Market Wrap-Up for Nov. 11 – Don’t Overcomplicate Your Investing

Investors tend to overcomplicate their investing decisions. With so many different types of assets and investment vehicles at our fingertips, the act of investing can become a bit theoretical as we glance over the true core of the process. The essential aspect you need to remember is that by buying stock in a company, you are actually becoming part-owner of that company. I know this is a pretty fundamental insight, but often stock investing can be quite abstract rather than a concrete business because we are so far away from the corporation we are buying into.

Nonetheless, dividend investors need to treat their investments in stocks like they are indeed buying up a share in any business, whether it is Apple (AAPL) or your local florist. Just because you are buying electronic shares of a multinational corporation does not mean you should skip the necessary steps you would without a doubt follow if you were buying into a local business like the aforementioned florist. You need to complete your due diligence prior to investing, ensuring that your potential investment is profitable, with sustainable revenue growth over the long-term.

Keeping it Simple

It’s not about investing in the hottest company in the media or following a co-worker’s stock tips to make a quick buck. Instead, we’re making long-term investing decisions that will pay off for years to come. You don’t want to put new money into a business that is facing tremendous headwinds, in a risky industry or in a saturated market. Otherwise, the company will not end up seeing adequate profits to ensure they pay out a check to its owners each quarter in the form of dividend payments. After all, this sort of paycheck is the reason we are investing in the first place.

Furthermore, when taking stock investing back to its basic foundation, and remembering that you are putting money into an actual business, it’ll become a little bit more clear how futile it is to obsess over short-term stock price fluctuations in the market. Though this is the sort of activity that many in the media and in the finance world constantly cover, it just ends up clouding investing judgement. An owner of a local business in your town does not sell his or her stake in a business just because the value of the company might change on a day-to-day basis; in fact, the business over rarely even worries about this sort of valuation. As such, you should take the same approach when making your dividend stock investing decisions. By doing so, you’ll ensure your share of constant and long-term profits in the form of dividend payouts.

Think Like An Owner

Having read all of this, you may be thinking that I am stating the obvious. However, in today’s day and age where trading and an obsession over stock market volatility continues to be an in-vogue concept, the true meaning of stock investing has been lost in the minds of many individual investors and big-time players on Wall Street. At its roots, stock market investing is a remarkable tool that allows almost everyone to take advantage of the upsides of corporations and their profits. Remembering this, and keeping in mind that in all comes down to a lot of business basics, you can make money for years to come.

A Look at Today’s Markets

The major indices had a quiet day today, with almost no economic or earnings catalysts to push stocks in either direction (not surprising, considering the Veteran’s Day holiday). Shares of Wal-Mart (WMT), Goldman Sachs (GS) and IBM (IBM