December 14, 2011 at 16:11 PM EST
Market Wrap-Up for Dec.14 (AVP, BRCM, ABX, NEM, KSS, JOY, more)

The Euro broke below the $1.30 level this morning against the U.S. dollar as uncertainty surrounding the European debt crisis continues to mount. Also, the price of gold broke below the $1600 an ounce mark as the recent attempt to rally on news of ECB’s desire to print as much as it needs to battle the economic conditions failed to materialize.

Gold-mining plays like Barrick Gold (ABX) and Newmont Mining (NEM) moved lower in unison with the drop in gold prices. Also moving lower were shares of mining equipment play Joy Global (JOY) following the company’s earnings results. Wall Street analyst downgrades also weighed on shares of fertilizer play Mosaic (MOS) and retailer Kohl’s (KSS). Bucking the early selling were shares of Broadcom (BRCM) which raised its guidance this morning, but the stock gave back most of the day’s gains by the close. A similar situation occurred with shares of Avon Products (AVP) which announced it will begin searching for a new CEO to replace Andrea Jung, who will be fill the role as chairman of the company. The stock opened nicely higher, but also finished well off the best levels of the day.

Defending a Loss

One of the biggest mistakes we often see from the retail investor to the big money manager is the decision to defend losing positions by buying more and more. When you look at an overall market drop and you see most stocks dip, the reason to buy some more of a quality dividend stock is understandable. However, when you see a stock-specific situation developing and the particular shares of this company sells off day after day for fundamental reasons, the risk you could be throwing good money after bad rises dramatically.

It doesn’t stop with investors. We often see insiders step up and think they know the company’s outlook better than Wall Street. No one could argue, shouldn’t they? Yes and no! Yes, they may have a sense the company is doing better than their rivals, but if the industry they are in has a potential expiration date, Wall Street will not wait long to begin pricing in the likelihood the company becomes yesterday’s news. Will Wall Street get it wrong from time to time? Yes, it can, but more often than not, they are going to be right (the stock tape is ultimately the final judge and jury).

Think about this when you are examining what you may own in your portfolio. We have many new investors that join our newsletter/service every day looking for a better investment strategy. Some of these investors may be holding some stocks that have little chance of ever coming back to their old highs. As I’ve said in the past, you must not be ever be afraid to pick those weeds out and use whatever monies left to put to work in quality dividend-paying stocks.

Just like mold that can grow on food or weeds in a garden, no one likes to see it and can’t wait to get rid of it. Treat your portfolio with the same sort of care.

2011 Has Been a Big Year for Dividend Stocks!

It is always great to see the media tip their hat to what has been a great year for dividend-paying stocks. We’re seeing several major media outlets publishing articles about how dividends were a big investing theme in 2011.

The truth is that we tend to see solid years more often than not in the dividend world, but the business media focuses their attention instead on the high-risk momentum action. Only in times of extreme duress does the media seem to focus on our dividend niche. Regardless, we won’t be distracted from our job of finding the best dividend names to put fresh capital into.

I’d like to thank all our Dividend.com Premium subscribers and newsletter readers for helping spread the word about our service. It means a lot to us, and telling loved ones about Dividend.com is the best possible gift you can give to us this holiday season.

Our Beat The Markets with Dividend Stocks eBook Has Arrived!

We just debuted our brand new 275-page eBook, exclusively on Dividend.com! In this digital-only book, we look ahead to 2012 and the main factors that could affect dividend investors. A $39.95 value, the eBook is a free download for paid Dividend.com Premium subscribers.

Beat The Markets with Dividend Stocks contains a full economic forecast for 2012, including in-depth analysis on 65 of the biggest dividend stocks out there. It’s a great way to get prepared for your investing next year! So head over to the Dividend.com Premium homepage now to download your copy.

A Dividend Capture Strategy for Active Investors

We now offer complete U.S. dividend data for all Dividend.com Premium members, so anyone that focuses on “Dividend Capture” trading strategies should have plenty of good stuff to research each day. Just check our enhanced Ex-Dividend Calendar, which is the best in the business, to search for upcoming payouts.

Speaking of dividend capture, Dividend.com Premium members can also access a 9-page report we published on the essential elements to any successful dividend capture strategy. Be sure to check it out here on the Premium homepage.

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.

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