The major indices held steady at the open this morning, taking a breather after yesterday’s rally. By the close, stocks climbed ever so slightly. A worse-than-expected consumer sentiment survey from the University of Michigan and higher-than-expected producer prices did not seem to spur much of a reaction from investors.
We got a couple of big earnings before the opening bell from financial services giants JP Morgan (JPM) and Wells Fargo (WFC). Both companies saw a big rise in profits and revenues, beating estimates. Though Wells Fargo closed higher, JP Morgan shares edged lower today.
Software and IT services company Infosys (INFY) also reported earnings that pleased investors, which caused shares of the Bangalore, India-based company to rally.
Meanwhile, shares of UPS (UPS) plummeted after the company cut its earnings outlook.
Boeing (BA) shares also took a hit from the mid-day on after yet another mishap on its Dreamliner 787.
Wall Street analyst upgrades of Xilinx (XLNX), Quality Systems (QSII), and Alaska Air (ALK) helped those stocks close in higher ground during the day’s trading. Downgrades of Pfizer (PFE), Bristol-Myers Squibb (BMY), and Kroger (KR) dragged those shares into negative territory.
Be sure to check the Dividend Daily for all the latest earnings reports, analyst moves, and much more.No One Cares More About Your Money Than You Do
On Wednesday the Securities and Exchange Commission voted to lift an 80 year ban that prohibits hedge funds and other firms seeking private investments from advertising. Now we should all be prepared to see commercial after commercial from these firms seeking investments from all sorts of people.
While these hedge funds and others private investment firms are said to be only allowed to receive investments from “accredited investors” (those who are wealthy and supposedly better to gauge risks), I’m not sure how long this policy may last — especially as the firms seek money through public advertising. In attempt to raise money and boost the oh-so-important assess under management, I believe that these firms will do everything in their power to skirt the rules and take money from anyone they can. They’ll use their new marketing abilities to attempt to lure average investors, who are mostly saving for retirement, with promises of enormous returns. This could end up doing much more harm than good for investors.
Typically hedge funds charge exorbitant fees while promising these enormous returns. But in reality, most ultimately fail to beat the market with their investments, which ends up burning investors. However, the hedge fund still brings home a profit with all of the big fees charged. In the end, the hedge funds do not care about performing well or beating the market, but getting as many clients as possible to boost assets under management and getting their guaranteed cut. For income investors, these hedge funds, and many other private investment firms, are a risky area to put your money, regardless of their eye popping promises. Try not to be allured by the upcoming advertisements that will undoubtedly seek your investments.
Ultimately, no one cares about your money more than you do, so it is best for you to make your own investment decisions. With a little research and some intelligent moves, you can make sure you allow dividend investing and the power of compounding interest build your wealth — without all of the charges and downside risks.Looking Toward Next Week
Looking ahead to the next week for stocks, the summer earnings seasons starts to pick when we get financial releases from Citigroup (C), Johnson & Johnson (JNJ), Coca-Cola (KO), Bank of America (BAC), IBM (IBM), Intel (INTC), Morgan Stanley (MS), and many others.
Thank you for reading. I hope you all have a great weekend!
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