The markets had their first decent down day since last Monday. Once again, investors were expressing concern about the European debt crisis.
We certainly welcome a bit of restraint in some of the recent nothing-but-upside price action we've noticed in the dividend names we're currently recommending . Money managers crowding into certain parts of the market can cause investors to feel they are missing the boat, which has translated into some of this year's winners get really carried away. Stocks like McDonald's ( MCD ), Pfizer ( PFE ), and IBM Corp ( IBM ) have all risen substantially year-to-date. As we've learned in the past, when investors forget about valuations, trouble almost always follows.
Taking a look at the financials today, weakness in Deutsche Bank ( DB ), Citigroup ( C ), and multi-national names was not a surprise when the focus becomes about global economic activity. Gold ( GLD ) also had another tough day on more selling as the yellow metal continues its over four-month slump. Down days for equities have not even helped gold prices, which is something for investors to take note of.
Investing Growing Pains
As part of my daily routine, I like to visit my favorite local bagel shop each morning. Normally I get there just as the place opens at 6:00am. Lately, however, the overall experience at the shop has suffered.
The owner recently expanded his business, adding two additional locations. This move is ambitious and potentially lucrative move long-term. Employees of the shop are now forced to bounce around between the various locations, causing a high degree of stress in the workplace. Apparently, the owner has had a lot of trouble finding extra help, and is now running three shops with nearly the same amount of people they used for one. At some point I feel the rubber band will break, and the owner could have a mutiny on his hands!
People are creatures of habit and get used to accomplishing a certain number of tasks in their day. They like to keep a steady pace. Throw them more work than usual and sentiment can shift on a dime.
Investors, too, can suffer from similar growing pains. If your goal is to maximize the amount of money you save each month, you'll need to make sacrifices. Doing without some of the family's usual favorites can cause quite a stir. Don't be surprised if it's seen as some kind of punishment!
"What do you mean I can't go to the mall and buy those outfits?"
"Now we can't go out for dinner a couple of nights a week?"
"You promised us we we'd get a brand new car this year!"
As I'm sure you're aware, "wants" are easy to come by. In contrast, sacrifice is always difficult. Just look at my bagel store owner friend. He's focused on his long-term financial goals, but will have to deal with short-term growing pains. He'll need to make tough decisions early on. He'll also need to compromise on certain points at times to keep his employees happy. In time, he'll develop a more efficient system for running his stores.
I'm confident things will work out for my friend. Why? Because he's dedicated to his goal. And as long as you're dedicated to your own goals as an investor, you too will achieve the long-term financial success you're dreaming of.
Income, Income, Income
At Dividend.com, we maintain our focus on the best income-producing investments the markets have to offer during time of heightened volatility. We want to make sure we have only the most pullback-resistant names on our Best Dividend Stocks List . Also, if we see the market putting in what looks like a decent bottom, we will be prepared to scale up the list of stocks we like. Stay tuned and be sure to look for Dividend.com Premium member alerts along the way. Don't count on the government or your employer to set you up for a remarkable retirement. Take control, do your own research, and achieve your goals yourself!
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Thanks for reading everybody. I'll see you tomorrow!
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