Despite continued turbulence in the global news flow (S&P downgrading Spain’s debt once again, Greece’s unemployment rate jumping over 25% for first time ever), traders have been viewing the recent stock tape action as nothing more than the usual pullback. With the amount of bailouts or rumored bailouts, it has paid to be a buyer on any pullbacks. Will this trend be changing? We’re certainly keeping an eye on this potential shift.
Tobacco plays like Reynolds American (RAI) and Altria Group (MO) continue to lag the action as some market watchers fear the as-of-yet undetermined potential dividend tax rate hike as a possible overhang. Some long-term holders of these stocks could be positioning themselves to avoid the possible dividend tax hike for next year. As I’ve said numerous times, we at Dividend.com will withhold judgement on a potential dividend tax change until it’s actually decided. As of now, any tax changes are just political footballs being passed around in attempts to sway voters this election season. We’ll be sure to keep readers abreast of the exact change, if and when it’s finally decided. One final note on the potential for higher dividend taxes: just remember that we’ve seen much higher dividend taxes in the past, yet dividend stocks still outperformed non-dividend stocks over the long term by a wide margin. With interest rates are all-time low levels, people looking for for solid yield will still find it in dividend payers, regardless of the potential tax hike.
Looking at earnings-related moves today, Fastenal (FAST) jumped higher following its earnings results. The company also announced a 10% boost to its dividend payout. Meanwhile, supermarket giant Safeway (SWY) headed lower following its earnings numbers released before the bell. Despite the late-day pullback, credit card names like Mastercard (MA) and Visa (V) remained resilient as momentum traders pushed those key plays higher.Pacing the Wins
You have probably heard me use the phrase “hustle” when I describe the work ethic many successful individuals tend to display. In order to achieve a regular dose of accomplishments, however, you must consider how to pace your mind. You need to be able to focus on the key tasks that need to be completed throughout each day. I tend to take copious notes in a daily notebook I keep, so I have constant reminders of my headline tasks that need to be addressed.
Whether you are an entrepreneur like myself or you work for a corporation or small business, you should consider formulating a daily plan to highlight the biggest moments of each day. When it comes to investing, the same idea makes a ton of sense as well. Plan to regularly review the earnings results of stocks you own (or are considering owning), and take note of how the stocks react following earnings results or analyst commentary. Also, building long-term wealth involves a methodical approach of committing capital to investments on a regular basis. I tend to recommend investors consider making monthly deposits in their brokerage accounts, and using those funds to purchase the best high-quality dividend stocks possible. This process will help you avoid the mistake of trying to time the markets, which is almost impossible (even for the most experienced and sophisticated investors out there). Remember, no one can pick an exact market top or market bottom!
All the things you plan well for will eventually lead to piling up wins, both in your career and in your investing. There are only so many hours in each day, however, so try and budget your time as wisely as possible. Identify the most important tasks you absolutely need to accomplish each day, and make sure you get those done. Challenge yourself to get as much done as you can, but if you try to do way too much, you’ll likely burn out. Plus, you may eventually lose the ability to discern between a legitimate opportunity and one that’s just a waste of time.25 Years of Dividend-Increasing Stocks
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!New Watchlist Article Out Today
Be sure to check out our weekly Top 50 High-Yield Watchlist Names post that is out today, exclusively for Dividend.com Premium members. This list gives readers a good idea of what stocks we’re watching behind the scenes here for potential upgrades.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:
- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.
- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.
- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a “Dividend Capture” trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.
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Thanks for reading, and I’ll see you tomorrow!