Fast Money: Behind the Money
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BEHIND THE MONEY: December is Dividend Investing Month
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Executive Producer, Fast Money & Strategy Session
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As the rest of market stagnates today, dividend-paying stocks are continuing their upward trend this month. The iShares Dow Jones Select Dividend ETF [DVY
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] is up more than 3 percent in December as the S&P 500 clutches to a gain just above the 1 percent mark. We first flagged you to this investment opportunity on Nov. 10 , when Fast Money's Pete Najarian observed that the number of companies raising their dividends seemed to be starting to increase.
Goldman Sachs called dividend investing one of their "Best Ideas" on Nov. 19. The firm, known for trading fast and not like widows and orphans, suggested buying stocks such as Abbott Labs [ABT
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] and Coca-Cola [KO
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]. Barrons confirmed the trend this weekend with their cover story "Even Better Than Bonds".
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This iShares ETF tracks the highest dividend-yielding securities in the stock market, but the Fast Money traders believe there may be a basket of individual stocks that could serve you just as well, including Verizon [VZ
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], Johnson & Johnson [JNJ
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] and Novartis [NVS
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]. (We'll reveal more on the show tonight). The fundamental reason behind this dividend rally is a yearning for yield after financials (typically among the stocks with the highest payouts) were forced to cut their dividends this year and as treasury yields fell to new lows, according to Najarian, co-founder of Optionmonster.com.
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It's also because investors are staring at a rally that seems to be tiring out and capital gains may no longer do the trick next year. Take a look at this chart from Oppenheimer's Chief Market Technician Carter Worth. It shows that the S&P 500 has recovered to a level where there will be a lot of "supply", in technical-analysis-speak, or rather individual, institutional sellers taking profits to break even from the 2008 plunge. Not to mention companies like Bank of America issuing more shares to raise capital.
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"There is a very good chance 2010 plays out just like 2004," wrote Worth, a frequent Fast Money guest. "After the steep recovery year that was 2003, the market stopped going up and spent ten months resting, consolidating its gains."
If the market is "resting", then investors surely will need that dividend income to generate any return next year.
John Melloy is the Senior Editorial Producer for Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.______________________________________________________
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Trader disclosure: On December 7th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (BTU), (NUE); Seymour Owns (CHL), (AAPL), (BAC), (GE), (MSFT); Najarian Owns (AAPL) Calls; Najarian Owns (BAC) Calls; Najarian Owns (DD), Owns (DD) Calls Spread; Najarian Owns (GE) Calls; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (TXN), Is Short (TXN) Calls
GE Is The Parent Company Of CNBC
NBC Universal Is The Parent Company Of CNBC
For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
For Brian Kelly
Kelly Owns (FXY) Puts
Kanundrum Capital Owns (TBT)
Kanundrum Capital Is Short (FXY)
Kanundrum Capital Is Short (FXF)
Kanundrum Capital Is Short (FXB)
For Jim Suva
Citigroup Global Markets Employees Own (RIMM)
A Citigroup Global Markets Employee Owns (GLW)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (RIMM), (PALM)
Citigroup Global Markets Has Received Investment Banking Compensation From (MOT) In Past 12 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking
Compensation From (MOT), (GLW), (PALM) In Past 12 Months
(MOT) Is Or In Past 12 Months Was An Investment Banking Client Of Citigroup Global Markets
(MOT), (GLW), (PALM) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Securities-Related)
(MOT), (GLW) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities Related)
Citigroup Global Markets Or Affiliate Received Compensation From (MOT) In Past 12 Months
Citigroup Global Markets Is A Market Maker In (RIMM), (PALM)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (GLW), (MOT)
For Craig Berger
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ONNN)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (INTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (NVDA)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MRVL)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LLTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MXIM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATML)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LSI)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (SLAB)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MSCC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (QCOM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATHR)
Data is a real-time snapshot *Data is delayed at least 15 minutes
