Similar to last Tuesday, the markets were moving higher for the most part (excluding the Nasdaq index) following a plethora of earnings reports. This move came despite home prices data coming in worse than expected.
The biggest earnings winners included names like Baker Hughes (BHI), Hershey Company (HSY), Parker Hannifin (PH) (which also reported a dividend raise), AT&T [[T], and 3M (MMM). Speaking of dividend raises, IBM Corp (IBM) came out with news of a dividend hike as well as expanded share buyback. On the downside, shares of Reynolds American (RAI) were lower following their earnings results, as were shares of Coach (COH), which also raised their dividend payout as well.
In case you missed them, here’s a breakdown of all the big earnings reports from well-known dividend stocks we covered this morning:
- AT&T Q1 Profit Beats View as Smartphone Sales Rise (T)
- Reynolds American Profit Tumbles on Charges; Adjusted Net Misses View (RAI)
- 3M Profit Beats, Revenue In-Line; Low End of Forecast Raised (MMM)
- Hershey Boosts Forecast as Q1 Results Top Expectations (HSY)
- United Technologies Q1 Profit Beats, but Revenue Misses; Forecast Reiterated (UTX)
- Coach’s Q3 Profit Rises, Beating View; Dividend Boosted 33% (COH)
- U.S. Steel Q1 Loss Widens to $219 Million; Adjusted Results Still Beat View (X)
The government released the latest versions of the annual Social Security and Medicare Trustees Reports on Monday, and unfortunately the funding trend has worsened. The trust fund that holds reserves for the overall Social Security program is now expected to run out of money in 2033, which is three years earlier than trustees expected last year. The Medicare trust fund will run out of money in 2024, which was the projection last year as well, so no improvement there from the bleeding. Meanwhile, the Social Security disability program is set to go run out of funding in 2016, two years earlier than last year’s projections.
Only a fortunate minority of Americans have significant sources of retirement income other than Social Security. Social Security made up 50 percent or more of the retirement income of 66 percent of Americans age 65 and older in 2009, up from 64 percent in 2008. And more than a third of retirees (35 percent) receive 90 percent or more of their income as a monthly payment from the Social Security Administration. The average monthly payout to retired workers was $1,176 in 2010. More than 54 million Americans were paid a Social Security Benefit last year.
I keep saying investors need to take charge of their own investment plans (whether for college, retirement, or whatever the life-cycle event is). Relying on federal entities like Social Security to provide for financial peace of mind can be hazardous to your wealth. Fortunately, many dividend investors are heeding my advice!Finding the Right Investment Strategy is Essential
We feel dividend investing is the best option for the vast majority of the investing public. Putting what you’ve learned into practice is the second step. We advocate investors develop a monthly system of putting money to work in their brokerage accounts. Automate this process as best you can, so as to remove any possibilities of “missing a month” here or there.
Embrace the learning process of investing. You should never stop gathering knowledge along the way. Always be willing to keep an eye on what your money is doing. Staying in the loop is a great thing. You’ll always benefit from staying on top of market and economic moves, and how they affect your holdings.
Just dabbling in the markets will not get you to where you need to be. Instead, stay consistent with your investments. If you have a bad habit of jumping in and out of the markets, dividend investing is the best remedy for your affliction. You’ll gain a new perspective on the results that long-term investing and the power of compound interest can deliver.
We realize many of you have already put these concepts into practice, but market volatility tends to push some investors to the sidelines for extended periods of time. That’s when the habit of trying to “time” the markets takes hold. The danger with market timing is that you need to be right twice — both when you buy and sell. You essentially morph into a trader, and I’ve made it clear how incredibly difficult it is to succeed at trading. Instead, be an investor who seeks to generate income and compounding returns from dividend-paying stocks.The Harder You Work, The More Money You Should Make
Headlines about income inequality continue to be in vogue these days. The discrepancy between the rich and poor is undeniable, and I can guarantee one thing: we will never see a fair balance of wealth. Some of the reasons behind this fact are built into our employment system.
In my teenage years, I took a job at the local post office. In that environment, no matter how hard you worked (or how much you slacked off), your pay raises would roughly correspond with those of your coworkers. No wonder why morale was so low! There was absolutely no incentive to achieve better results. In fact, my fellow postal workers became angry with me for working so hard because it made them look bad.
I quickly realized I needed to challenge myself more and not be capped by the system. Hence, my entrepreneurial spirit was born. I needed to be in a situation where the harder I worked, the more money I made. Starting my own business was the only way I could make that happen.
Rather than being fixated on the thought of “income equality”, taking charge of my career and finances has put me in the driver’s seat. I always recommend others do so as well.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
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.
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- 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 everybody. I’ll see you tomorrow!