Another day, another glut of economic data for us to sift through. The last few months have seen very little cohesiveness regarding the various data reports. In fact, many reports have been in direct conflict with others.
Today's private sector jobs number looked decent, but the unemployment number coming out Friday could easily wind up painting a very different picture. This same phenomenon happened last month and many traders were caught on the wrong side of that report. It doesn't stop there - as we progress through the numerous earnings report out this quarter, we see a lot of inconsistencies that require our deepest scrutiny. Take this morning for example. MasterCard ( MA ) came out with a big earnings beat, indicating that consumer spending is rising, while the most recent consumer spending report (which came out yesterday, mind you) showed the lowest consumer spending levels in two years. To paraphrase Jerry Seinfeld, "What's the deal with that?"
As investors, we need to do our best to break down these key reports. That's what we concentrate on here at Dividend.com every day. Always remember that flexibility - the ability to adjust to market fluctuations - is our greatest asset.
In that vein, we continue to fine-tune our Best Dividend Stocks List , and this morning we downgraded two more stocks that we'd like to wait for better entry points on. Be sure to check out the post from earlier today to see which names they were.
It looked like we were headed for a 9th straight day of losses, but buyers stepped in to pick up some inventory. Getting to some of the stocks moving on news today, we saw MasterCard ( MA ) buck the early selling and running higher, taking along competitor Visa ( V ) for the ride. On the flipside, we saw high yield telecom play CenturyLink ( CTL ) end 6% lower following the company's earnings results. We're becoming increasingly concerned about CTL's ability to maintain its current dividend payout level as the weakness in this stock continues. We prefer Verizon ( VZ ) and AT&T ( T ) for anyone looking to get exposure to the telecom space and are looking for above-average yield. Elsewhere, Time Warner ( TWX ) shares ended lower despite the company beating estimates following recent success from summer blockbuster "Hangover 2″ and the build-up to the final Harry Potter film. Beverage plays like Coca-Cola ( KO ) and Pepsico ( PEP ) attracted some of the afternoon buying we witnessed.
Our main focus is on quality dividend names with attractive yields, and this should be the main focus for all those that are hoping to build income for the long-term. Stocks with good yields help stabilize shares and provide above-average returns, which becomes increasingly important during periods of market volatility like we've seen over the past few weeks. We will continue to parse through our data to make sure the names we like best remain on our recommended list. If we take off higher-yield names, it is not a sell call unless we say it is. We just want to have the best names from a risk/reward standpoint on our recommended list for new money at all times. Investors should however utilize a sell strategy in the event a company you own drops 25% and there are company-specific problems that could cause significant underperformance for that particular stock.
For dividend investors, market pullbacks provide an opportunity to put your money to work and not have to chase your targets during what have seemed like endless up days. The hard part for investors on days like today is to actually make a move. People tend to want to wait for the selling to stop. There is nothing wrong with that, but understand that you don't ever have to take full positions when entering stock positions. Scaling in is the best way to get exposure, especially if your gut tells you that we could be headed for a mini-correction. The idea of getting all out of the market requires the best of timing, but will also require the best of timing as to when the bottom is hit, and you will at some point need to get back in.
Thanks for reading, and I'll see you tomorrow! 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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