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Weekend Edition – Big Picture Concerns

I remember many, many years ago we had someone come give us an estimate for hanging a new sign outside our family business. It was a fairly decent-sized sign but I remember kidding the contractor it should be simple. "Pop, Pop, Pop" and it's up, I said. He laughed, and repeated "Pop, Pop, Pop."

I was in my early 20s at the time, and to be honest, I no clue about the process of hanging a sign that large. I wouldn't even know how or where to begin the preparations. We both laughed and I still smile when I think about that day. It was part of my learning process of being an owner/manager/boss of my own business. That was just one of many lessons I learned along the way!

When it comes to picking the right investments, whether it being stocks, real estate, or anything else, you need to be aware of the various moving parts that could determine the success of your investment. Let's look at the key economic issues that we are monitoring each and every day at Dividend.com as we look to keep our "Best Dividend Stocks" list updated for timeliness as well as performance.

The job market is front and center, and how quickly we see new jobs being created will have an impact on what companies can thrive and others can begin to rebound. One of our recent concerns is the pickup in earnings misses and managements worrying about their profit outlooks. Will there be a decision for some companies to trim their workforce to sustain current margins? What areas will these potential budget cuts impact, and how will those industries prepare for a downturn in business (defense sector comes to mind first)? The current climate will make it tough on any company looking to increase shareholder value, while at the same time keeping morale high for the current workforce who may be worried about possible job cuts. Our hope is that Washington is thinking about the job market carefully as it pushes forward with proposals to cut down the size of the national debt. Every action will have far-reaching ramifications and must be thought out properly. It's certainly not an easy task, but it's also not impossible either.

Rising medical costs and the uncertainty surrounding a new health care system that could be in place in the next several years also has investment ramifications. A recent survey from a large benefits consultant says nearly one in ten mid-sized or large employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014. We hear of many individuals right now that are rolling the dice and are not carrying any health insurance whatsoever. This practice can lead to financial ruin if the unthinkable happens within a family.

This issue also becomes crucial with our aging population. There has been lots of chatter about the stock market's overall returns as investors age, and with that comes a lessened appetite for risk. We agree that risk does become an issue as investors age, but the need for yield and income should remain strong with interest rates hovering in the historicall-low 0-2% range. Keeping up with inflation is critical, and the income generated from quality dividend-paying stocks should be a key part of anyone's strategy.

These are just some of the main "big picture" issues that we are tracking in our daily analysis. One thing I can tell you from the outside looking in, the job of riding through the financial ups and downs isn't as easy as "Pop, Pop, Pop." But we will do our best to keep all our subscribers as best prepared to handle whatever comes our way.

Thank you for sharing part of your weekend with me (hopefully many of you will not be affected by the Hurricane), and please be sure to pass this post on to anyone you think we can get inspired and educated about money, building wealth, and using common sense to do so.

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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