Market Wrap-Up for Feb.21 (WMT, FL, HD, LOW, THI, more)

Despite decent economic data, the markets pulled back for a second straight day. Remember, thoughts of the Federal Reserve removing liquidity hung over yesterday’s afternoon session. That same chatter remains in the markets today.

Looking at some of today’s movers, Wal-Mart Stores (WMT) shares bucked the overall selling after the company announced a generous dividend hike (18%) along with its earnings results. Speaking of retailers, Foot Locker (FL) finished nearly unchanged on news the company is authorizing a share buyback program as well as a dividend hike. Getting back to earnings, the reactions were not as good for shares of Fluor Corp (FLR), Walter Energy (WLT), and Tim Horton’s (THI), which also announced a solid dividend hike (nearly 24% increase). In other news, Wall Street analyst downgrades hurt the home improvement giants, Home Depot (HD) and Lowe’s (LOW), weighing on the shares for much of the session.

“That’s it, I’m Done”

It never fails that when we have market days like yesterday (down several percentage points on the averages) we will get some of our Premium trial users reach out and say they will not be moving forward with their trial (actually our trials are free for 14 days and with no credit card required, users can just let it expire on its own). Sometimes it will be from someone who uses the trial for a day or two, but the market sell-off is enough to scare some of them away from investing in the markets for at least the near term. And in some cases, they may never come back.

Timing in life is everything for some people, but stepping back and avoiding such a knee-jerk reaction will only benefit you along the way. That way, you’ll be open to opportunities as they appear.

As such, I have always pushed back on looking at the scoreboard the minute you purchase a stock. Sure it feels great to see a stock tick higher the same day you buy it, but if you are looking to build wealth long term, patience is an absolute requirement.

If the markets went up every day, then I guess none of us would ever need to do any research. But we all know that’s never been the case. There will be streaky periods, both good and bad. The best thing to know about the history of the markets is the down times are much shorter than the good times. That’s a track record we can all rely on for how we decide to put our capital to work. Seasoned dividend investors don’t look at periods of pullbacks as bad times, unlike those who are betting everything on the short term. Keep these concepts in mind when the markets go into pullback modes, because they have always happened throughout history (and will continue to happen from time to time).

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 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 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 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 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 Premium a shot if you haven’t already subscribed!

Thanks for reading, and 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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