Dividends4Life: Don't Chase Leading Dividend Stocks

Don't Chase Leading Dividend Stocks

Posted by D4L | Monday, January 30, 2012 | | 1 comments »

It's been a strong January so far, and top-performing dividend plays are enjoying the ride. Through Monday's close, the Nasdaq has risen nearly 7% since Jan. 1. The S&P 500 is up almost 5%. Of course, with strong rallies come pullbacks. The reason is not only old-fashioned profit-taking.

The fourth-quarter earnings reporting season is revving up this week, and company earnings outlooks for the first quarter and the full year can impact market direction as much as big news from overseas. As an investor, you must maintain discipline even when the major averages are riding higher. If a stock has run past a proper buy point, do not chase it. Watch for a gentle backtrack to the 10-week moving average, a three-weeks-tight pattern, or a brand-new base before putting fresh cash to work.

Source: Investor's Business Daily

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1 comments

  1. farm land investment // January 30, 2012 at 6:47 PM

    Quite agree. Best thing to do with any investment is set a price you think it will run-up to based on fair value or whatever criteria you use to make your investments, and then sell at that point. Likewise, do not be afraid to stop out losses either. By the way, there was an article in one of our UK papers' finance sections which talked about a possible "dividends bubble" - biggest bunch of bollocks I've read in quite some time.

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