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.
Thanks for reading, and I’ll see you tomorrow!
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