funds to push through on a purchase, without wiping away all your savings as well as any emergency funds. Owning a home is much more expensive than most realize. On the flipside, it is nice being the boss of your property and not dealing with other potential problem tenants. There is a give and take when you ultimately have to make the decision to rent or buy. The bottom line is to make sure you love where you are going to live, whether it is a purchase or a rental. I also would hope that one is still able to make a regular monthly investment when all the expenses are paid, regardless of the rent or mortgage. I am certainly not a fan of pouring all your capital into your housing expenses each month and not leaving you with any capital that could be going to work for you.
Entrepreneurs like myself will tell you that being able to keep up with everything that needs to be done when you own a home is really tough to do. If you're like me, you'll likely wing up hiring different contractors to keep your home maintained. Working basically 7 days a week on building the Dividend.com brand limits the amount of time I can put into my home myself. I want to spend time with my family as well, so you have to decide what makes sense from a cost standpoint. For me and I'm sure many entrepreneurs, I would rather invest the time in my business and leave the other home chores to others I feel good about paying to get them done.
Again, it comes down to the numbers. Time management is something that is often overlooked, but is critical in trying to decide how best you should be compensated. Mental exhaustion bothers me more than physical fatigue. We all feel a bit of burn-out from time-to-time, but that is why you need to focus on where you are the most productive. As much as I want to be the best Dad in the world, there are plenty of times where I will not be able to claim the title. Having a spouse who understands this helps immensely. Whether you own a business or have a career that is a bit demanding, you will know what I mean. When I would trade from my home office, I would often tell my wife "I'm here, but I'm not here". This was at a time when my kids were really small and would want to run into my office for play-time. I do admit I was not too strict in enforcing my own rules at times, but for the most part, that was my life. I would be in my office from the crack of dawn to the closing bell. Getting up to get some water, food, and bathroom breaks. Whoever tells you trading is a glamorous life is seriously over-selling it! But as I said earlier, deciding where you energy needs to be is paramount to your overall success. Spending an hour on something that could cost $30 if you have someone handle it for you, doesn't make sense if you just blew hundreds of dollars being focused elsewhere for your business or professional career.
My "Be a Dividend Millionaire" book is now in stock over at Amazon.com and makes great gift to give to friends and family! The book is simple to understand and I wanted to hit on many different areas of investing and personal finance that many take for granted. There are already several reviews on Amazon, and if you buy the book, I'd really appreciate if you'd post a short review on how the book may have impacted you. Investing needs not be a "rubik's cube", and you know I love steering everyone away from taking too many unnecessary risks with one's hard-earned money.
Thanks for your support everybody and thanks for reading my newsletter too! Please pass this on to anyone you think we can get inspired and educated about building wealth and using common sense to do so.