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Market Wrap-Up for May 25 (FB, RL, PETM, LOW, TIF, more)

Posted
5/25/2012 4:20:00 PM
By: Dividend.com
Referenced Stocks:FB;LOW;PETM;PVH;RL

In a report released this morning, Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 79.3. This marks the highest level in more than four years, indicating Americans are getting more optimistic about the job market, with higher income households expected to see bigger wage increases. It's just a survey, and while we hope to see the same positive results actually come to fruition, we are still not hearing positive anecdotes from corporate America as far as jobs are concerned.

Despite today's market drop, the average still managed to close out the week with gains, although still off the early month highs.

With little big news items out today, numerous analyst calls dominated market chatter. However, we were focusing on some of the big earnings reports that came out this week, and how those stocks closed the week. Lowe's ( LOW ) and Tiffany & Co. ( TIF ) reported rather unflattering results and were not able to rebound much from the week's share price drop. On the flipside, shares of PVH Corp ( PVH ), PetSmart ( PETM ), and Ralph Lauren ( RL ) did a good job at holding the week's gains.

Facebook Refunds Expected Soon

According to several news sources, it appears Morgan Stanley ( MS ) will compensate retail investors who overpaid when they bought Facebook's ( FB ) stock in last week's IPO. This development comes following reports that Morgan Stanley analysts cut their second-quarter and full-year forecasts for Facebook just before the IPO, and told only a handful of clients. While not the first time something like this has happened, because Facebook was such a high profile IPO, they feel the need to make things right. Plus, the last thing banks want is to fall under even greater governmental scrutiny.

I'm not arguing against compensation for duped shareholders. Rather, I want retail investors to focus instead on investing strategies that actually work, instead of chasing after the flavor of the day stuff the business media endlessly hypes. You may get lucky as investor in the case of a Facebook refund, but if you don't start practicing smart investing, nothing but trouble will eventually follow. For those investors who heeded our warning regarding the Facebook IPO hype, this story doesn't affect you in the least. I applaud you!

Character Over Charisma Whenever You Want Consistent Results

As we head deeper into this big election year, candidates' charisma will play a big role in voters' perceptions. The media tends to gravitate to anyone with a high level of charisma early and often.

Charisma is great for winning elections, what about when the actual job begins? At this point, character much take over. Unfortunately, most politicians lack true character. This fact will become evident fairly quickly after election season.

The same goes for the leaders of many companies. Charisma may have led someone to the top of the corporate ladder, but only character will keep them there. To this point, we've have seen great companies lose their way over the years, leaving shareholders frustrated. Consistent results are difficult to achieve without someone with true character at the helm. So be on the lookout for that quality as you continue on your road to building wealth.

Ignore the Daily Scoreboard

Today's business media would have investors checking their portfolios on a minute-by-minute basis. As a result, many modern market watchers are more like gamblers than real investors. It's gotten to the point where most people will simply ask "What did the market do today?" to get a gauge on how stocks are trending.

It's become all too convenient to access your brokerage account and check the status of your holdings. Investors these days have the benefit of smartphones, tablets, laptops, and more - all on the go. We can't fight the trend of mobile access, but we should certainly pace ourselves. Realize the seeds we plant (in the form of dividend stocks or any other income-producing asset) do not need constant (hourly) monitoring. Instead, our investments are best left to grow without being glued to the barrage of breaking news we now get minute-to-minute from business television. Let us sponge that up for you, so you can focus on your career and other means of producing steady income to fill in your financial foundation.

Our Beat The Markets with Dividend Stocks eBook Has Arrived!

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A Look to Next Week and a Weekend Preview

Looking ahead to next week, earnings will be very light as the markets will be closed on Monday, in honor of Memorial Day.

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.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .