As traders continue to hope for further gains from the Fiscal Cliff resolution rumors, the markets are getting closer to calling it a year for 2012.
There are numerous bullish forecasts being set by market experts for how 2013 will fare, but there are plenty of headwinds facing corporate America next year — likely nothing bigger than the implementation of Obamacare. We expect to hear about this topic much more as 2013 unfolds. What will it ultimately mean for an already fractured job market? Probably more of the same “keep it lean” mindset from those doing the hiring (and firing) in big and small business America.
Looking at today’s stock headlines, plenty of earnings reports moved several names. On the upside we had stocks like Jabil Circuit (JBL) and ConAgra Foods (CAG) gaining ground following their better-than-expected results. On the flipside, earnings news from Discover Financial Services (DFS), Darden Restaurants (DRI), Paychex (PAYX), and Accenture (ACN), were not met with much investor enthusiasm. Finally, Deutsche Bank was out with a bullish call on lodging plays, naming Starwood Hotels (HOT) as its favorite name of the bunch.
Be sure to check out The Dividend Daily for all of our latest coverage on earnings reports, analyst moves, and much more.The Diminishing Returns of Massive Fed Printing
As the Federal Reserve announced the latest fiscal band-aid (QE4) recently, it made sense to go back and look at how the markets have reacted following the liquidity events. There is no question the first burst of liquidity (QE1) had the biggest effect with the S&P gaining 50%. QE2 was followed by a 30% return. QE3 was then followed by an 18% return, and the current plan, QE4, has netted the S&P about 10%. The pattern should be obvious: we’re seeing diminishing returns for each subsequent liquidity injection. As I’ve noted many times, this pattern isn’t much different from Japan’s string of endless interventions to prop up struggling banks (and the rest of its economy). The story in Japan continues to be one of lower birthrates, 0% interest rates, high unemployment (especially among younger citizens), and an overall very weak economy.
The big question is how far will U.S. policy makers go with not letting the economy eventually go through a normal recessionary period. Japan felt they could disrupt the cycle and we see how ineffective that plan eventually became. For investors, the plan is to continue to monitor economic events as closely as need be, for as decisions get made in Washington, the repercussions can easily reverberate in how well you position your portfolio going forward.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:
- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.
- 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.
We don’t ask for a credit card to use our free trial, and we don’t bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Dividend.com Premium a shot if you haven’t already subscribed!
Thanks for reading, and I’ll see you tomorrow!
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