January 18, 2012 at 16:05 PM EST
Market Wrap-Up for Jan.18 (GS, STT, PNC, LLTC, TXN, more)

Earnings season is often the most dangerous time to be a trader. For dividend investors, however, the market’s reaction to earnings reports can present a welcome opportunity. If a stock gets beat up for just meeting analyst estimates, we’ll sometimes see momentum traders scamper for the exits over several days, making stocks we’ve been watching much more enticing.

Much like yesterday, today’s market action was to the upside, making it tougher to find solid entry points. Despite that fact, we will not hesitate to make a move if we like a dividend stock’s prospects near and longer-term.

The market acted well, despite several well-known financial names reporting disappointing numbers. The names that didn’t participate in today’s rally included State Street Corp (STT) (report here), Bank of NY Mellon (BK) (read more), PNC Financial (PNC) (earnings here), and Northern Trust (NTRS). The one financial name that did enjoy nice gains was Goldman Sachs (GS), which easily beat analyst EPS estimates. Wall Street analyst upgrades also moved the tape higher for the likes of Kraft Foods (KFT) and Ralph Lauren Corp (RL) (read more about these upgrades here and here). Also moving up strong today were semiconductor plays, following a positive report from Linear Technology (LLTC). Being pushed higher as well were shares of Altera Corp (ALTR), Analog Devices (ADI), and Texas Instruments (TXN).

Now here’s a word of caution when it comes to analyst calls during earnings season. I’ve seen many instances where analysts like to play “catch-up” as far as earnings estimates go, either by raising or cutting numbers just before a particular company’s report, only to see the stock move in the opposite direction (stock rallies on a bad report or declines on a good report). So again, just keep this factor in mind as you evaluate stocks that may be on your watch list.

Who You Calling Rich?

Have you ever been a part of a conversation when someone decides to anoint a particular individual with the “rich” label? There’s not really anything wrong with it, except for when the next part of the conversation moves on to discrediting how he/she was able to get in their particular position.

Sure, sometimes people born into wealth squander their head start and blow their family’s fortune. Those folks are in the extreme minority, however. The vast majority of “rich” people I’ve known have accumulated wealth as a result of taking risks, working very hard, and spending and investing their money wisely over time. These factors are present no matter what avenue people travel down toward building wealth.

Another mistake people often make when discussing “rich” people is assuming how “lucky” they are. Again, most people have built fortunes through hard work and sacrifice. Luck usually has very little to do with it.

Finally, I urge you to be wary about how you discuss the wealthy around children. Young people are very impressionable, and the last thing you want to do is attach a negative stigma to those with money. As I’ve outlined in this newsletter, building wealth over the long term is not that difficult. Make sure your children or grandchildren understand that. Encourage them to dream big!

I tend to excuse myself whenever a negative cloud begins to build about how or why someone is “financially fortunate.” I exercise my mental muscles each day along my own path to wealth, so why sit among company who will only discredit my goals?

Story Behind Every Statue

Whether viewing a religious statue, a statue of a world leader or politician, or one of a great athlete, all of these monuments have stories behind them. Most of us will never have a statue erected in our memory, but many people build their own kinds of “statues” to commemorate their accomplishments.

Some will buy a shiny new (or classic) sports car. Others will purchase that massive home they’ve always dreamed of. Still others will eye up that gold Rolex as a reward for their hard work. There’s nothing wrong with desiring these dream objects. Just be sure you’ve first invested your money wisely in assets that produce income. Once you’ve built up the financial wherewithal to buy some much-deserved “toys,” then enjoy yourself!

Income, Income, Income

At Dividend.com, we maintain our focus on the best income-producing investments the markets have to offer during time of heightened volatility. We want to make sure we have only the most pullback-resistant names on our Best Dividend Stocks List. Also, if we see the market putting in what looks like a decent bottom, we will be prepared to scale up the list of stocks we like. Stay tuned and be sure to look for Dividend.com Premium member alerts along the way. Don’t count on the government or your employer to set you up for a remarkable retirement. Take control, do your own research, and achieve your goals yourself!

Go Beyond This Newsletter

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Thanks for reading everybody. 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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