This SmartMoney article sounds a lot like my recent Money & Markets column, eh? But I certainly can’t fault the argument … look for more thoughts on this topic from me in the next issue of Income Superstars, which goes to press on Friday.

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In the wake of S&P’s downgrade, it’s interesting to note how brutally the stock market is getting slammed while Treasuries are actually doing just fine.

Imagine Treasuries getting slammed on a bunch of stock rating downgrades and you’ll see the strangeness a bit more clearly.

Most importantly, yields on the S&P 500 and 10-year Treasuries are just about in line now. So if you’re an income investor, and even ignoring all my past arguments about rising dividends boosting effective yields, which is the better bet — the investments that ACTUALLY got downgraded or the ones that are being sold off even though they were issued by institutions with much stronger financials? 

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Just a quick note to my subscribers and other readers: Despite the major market drop over the last week, I do not advocate selling into the weakness … especially if you’re holding quality income investments. Rather, I think it’s far better to start thinking about whether you want to put additional money to work right now (and on additional weakness going forward). Your answer will largely depend on your time horizon and tolerance for risk … along with how much cash you’ve kept aside … but if you’ve been following either of my model portfolios you should be well positioned to ride out the downdraft and capitalize on new opportunities going forward. I will have more thoughts in my regular Money and Markets column tomorrow, too!   

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I just got an e-mail from S&P with some very good dividend numbers for the second quarter of 2011.

All told, U.S.-listed companies boosted their payments (from common shares) by $11.2 billion, which comes on the heels of $19 billio in new dividend money during the first quarter.

That means payments in the first half of the year rose 11.1% from the same period in 2010. And on top of that, they’ve already eclipsed the dollar value of ALL the dividend hikes that happened last year.

This is precisely what I’ve been predicting. And precisely why I’ve been urging investors to continue loading up on solid dividend stocks.

To learn what ones I’m recommending now, and how you can get your piece of this huge income windfall, I urge you to watch my brand-new video presentation by clicking here now. 

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Officially, the Federal Reserve says it’s ending its second round of quantitative easing (QE2) this week. That’s the experimental money-printing approach whereby the Fed buys government bonds.

Now, the Fed has been perfectly fine to let us all believe that they will not be engaging in a third round of it anytime soon.

But here’s the thing: The Fed WILL continue revinvesting its maturing Treasury bond holdings into more Treasuries!

According to a Bloomberg story that just hit the tape this morning, this reinvestment alone could amount to another $300 billion in bond purchases over the next year. When you consider that QE2 was worth $600 billion, I I think it’s perfectly reasonable to label this new approach “QE3.”

So the bottom line is that … regardless of the acronyms and technicalities … regardless of what Bernanke says during his press conferences … … it’s full steam ahead with the Federal Reserve’s money printing efforts.

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It’s …

Wait for it … Wait for it …

To form a governmental oversight committee on the matter!

http://finance.yahoo.com/news/Obama-to-announce-plans-to-apf-2226973376.html?x=0&sec=topStories&pos=8&asset=&ccode=

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According to S&P, the benchmark “500″ companies paid out a whopping 7.9% more in dividends in the first quarter of 2011 than they did during the same period last year!

Meanwhile, the sheer number of dividend increases from U.S.-listed common stocks tripled from the first quarter of 2010.

If you’re an income investor, this is tremendously good news … especially if you’ve been holding solid dividend payers for a while now.

Reason: It means your total yield on your initial investment keeps going up even though other interest rates have remained pathetically low.

And the best part is that I continue to expect MORE dividend increases going forward!

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Amid all the bad news out there, I just wanted to point out that yet another tech company — Cisco — will now be paying dividends.

And on top of that, we also got word that some U.S. banks have also gained approval to start making shareholder payments again too. As I’ve said in previous Money and Markets columns, I don’t necessarily think this makes the financials a buy for income investors yet … but it is still a positive sign overall.  

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Okay, put this one in the “circular logic circular file.” According to Atlanta Fed President Dennis Lockhart, if oil prices continue surging, the Fed should consider a QE3 response.

Huh?

Lockhart’s logic goes like this: If oil prices rise, that will hurt the economy. And if the economy gets hurt, we’ll need to pump in more money to get it going in the right direction again.

Never mind that easy money is what’s behind rising oil prices. Or the rising food prices that have been exacerbating the unrest in the Middle East (which has been in turn exacerbating oil price gains).

No, clearly the answer is MORE money printing!

For the full story, just click here. And at least be thankful that Lockhart is not currently a voting member of the Fed (though his thinking probably echoes the general sentiment of other members anyway).

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