Is it me or are we seeing a regular pattern of "extended programming" as the continuing economic drama plays out across the globe? How ironic is it when financial media networks assure viewers that "we are here to calm investors' nerves," but in reality they are just pouring gasoline on the flames of fear?
All too many pundits these days are trying to create a name for themselves by making big statements to get viewers glued to their seats. Controversy sells, and unfortunately many follow the fear blueprint, knowing that accountability is not a factor when it comes to separating the good calls from the bad.
Unfortunately, we'll have to get used to watered-down business coverage over the next 15 months as we head into election season next fall. Much of the business programming will be aimed aimed at politics and the major elections, as well as how the candidates and their favorite issues will affect investors. At Dividend.com, we'll of course stick to worrying about fundamentals in corporate America and taking the pulse of the daily markets instead.
You'll often hear me reciting the importance of repetition on your quest to build wealth. Not only is repetition a vital aspect of achieving wealth, but so is preparation. A spur-of-the-moment decision can sometimes lead to a setback in your plans to be financially responsible. Research shows that knee-jerk moves or emotional decisions can significantly affect your investment returns. According to a recent survey (part of the Barclays Wealth Insight series) that polled more than 2,000 high-net-worth individuals from around the world, more than 40% of wealthy individuals wish they had more self-control over their financial behavior.
Every day I see a different story on the best way to save and invest for retirement. Much of the advice is dumbed-down (example: buy index funds - as if that has made any money for investors the past 10 years) to the point where performance is lacking, forcing one to think if they can ever make any headway in truly building a nest egg.
Instead, think about buying up assets as the rich & wealthy do. My favorite assets are dividend-paying stocks and if you can find a good deal, real estate that throws off positive cash flow (multi-family buildings - especially if you can buy your first ever property and live in one of the units, with tenants covering your expenses). Our "Best Dividend Stocks" list a bit slimmer these days (as our research has warranted that it should be), but there are still stocks we like if you are looking to get your money to work for you. The low interest rate problem we are seeing is not going to change anytime soon, so just sitting in a near 0% money market or Bank CD's hovering in the 1-2% range, will be of little help if you are looking to make much investing headway.
For those of you who are gold bugs, remember, buying gold is a trade that will continue to work - until it doesn't. Sentiment can change quickly for any asset once the public sees it as the only place to be invested. Remember, there is no dividend yield to fall back on for the yellow metal if the pullbacks come. As a trade, I can't argue to how well it has done and could continue to do. I just want to urge caution when it comes to taking huge positions in one particular investment asset play. Although most investors should avoid the trading game altogether , if you do trade, be sure to put in your sell stops to protect any downside, and push up those sell stops if the price of gold continues to move higher.
There were quite a few people away from their desks this past week, as Labor Day week combined with back-to-school makes life hectic for many parents. Things should normalize as we head into the next week, however, especially with 4th quarter earnings season set to begin soon.
Thank you for sharing part of your weekend with me, 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.
Special note - This weekend is a tough one for many who can remember what happened 10 years ago. I shared some thoughts in a post earlier and I'd like to once again take this moment to thank everyone who commit their lives to protecting our great country.
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