This from Whiskey & Gunpowder:

There has never been a better time than right now to buy stocks. I know what you’re thinking — it sounds strange considering the enormous volatility in the market. But, I’m not talking about just any old stocks. I’m talking about stocks that produce real income.

In these manic times, you need to keep one important idea in mind when stock shopping: dividend yields. If there is one proven way to make money during any market condition, it is investing in companies that offer low, growing dividends. In fact, 97% of all gains in the S&P 500 over the last 80 years have come from reinvested dividends, according to one study.

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The Deficit Time Bomb

Well, Election Day has come and gone…and our deficits are still there…and growing…

Those deficits are going to wreak more havoc on the economy and individual savings than can be properly imagined.

We’re still offering solutions in our “Personal Bailout Bundle” and it’s still exclusive till Dec 21. Don’t miss out. Just click here to read more.

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If you are sitting on a huge pile of cash in a nice big home that you own outright, go ahead and reinvest your dividends. But if you worry about your bills, dream about helping your kids out more, or just wish you could eat dinner out a few times a week, those dividends can be the best solution.

Take a step back and analyze the situation. When you invest in a dividend-paying stock, you have the option to put those payments back into more stock or cash those checks to boost your lifestyle.

But there is a third option that most don’t even know about…

DRIPing Money into Your Retirement Savings

Many dividend-paying companies offer Dividend Reinvestment Plans, or DRIPs. These plans allow you to “set it and forget it.” Just buy some shares, set up the plan, and let the company do all the hard work. If all things go well, your money — and your stake in the company — will increase and be waiting for you when you retire.

Most investors, however, have no idea that they are allowed to split their investment. Instead of putting all of your shares in the DRIP, you can actually allocate some to pay you via dividend checks and others reinvested. That gives you both the spending power of dividends now and a savings element to work for you until you need it.

Think it can’t get any better? Well, many companies make their DRIPs even more enticing.

Certain companies allow you to both receive dividend checks in the mail and buy more shares for a discount. If you are enrolled in these companies’ DRIPs, your dividends will actually buy you up to 10% more stock every payment.

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The End of Cheap Oil

You wouldn’t think so. After all, oil prices just plummeted…

But the fundamentals are clear as day. Oil is destined to get a lot more expensive.

It’s going to change life in the U.S. and the world…forever…but you can protect yourself and prosper… Click here to take advantage of oil’s temporarily lower prices.

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Matched Gains Without Working a Day for the Company

Here’s how it works:

You want to invest in Company A. That company wants you to reinvest your dividends back into more shares. So, they offer — as a benefit for signing up for their DRIP — a market discount on every purchase. Company A will take your shares and sign you up for this plan. When the dividends come out, they’ll reinvest them by buying more shares for you at a 10% discount to the market price.

It’s as if the company was matching 10% of your investment just like an employer-based 401(k). Here’s the best part: Most companies will let you split your shares into half “pay now” and half “reinvest for later.” So you are collecting current income from half your dividends, while saving for your retirement through an employer-like “matched gains” program with the other half.

From your perspective, it’s exactly like working for the company without ever lifting a finger. You are basically treated as a long-term employee. Better yet, at the end of the day, you still own all of your shares. And shares of companies that offer consistent dividends and DRIPs typically increase in value over a few years. Even in this market.

And you can do this with as many different companies as you want.

There are already over 1,000 DRIPs, most of which allow you to split your shares, and a few hundred of these “matched gains” retirement plans. Many more are jumping on this bandwagon.

It benefits you by giving you current income as well as retirement savings, and it benefits them by stabilizing their share prices.

Who Cares What the Shares Cost?

Of course, you don’t have to do any of this. You can simply invest in a dividend payer and just take your paychecks for life. That’s fine. Either way, you’ll certainly ease your stresses and strains while the economy is floundering.

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Get Gold Cheap… Before It Takes Off Again

Gold is giving you another chance to get in for the inevitable ride up at a bargain.

Here’s how to get it at a discount and multiply those gains.

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Income investing gives you options like these that “buy low, sell high” strategies don’t. Perhaps most importantly, income investors benefit from a completely different outlook on the market. They are not worried about share prices. They don’t even mind when prices drop. It just allows them buy more stock.

The most important focus for these investors is the dividend. As long as a company pays its dividend, especially if it continues to grow, the investor is usually happy.

Investing like this is much easier than trying to time the market and worrying about the economy. It actually solves both problems. It gives you a two-pronged attack on today’s hectic market.

Source: The Best Secret Savings Account

This from Investor’s Daily Edge:

During a CNN radio interview on Thursday, I was asked what it is going to take to get the market back on track.  This was the day when we saw initial jobless claims surge to the highest level since the attacks of September 11.

What I explained to listeners was that at some point the average person, the middle class if you will, is going to become numb to the dire economic reports.  Day after day we are bombarded with negative economic news…initial jobless claims hit seven-year high, retails sales set record drop, consumer confidence hits all-time low…

Back in 2002, the environment was much the same.  Each day, investors were hit with negative story after negative story.  At some point in the fall of 2002, investors became immune to the negative news and started buying goods as well as stocks.  It’s hard to pinpoint the exact time when this happened, but it did.  Then in the spring of 2003, the market took off and the bull-run lasted for almost five years.

At some point, we will reach a similar conclusion to this economic slowdown.  Investors will stop gauging their happiness and their stress level by the gyrations of Wall Street.  The negative news will keep coming, but there will be little reaction.

I have mentioned in other articles that one thing we have coming up that could help is the change in leadership.  A slight boost in consumer confidence would go a long way right now.

To some degree, we are already seeing a shift to indifference from the media.  Two months ago, a 400-point drop would have been front-page news on practically every newspaper in the country.  Last Wednesday’s 411-point drop hardly grabbed any attention from the mainstream media.  I know the local paper didn’t have a huge headline with this news, nor did USA Today.  Sure, the financial press was all over it, but they have no other choice for news.

People like to blame the media for numerous things.  The belief being that the slant the media takes influences the public’s reaction.  This is probably true to some degree, but this is a case where the media can help.  If the media becomes indifferent to bad economic reports, the average Joe isn’t going to make the effort to go check their stocks or their 401(k).

The big boys may be the ones that control most of the money, but the middle class is heavily invested in the market thanks to defined benefit plans.  Sure, they may just dump this money into mutual funds, but then the big boys are the ones that invest it on behave of the middle class.  Over recent months, investors have been pulling money out of equity-based funds at alarming rates.  In fact, since the week ended July 23, there has been one week that didn’t see net outflows.

The institutional money may garner the bulk of the attention and it is certainly the cause of the wild gyrations, but when individual investors are pulling money out week after week, the institutions don’t control nearly as much money.  Once individual investors decide it is safe to go back in the water, the market will make its next run higher.  The bottom will be reached when they stop pulling money out of equity funds.

My advice is to monitor the inflows and outflows of mutual funds.  Once you see a slowdown on the outflows, it will be safe to start buying stocks again.  I wouldn’t wait until the inflows start ramping up, because as we know, the herd is usually late to the party when it comes to bull markets.

Source: The Middle Class: The Backbone Of The Economy As Well As The Market

This from Today’s Financial News:

With $700 billion on the table, all sorts of companies are looking to get their hands on some cheap money. The way I figure it, every company that made the SEC’s recent no-short list has a shot at the bailout funds.

That means [a company like] General Electric (NYSE:GE) has a chance at a significant shot in the arm over the next few weeks as checks are written and put in the mail.

A lot of companies need the money. Some of them will use it just to keep in business. And others will take it and still manage to fail. But a handful of the best-managed companies will use the money as a springboard to larger profits down the road.

General Electric will be one of these companies.

Officials recently told us if bailout money was offered to GE, it would seriously consider taking it. Essentially, that is press-release code for, “Give us some money please.”

Fortunately, General Electric does not need the money to survive. It does, however, need the money to create lots of new jobs and get back to the double-digit growth rate investors are accustomed to. That is why the government will be willing to write the behemoth conglomerate a sizeable check.

General Electric is not the only company that will benefit. There are dozens of companies that are drooling over the handout opportunity that do not necessarily need extra capital to survive, but will take it in an effort to get the economy soaring once again.

Investors that take advantage of these artificial cash flows will profit handsomely. I already recommended buying shares of GE last week and readers that followed my advice are up by more than 15%.

There will be more companies like GE, so keep an eye on the markets and stay tuned to this site. I will let you know the moment I see another profit opportunity arise.

Source: The Fed hired who?

But, I am enveloped by the sudden warmth that has temporarily descended upon Boston… teasing us with implications of what’s too come.

Of course, it has been warm and dry, so I am crushed under the weight of pollen, which makes me ache, and sneeze, and itch and occasionally gasp for breath.

The garish-yellow forsythia are gloriously in bloom, but they draw my eye to vast sections of the yard that didn’t get raked last fall because the snow came too early. Those damned oak trees in the west that help keep the house so cool in the summer also dump millions of leaves all fall.

But, man is it nice to be semi outside. It’s even possible, on occasion, above the din created by the 10 or so lawn crews working in the neighborhood at this moment, to hear a woodpecker hunting food… a robin and finch chatting with their peers.

So, nothing is ever exactly right… well, in the big picture that is. Because, moments can be perfect as long as you’re ready to appreciate them.

The Perfect Investment Moment

That search for the perfect moment is of course a dangerous thing for investors. There is never a prefect moment to place your hope and money on a stock, bond, business or real estate investment.

Even if you’ve done your homework in regards to the risk you’ll take, you can easily find a negative voice – a gloomy outlook – at just about every turn. In fact, those are the voices that seem to be shouting the loudest.

This is especially true with stock investing.

In fact, the loudest voices during the past three or four years seem to be the ones within the financial media that are trying to convince you that buy and hold – the strategy in which you buy solid companies and pretty much forget about them – is a stupid way to invest today.

Now, I will agree that if your tolerance for risk is high and you play penny stocks or other risky speculations that you should constantly have your hand on the pulse of those trades. That’s the price you pay for accepting a high-risk potentially high-reward position.

But anyone who espouses that buy and hold is dead is peddling you bunk. And, it’s repackaged bunk at that. For these death-to-buy-and-holders were likely the very same characters who, during the past 20 years, have tried to sell you Internet, tech, gold and the change from pension funds to 401ks as radical new investment paradigms… that holds for China, too, my area of expertise.

Investment Attention Deficit Disorder

You see, it’s imperative for the investment crowd that flits from fad to fad to sell you on the critical notion that buy and hold is dead… how the hell else can they convince you to follow their flights of fancy.

I see a lot of this new paradigm crap surrounding China investing. I once, for about seven months, was even involved with a newsletter that peddled such bunk. It was not a happy partnership. The divorce cost me a small fortune in money left behind.

Of course, the reality today is that China has graduated from an investment trend to an investment reality. And, that’s not a new paradigm.

If anything, it’s an extremely old paradigm. And it will take the usual amount of work to separate the good from the bad and downright criminal, just like it does with the 10,000 or so US-based stocks that trade every day. Come on now, do you really believe that all those OTCBB and Pink Sheet companies are run by patriotic Americans whose sense of fiduciary duty extends to taking your money and making it grow?

If you do, have I got a Chinese granite mining stock for you, or a Chinese fertilizer outfit… or a (a thankfully formerly traded) public company that wanted you to finance its drive to sell chewable vitamins to Chinese children.

Shift This

You see, just as it is with European, German and Indian stock markets, the US stock market is home to every sort of scam, including those from China.

That’s the way it is with investments that are sold as major paradigm shifts. Instead of frank talk about China, the majority of what the financial press and publishers feed you is useless pie-in-the-sky stuff (and yes I approved my newsletter’s marketing in case you think I am peddling it ala mode) or useless news such as what the Shanghai Stock Exchange is doing.

The media peddlers are only in two moods… bubble up or bubble down.

That makes the deal with China exactly the same as the deal with Silicon Valley or Austin, Texas. It’s a simple proposition.

Do you easily understand what it is that a Chinese company does? Is it more than a story… or does it at least admit it is just a story, now? Are its financial reports up to date and audited with generally accepted accounting practices? Does its management seem stable and adept? Do you understand the risk?

Would you buy and hold this stock?

See, China may be an emerging market that allows you access to tons of new public companies, but it is not exotic.

But, churning and burning your portfolio is.

So, let’s put this silly, death-to-buy-and-hold mindset behind us now.

Anyone who’s peddling you that hokum merely wants access to your wallet… nothing more.

Now, let’s move on to more of your opinion pieces. The one from Jennifer suggests that my pool could be a cash cow. Actually, my glibness aside, she makes a heck of a point…as does Larry in the second piece. Wish we could get him the chance to buttonhole Condoleezza Rice.

See you next Saturday. Have a great weekend.

Lock and load.

Andy

P.S. To let me know what you thought of today’s article, send an e-mail to: feedback@investorsdailyedge.com.