Market Wrap-Up for Aug.8 (BAC, NOK, MCD, TXN, CSX, GLD, more)

The media had the pump primed for today's free-fall. The S&P downgrade on the U.S.'s credit made headlines all weekend, as well as it should. It was a big call from S&P, and one that our government could have prevented if they could show a bit more leadership, rather than the bickering on which special interests escape the first phase of cuts in the debt ceiling resolution. This latest market hiccup is a bonanza for ratings, so expect a plethora of experts out with downside targets, followed by some experts who see the drop as yet another buying opportunity. If you noticed, we have been tightening up our dividend stock recommendations so we can have the best names for long-term investors to scale into.

The immediate beneficiary of the debt downgrade was gold. The SPDR Gold Trust ( GLD ) ETF continues to be the best place for investors looking for exposure to the upward trend. We see this as a trade still, but it has worked well as Washington continues to spin its wheels. If you are long gold, we would recommend sell-stops be put in place to avoid giving up much of the profits. Any active investors should incorporate sell-stops to protect against losses of capital in a fast-moving market.

As for equities today, there was plenty of red on the screen as analysts piled on reaffirming buy ratings on stocks that continue their downtrends. When are the Nokia ( NOK ) and Bank of America ( BAC ) bullish analysts going to come out with words of caution? Both stocks continue to be investment disasters. There were a couple of downgrades we are watching closely from this morning. CSX Corp ( CSX ) and Texas Instruments ( TXN ) were two names that finished lower as analysts got cautious on both names. McDonald's ( MCD ) was also lower despite strong July sales. The selling crescendo we saw once again had all the makings of what I talked about Friday, with "forced liquidation" being the likely culprit.

We are watching the MLP (Master Limited Partnership) area closely with oil prices dropping. We have been very selective on what names in that sector we're still recommending, and will continue to watch those names very closely. Premium subscribers will be alerted if and when changes are made.

Let's shift a bit away from the market here and address issues affecting all of us, whether you are retired, nearing retirement, or have parents approaching retirement. The Wall Street Journal recently had a good article on important questions that retirees should develop answers for. Let's look at the one key question of when to begin collecting social security benefits. In the article, the WSJ pointed to a new calculator from AARP , which can help in your calculations. According to the latest government data points, 46% of people begin claiming social security at age 62. That locks them in at a much lower amount than they'd receive if they waited. The monthly checks are about 25 percent less if you retire at 62 instead of full retirement age, which is 66 for those born from 1943 to 1954. Less than 5 percent of participants delay past age 66. If you wait until 70, your check can be 75 to 80 percent more than at 62.

Now there are lots of factors as to why someone would jump the gun on collecting social security and there are plenty of people who feel like they need to "get it while it's still there." I don't believe social security is going anywhere anytime soon (it'll be decades before we see the program significantly scaled back in my opinion), however, I think the payout increases will be minimal. The pension liabilities in today's system are too heavy for tax increases to make up for increasing social security and medicare funding. Plus, how much can property taxes go up when values keep trickling lower? If you squeeze income taxes too hard, you kill the spending economy. My prediction is that many municipalities will go back to their existing pensioners with the intentions of cutting back on existing benefits. Is it fair? Heck no! But what are the options when towns are facing the real prospect of municipal bankruptcy?

The solution isn't to worry yourself sick about it, but instead start to take action. Start cutting your debt immediately, especially high interest debt (credit cards, etc.). Keep your living expenses in line so you can free up money every month that can be invested into assets that produce income. You need to get the power of compound interest in place to begin generating long-term wealth. If your home is going to be your biggest expense when you near retirement, think about downsizing or even relocating to an area where the cost of living can work well with your financial situation. A good financial planner will help you construct your near-term and long-term goals as well as analyze where your money is currently being spent.

For dividend investors, this is a great time to put your money to work as you are getting a chance to pick up great companies that have pulled back a bit. Scale into positions slowly and avoid the "all-in" temptation that you are catching the exact bottom.

I hope everyone had a chance to check out our Premium members-only weekend articles, including the new features that highlight some of the biggest winners and losers from the week that was, including 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!

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

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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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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