The Monday downtrend we have been seeing lately was back this morning. The overseas markets were acting a bit weak as well, which tends to carry over to our markets here. Some market watchers were wondering if the Republican choice for Vice President, Paul Ryan, is being viewed as market unfriendly. That’s a hard tale to spin though, judging by a one day move, let alone a two-hour early move in the markets. The markets did manage to finish off the lows of the day.
As for stocks making headlines, Sysco Corporation (SYY) was up after reporting their quarterly results. This week will be a big one in the retail sector for earnings, as plenty of big names will be out with quarterly numbers.
In other news, Wall Street analyst upgrades helped some shares buck the downtrend, including stocks like J.M. Smucker Co. (SJM), Campbell Soup (CPB), and International Papers (IP). The selling we did have hurt the likes of Wellpoint Inc. (WLP), Humana (HUM), Occidental Petroleum (OXY), and Cummins Inc. (CMI).Savings Rates Skyrocket for the Rich
The 2012 Survey of Affluence and Wealth in America, from American Express Publishing and Harrison Group, reports wealthy individuals questioned in their recent poll have increased their savings rate to 34 percent in the second quarter of 2012, up from just 12 percent in 2007. Fifty-six percent of their available cash is going into savings accounts and money markets in 2012 — that’s up from 24 percent in 2007. The theme of liquidity is clearly taking center stage.
When it comes to the financial markets, only 44% are continuing to put money to work, down from 76% just five years ago. You can look at this startling stat in several ways.
One takeaway from the study is the poor timing for many investors who sold their holdings after the markets dipped. The markets obviously rebounded quickly and very nicely (remember the Dow dropped to 6,500 in March 2009 and is now back over 13,000). On the other hand, with less money coming into the markets, how are the averages still holding up in recent months? Many market “experts” don’t care to give much relevance to declining volumes and would rather you just focus on the levels the averages are currently sitting at. I understand the reality of recent market strength, but potential danger signs pop up, ignoring the signs would be very careless, or even dangerous.
As concerned as some of the metrics we are watching are making us, we are still looking for pockets of strength where dividend investors can be well-positioned in. Taking risk is something we all do in our lives when it comes to investing our dollars. Without taking much risk, the upside is quite limited. However, smart investors also understand a bit of liquidity is necessary whenever one needs to take advantage of great opportunities to put money to work in assets that produce income, especially when the price is right.Our Beat The Markets with Dividend Stocks eBook Has Arrived!
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I hope everyone had a chance to check out our Dividend.com Premium members-only weekend articles , including new features that highlight some of the biggest winners and losers from the week that was, such as analyst upgrades/downgrades and earnings/story stocks. These articles are a great way to catch up on the week that was in the markets. We also have a rundown of how various Dividend ETFs performed on the week.
Thanks for reading everybody. I’ll see you tomorrow!