The markets were struggling to hold the early gains today, but buyers stepped up in the afternoon to get the averages to close near the highs of the day.
Building on the recent economic optimism, Ford (F) management decided to double the current dividend payout as the company’s yield continues to rebound to a bit better levels (near 4%). As for fundamentals and earnings, Tiffany (TIF) shares finished down following the company’s update on holiday sales. Wall Street analyst upgrades helped boost stocks like Altria Group (MO) and Ryder (R).
On the flipside, cautious analyst chatter had names like Microsoft (MSFT) and Dunkin Brands (DNKN) trading in the red. Finally, shares of Nokia (NOK) climbed higher on the company’s better-than-expected sales update. Be sure to check out our post on whether Nokia shares could be on the path of a turnaround or if this move is up is real or just a head-fake.Avoid Building a Bridge to Nowhere
I am sometimes asked if I miss trading for a living. I can say with 100% certainty “no way!” Despite making a good living from trading stocks for years, I was building very little in terms of wealth for the long term. Plus, the strain on your brain to make numerous timing decisions does not make for a great quality of life.
Every day, week, month, and year, you start from scratch again. There are no guarantees you can continue to read the market tape as well as you think you will. You’re only as good as your last trade. One bad decision can wipe out months of gains. Then there’s the constant lure to lose your trading discipline. You start to question yourself even after making good trades. You must also deal with the regret of not holding shares for an extra day or two. In the end, it’s all about surviving to trade the next day. I know the business media paints the trading gains as glamorous, but there is plenty of carnage that keeps the success rate abysmally low — regardless of what software, guides, subscription services, forums, or other tools you use.
Rather than living in the trenches of trading warfare, I decided to build a system that could make compound interest alleviate the worries of surviving as a trader (not to mention I wanted to remain in an area where my wealth can grow immensely over time). Dividend investing offers those rewards for those who are willing to be patient and understand how awesome compound interest can be, particularly when reinvesting dividends and focusing your aim at buying assets (dividend stocks) that build income. We all can surely use income streams in retirement other than just social security or a pension that fewer and fewer employers are even offering.
So instead of focusing on short term stock movements and the manic advice of today’s media mavens, continue on your path of building a bridge that you can one day walk across. Your bridge of wealth can potentially even leave a solid legacy in place for generations to come.Our 2013 Dividend Stock Guide Has Arrived!
Our new members-only eBook has just been released! This 250-page guide to investing in 2013 contains a concise economic forecast for next year, including full previews for 60 big-name stocks! Be sure to head over to Dividend.com Premium and download it and get your game plan in place for all good things dividend-related in 2013!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!
We have much more about why Dividends are so awesome if you check out our “What is a Dividend?” page here.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.
We don’t ask for a credit card to use our free trial, and we don’t bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Dividend.com Premium a shot if you haven’t already subscribed!
Thanks for reading, and I’ll see you tomorrow!