The market continued yesterday’s rather confused reaction to what the Federal Reserve has planned for the markets and economy (more money printing). The indices had trouble making much traction for much of the session. As investors and market watchers continue to try and figure out what will happen to capital gains and dividend tax rates [...]
The market continued yesterday’s rather confused reaction to what the Federal Reserve has planned for the markets and economy (more money printing). The indices had trouble making much traction for much of the session.
As investors and market watchers continue to try and figure out what will happen to capital gains and dividend tax rates next year, we sit by and continue to look for good investment opportunities. We’re also focused on any potential negative factors for specific stocks that investors need to be aware of.
Best Buy (BBY) shares finished higher as once again we heard reports of an impending offer to take the company private. CVS Caremark (CVS) rallied following the company’s guidance for 2013, as well as news it was raising its dividend payout generously (it still yields below 2% though). A Wall Street analyst upgrades helped boost Brinker International (EAT) while a sell call had shares of Lexmark International (LXK) trading in the red. Finally, Apple (AAPL) shares drifted lower following an analyst call worrying about a potential drop in iPhone 5 sales.
The Unfortunate Trend That will Cause Portfolios to Underperform
Retail (mom and pop) investors have a lot to think about these days when it comes to developing an investing game plan. The key is finding a successful strategy, such as putting money into dividend-paying stocks monthly, and sticking to it. This practice will allow investors to harness the power compound interest. Accordingly, they should also focus on their core foundation by getting the most out of their professional career, which is the root of where most money will come from.
The one last thing to keep in mind as we continue to push investors to consider individual dividend stocks over other forms of dividend-focused investments (ETFs, mutual funds) is that the latest data on individual investors shows lesser involvement in owning individual stocks, whereas hedge funds/professional investors are increasing their exposure to individual stocks. This could be the latest installment of how the business media scares investors away from picking quality stocks and into diversified, diluted products like ETFs and mutual funds. Keep that in mind as you look to see your investment capital perform at the highest level.
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:
- 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.
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