Market jitters surrounding Greece and the potential for further money coming out of the country’s banks cast a cloud over the late-day session, pushing the indices to close in the red.
The early money flow didn’t go into any of the earnings plays today, with stocks like Abercrombie & Fitch (ANF), Staples (SPLS), and Deere & Co. (DE), all lower following their disappointing results. Meanwhile, General Electric (GE) is higher on news GE Capital will resume paying the parent company a dividend. Wall Street analyst upgrades helped push stocks like Pepsico (PEP) higher, while semiconductor equipment play KLA-Tencor (KLAC) closed down on cautious analyst comments. Finally, shares of J.C. Penney (JCP) got walloped (down 20% or $6.57) on yesterday’s late-day news the company was suspending its dividend.
I was reading a CNN Money article recently titled “Seniors Clamoring to Get into Facebook IPO.” With a headline like that, I simply had to read it.
Well, the article went exactly as I expected it to go. Retired individuals are looking to roll the dice on the biggest new tech IPO in several years. People interviewed in the piece were retired doctors, engineers, etc., and all seemed to be in good shape financially. Is it wrong to take a shot at buying Facebook shares on the IPO debut? It’s difficult to say.
On one hand, Facebook could eventually go the way of MySpace and die a slow painful death. Or, the company could emulate Google, aggressively buying new technologies and innovating in its core businesses to solidify its spot atop the social media landscape. Being the dividend lovers we are, we aren’t paying much attention to Facebook since it won’t pay a dividend. However, we realize the new IPO is a “big deal” for a lot of investors.
Just yesterday, General Motors (GM) announced it would stop its marketing initiatives on Facebook, failing to see results to justify the ad spend. Relying simply on advertising (as Facebook does) is a dangerous spot to be in any economic environment. My gut tells me Facebook will attack several revenue opportunities that its large audience provides, but until they do so successfully, the only monetization strategy is indeed in-page advertising for now.
If you have aspirations to buy Facebook shares on Friday, we wish you luck and hope it works out for you. Like I said, it may work for a bit, but then again, it may not. As a trader in my earlier life, when the edge wasn’t there, I’d tend to look elsewhere. Fast forward to less stressful days of long-term dividend investing, and we’ll stick to looking at consistent and dependable dividend-paying businesses that will support our more reliable wealth-building strategy.Staying In Your Lane
How many times have we seen a baseball player who’s traditionally a singles and doubles hitter try and change his approach to hit more homers? These players often suffer both statistically (lower batting average) and financially (when it comes time to sign a new contract, the underperformance weighs down teams’ offers).
Investors encounter similar dangers when changing their time-tested strategies. Whether it’s trading more frequently or struggling to manage larger share amounts, when people don’t stay in their lanes, underperformance usually ensues.
Just look at the last real estate bubble, when free-flowing capital allowed many investors to get in way over their heads. Even some of the most disciplined and responsible home builders got caught up in the euphoria of runaway home prices. Eventually, so many homes were built that a glut of inventory formed, pulling down the market further and putting plenty of builders out of business.
Today’s investors have much more data at their fingertips, so you’d think they’d make less mistakes. With more knowledge comes more success, right? Well, not necessarily. Now we have more distractions than ever, and human nature often dictates that people simply bite off more than they can chew.
So when the next next euphoric bubble forms, and the lure of quick, easy money becomes too great to ignore, just remember: stay in your lane.An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our Best Dividend Stocks List are the names we currently like for new investor capital, regardless of what date the stock was first recommended on. If and when a stock is removed from the list, we will clearly state whether the stock should be sold (which is rare but occasionally will happen), or simply held in one’s account until we see a better entry point or catalyst.
And here’s one last thing to remember about what we do here at Dividend.com: it’s not just the names that we recommend that can help you build wealth, but also the things we try to steer you away from that are just as important. Forget about speculative or penny stocks, chasing unprofitable IPOs, and listening to the manic talking heads in the business media!Our Beat The Markets with Dividend Stocks eBook Has Arrived!
We just debuted our brand new 275-page eBook, exclusively on Dividend.com! In this digital-only book, we look ahead to 2012 and the main factors that could affect dividend investors. A $39.95 value, the eBook is a free download for paid Dividend.com Premium subscribers.
Beat The Markets with Dividend Stocks contains a full economic forecast for 2012, including in-depth analysis on 65 of the biggest dividend stocks out there. It’s a great way to get prepared for your investing next year! So head over to the Dividend.com Premium homepage now to download your copy.A Dividend Capture Strategy for Active Investors
We now offer complete U.S. dividend data for all Dividend.com Premium members, so anyone that focuses on “Dividend Capture” trading strategies should have plenty of good stuff to research each day. Just check our enhanced Ex-Dividend Calendar, which is the best in the business, to search for upcoming payouts.
Speaking of dividend capture, Dividend.com Premium members can also access a 9-page report we published on the essential elements to any successful dividend capture strategy. Be sure to check it out here on the Premium homepage.Dividend.com’s Very Own National TV Commercial Has Debuted
Our first-ever television commercial! has started running on CNBC and the feedback has been wonderful. If you haven’t seen the link yet, you can check out our commercial here.
Thanks for reading everybody. I’ll see you tomorrow!