As countries around the globe try to beat each other to the punch and print their way out of debt, equities have been attracting money out of bond markets. This is a trend we are watching closely, but we also know that new hands can sometimes be shaky hands when it comes to holding on to new investments. We continue to scan the data and look for potential new names to add to our recommended list. At the same time, earnings season is upon us, so we expect to see some of the fundamentals in various industries become a bit clearer. As always, we will keep premium subscribers informed of any immediate changes made to our Best Dividend Stocks List.
Looking at today’s action, Dell (DELL) added to yesterday’s lift on news the company may be in talks to be taken private. Apple (AAPL) shares dipped below $500 as another analyst shaved his earnings estimates and price target ahead of the company’s earnings news due out next week. Meanwhile, V.F. Corp (VFC) closed flat following yesterday’s pop on news it has an acquisition target in its sights.
Elsewhere, we saw positive analyst calls on Caterpillar (CAT) and Boston Properties (BXP) help those shares buck the early weakness. On the flip side, negative notes on Con Edison (ED) and American Express (AXP) had both of those names finishing in the red.
Making Snap Decisions
The New York Times ran an interesting piece this weekend about the state of mind gamblers are in when they are playing casino games. The focus was on how slot machines are now designed to make players feel almost as if they’re actually winning, even when they’re losing (players lose most of the time). I find the same effects happening in the markets these days.
Today’s version of business media, whether on TV, online, or other mediums, continues to come at us at lightning speed. With less and less time to process, active investors (i.e. traders) have seen their stress levels increase dramatically. It’s harder than ever to maintain a balance of discipline and investing/trading intelligently. The media will tell you that you can “play with the big boys” on Wall Street because of cheap trades, quick executions, and mountains of data to help you make those snap decisions. What they won’t tell you is that making quick investment decisions often leads to far more losses than gains.
To build great wealth in the markets, you need patience in your decision-making. You also need a longer time frame than just one day, one week, or one month to allow your investments to grow.
Now if you’ve got plenty of discretionary capital and want to try and sit down at the poker table with the Wall Street trading pros, no one’s going to stop you from trying it. However, I can think of many other great things you could be doing with that extra wealth instead (think building a new business or becoming a partner in an existing business). In the meantime, heed some of these examples I share in this newsletter each day. Consider how awesome income investing is, and how well it’s worked for those who have remained patient over the years. When you focus your money and energy toward finding quality dividend-paying stocks or other income-producing investments, you’re much more likely to find long-term success.
Thanks for reading everybody. I’ll see you tomorrow!
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