Traders were weighing several indicators this morning as they consider which direction the market could be headed. The Thursday jobless claims data continues to track better than we have seen in quite a while. Retail sales were a bit of a mixed bag, though, as we got a bunch of monthly sales updates this morning from numerous retailers (as is the case very first Thursday of the month).
Before we look at the retailers, earnings results did make a mark early on. A solid beat, along with a dividend increase, had shares of TD Bank (TD) moving higher. On the flipside, investors were a bit disappointed with the earnings numbers from PetSmart (PETM) – stock did pull nicely off earlier lows (report here) and auction house Sotheby’s (BID) (more here).
Looking at the winners and losers from this morning’s retail data, The Gap (GPS), The Buckle (BKE) and Abercrombie & Fitch (ANF) were seeing some investor interest, while shares of J.C. Penney (JCP) and Kohl’s (KSS) lagged for much of the session.Taking Ownership Means Being Able to Make Tough Choices
Like many New York Mets fans, I’m disgruntled with where the team is headed in the wake of financial trouble surrounding current Met owners, the Wilpon family. The family is embroiled in a mess with none other than Bernie Madoff (a former family friend who was investing large sums of money for the Wilpons). Some believe the Wilpons were privy to the illegal going-ons with Madoff and his firm.
The Wilpons’ financial fortunes since the start of the allegations have taken a turn for the worse, so much so that the team spent the offseason cutting over $50 million in payroll. That sort of sum is unheard of, especially for a major market team that tends to spend whatever it takes to remain competitive. Met fans are frustrated and the team is losing money, but the Wilpon family has no intention on selling the team at this point (even after the family has had to borrow money from Major League Baseball to pay recent bills). Clearly, by refusing to acknowledge the financial severity of the situation, the owners have put the franchise and its fans in a terrible state.
There’s a financial lesson to be learned here, namely: don’t be like the Mets. If you find yourself in financial trouble, it’s best to accept the hard facts and make tough decisions quickly. Whether you are an owner of a company or simply the head of a household, jeopardizing the future of those around you because you don’t want to admit how bad things are is nothing short of reckless.
Sometimes in life, you need to cut your losses and avoid doing any long-term damage. From that point, you’ll then have to solid foundation to build upon. I understand the Wilpons have owned the Mets for many years and don’t want to sell the team, but if they can’t keep the team afloat, let alone put a competitive product on the field, does their decision to hold on really make any sense?New MLP Report Just Released!
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We recently updated our list of dividend stocks that have been paying out dividends for 25 years or more. Be sure to check out the latest list of names here.Dividends Really Matter
Financial blog DailyReckoning.com recently took a look at the difference dividend payouts made in the overall return investors saw throughout the prior decades. Here are some of the highlights:
- The Nasdaq is down 28% since the end of 1999. Even the “blue chip” S&P 500 stocks are down 15% during that time frame…until you add back those “boring” dividends. With dividends included, the S&P 500′s 15% loss flips to a 6% gain.
- Without dividends, the S&P 500 index would have produced a loss for the 25 long years from August 1929 to August 1954. Then again, without dividends, the S&P 500 produced a 5% loss during the 13 years from September 1961 to September 1974. But with dividends included, the S&P’s loss became a 46% gain.
- Over the course of the last half-century, dividends have contributed more than half of the stock market’s total return — 56%, to be exact.
Of course, you can’t discuss the potency of dividend investing without making mention of how awesome compound returns are. I can’t stress enough the power of compound interest: you take a small amount of money and turn it into a large amount over time. Finding the right companies at the right price points which not only grow earnings, but also grow their dividend payouts as well!Year-to-Date Results Just Posted
Be sure to check out the year-to-date watchlist posts up on the site today. You can see how well many of the dividend stocks we are tracking have done through the first two months of 2012. As always, you can find these and other members-only articles on Dividend.com Premium Articles Page.Go Beyond This Newsletter
We know many of you enjoy reading the daily newsletter, but remember that with our Dividend.com Premium service, the newsletter is just one small component of what we offer. Here are the “Big Three” benefits of our Premium service:
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Thanks for reading, and I’ll see you tomorrow!