It was back to the green side for stocks today as investors felt a bit better on the news of the latest ECB bailout negotiation headlines. The move to the upside came despite several earnings warnings from well-recognized companies. It was a good comeback for the markets following yesterday's sell-off, despite so-so volume.
Texas Instruments ( TXN ) and Dupont ( DD ) climbed off earlier lows on news both companies have cut their earnings estimates . Also, Toyota Motor Corp ( TM ) came out with a gloomy outlook , but the stock turned positive and ended higher on the day.
In contrast, positive Wall Street commentary had shares of McDonald's ( MCD ) hitting all-time highs today, while Best Buy ( BBY ) saw its estimates lifted in response to decent Black Friday sales. BBY is slated to report quarterly numbers next week. In other news, warehouse club play Costco ( COST ) did not participate in the rally following a reports its estimates were cut by BMO Capital Markets. We were tracking several dividend hike announcements throughout the day, including news General Electric ( GE ) pushed their payout higher for the third time this year, as the company continues to work back toward its dividend payout highs from several years back.
New Dividend Stock Recommended Today!
Famed Investing Author Pushing Dividend Investing
You can add Burton Malkiel, legendary investing author of Random Walk Down Wall Street fame to the list of investment gurus who see dividend investing as the way to outperform the markets. In a recent Wall Street Journal piece, Mr. Malkiel was quoted as saying a low interest rate environment will continue to chip away at investors' portfolio returns/savings. His response? Just look for quality dividend-paying stocks .
Equity Allocations Falling to New Lows
A report from DWS Investments (part of Deutsche Bank) showed investors' equity mutual funds' allocation is down to 55%. You can certainly point to the volatility we have seen in the markets the last few years in chasing some investors away. Unfortunately for investors who are losing faith in stocks, there are not too many other options that can provide the returns we have seen from our dividend investing strategy.
What often happens is investors tend to chase performance, so if you are heavily into growth-style funds, the returns can vary dramatically from year to year, causing panic for many. I'm not against owning any growth names at all, but the business media tends to focus only on the flavor-of-the-day names in their attempt to grab ratings.
As a dividend investor, this news doesn't shake my confidence at all in our objective to find the best income-producing dividend stocks to help build long-term wealth with. This strategy has worked decade after decade, and 2011 was another stellar year, despite the market averages spinning their wheels for the most part.
The bottom line is not to let the headlines distract you from the great results that dividend investing brings you!
Don't Run Out of Money
I often get asked about the best ways people can maintain their current lifestyle when as they approach retirement. The big thing to remember later in life is to never put yourself in a position where you have to roll the dice in order to make ends meet. You need a fairly conservative investing and spending plan.
Getting into a habit of buying income-producing assets is critical. Try to generate as many sources of income as possible, whether through dividend stock investing, real estate with positive cash flow, and perhaps the idea of "buying a job" if you need even more. "Buying a job" refers to working for yourself, if your health allows it (and even if you have physical restraints you will have options). You can consider buying a franchise business, which many older individuals have shown tremendous interest in. Recent data from those attending franchise expos show those 50 and older make up nearly 25% of the audience.
Of course, there will be financial hoops to jump through. Generally speaking, the more established the franchise, the more money in terms of a down payment you'll be expected to come up with. Just a simple Google search for "franchise opportunities" will present you with plenty of information to chew on.
With the employment situation being as tricky as it has ever been, the idea of "buying a job" isn't as peculiar as it may sound. You can file this strategy under "investing in yourself." Just make sure you are prepared to work hard, and do your homework before jumping into anything. Finally, factor on building your nest egg to a point where you can either pass the business on to someone in the family or sell it outright.
So as you get older, the number one rule to remember is not to run out of money. Plan wisely and bet on living a lot longer than you think. Stay as active as you can, and don't get too caught up in the endless media coverage of every little movement in the markets.
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A Look to Next Week and a Weekend Preview
Looking ahead to next week, quarterly earnings results will be fairly light. We will still see reports from the likes of Best Buy ( BBY ), FedEx ( FDX ), and Accenture ( ACN ), however, just to name a few.
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.
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