Even as the promised cuts from the “sequester” become reality, investors are not showing all that much concern for the potential economic effects of the budget changes ahead. Remember, you are dealing with a market that is seeing the Dow and S&P touching all-time highs, and investors who have been sitting on the sidelines for a big part of the run are seizing any and all pullbacks as entry points to get stock exposure. Will this strategy work? More on this issue below.
As retailers continue to vent about seeing less consumer spending (thanks to the payroll tax hike which went into effect in January), housing and car sales data appear to be holding up for now. Again, what really matters is the period ahead and whether we can see a higher level spending persist in bigger ticket items. Speaking of retailers, Gap Inc. (GPS) shares rose following the company’s earnings results and word of a dividend hike. Target (TGT) also rallied on the back of positive Wall Street commentary from a major analyst. Ford (F) shares ended flat after the company reported February sales that shows consumers are still buying automobiles in decent numbers. Finally, shares of Goldman Sachs (GS) gained as the company once again came out on top in the investment banking M&A fee segment.
The market of late has a feel that investors are not being as patient with their capital as maybe they should be. Now we of course believe investors should be putting money to work consistently in the markets, but at some point, that also means being a bit more selective. There’s an investing adage that captures the mindset I believe we are seeing: investors always feel most confident when assets are ramping with little pullbacks to speak of. The “I can’t lose” mantra can often make investors a bit too reckless.
This past Monday the markets got a taste of what pullbacks can feel like, and if you were taking an investor’s temperature that day, a fair amount would have probably been a bit under the weather. Where we see pullbacks as a healthy thing for the markets, investors that start pressing can often get sloppy with how they commit capital to take advantage of the bullish appetite of the markets. There are plenty of positive underpinnings that have been driving asset prices higher, but you must remain disciplined in how you decide to invest your hard-earned capital.
The financial gurus of today’s media landscape can often paint a picture that they have caught every move and have fully taken advantage of the up markets, but that doesn’t often tend to be the case. In a world of low interest rates, chasing assets to buy “at any price” can quickly make a good portfolio not look so hot when the euphoria wears off — which often happens in the markets when investors least expect.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 month of 2013. As always, you can find these and other members-only articles on Dividend.com Premium Articles Page.NEW! Stock Charts on Dividend.com
We just added a great new feature to Dividend.com this morning: stock charts! Now you can view long- and short-term charts for all the dividend stocks we cover. Just look up a company or symbol using the “Company or Symbol” search box in the upper left hand corner of any page on the site, and you’ll be taken to our brand new stock profile pages. Stay tuned for more great features as we continually strive to improve your Dividend.com experience.Looking Toward Next Week
Looking ahead to the next week for stocks, we continue to see the number of earnings releases for the quarter wind down. Some of the companies reporting next week include Men’s Wearhouse (MW), Staples (SPLS), Kroger (KR), and Foot Locker (FL).