Bernanke's Poker Face Leaves Markets Wanting


Hopes of additional quantitative easing have had investors on the edge of their seats for weeks now. Each next disappointing economic report hasn't quite been bad enough to spur action from the Fed, yet has still sent markets lower. Yesterday the S&P 500 (INDEX: ^GSPC) closed down 0.23%, the seventh time it's closed negative in the last eight trading sessions. It's the same story for the Dow Jones Industrial Average (INDEX: ^DJI) .

Though markets are currently up for the day, they fell quickly in early trading, so who knows where they'll end up. Bernanke's congressional testimony was decidedly downbeat, noting that recent economic data has been "generally disappointing." He repeated that Fed is "prepared to take further action as appropriate" but without stating a meaningful commitment either way. Bernanke also highlighted that economic growth will continue at a subdued pace as unemployment remains stubbornly high.

Considering that real gross domestic product increased on track for a 2% annual pace in the first quarter of 2012, but now appears to be climbing at an even more moderated pace for the second quarter, it's easy to see why investors seem sapped of enthusiasm.

How to play it
While everyone likes to watch market-moving factors like Bernanke's statements or the next jobs report, it's no way to invest for the long run. It's bad for your portfolio (and your health). Instead, investors should be looking at high-quality stocks for the long run.

One of the best indications of a quality company is a quality dividend, and there is no better place to find great dividends than the Dow Jones Industrial Average. All 30 components pay a dividend. The index on average yields 2.6%, and many of the companies have earned the enviable title of dividend aristocrat, meaning they've raised dividend payments for at least 25 years.

Some are better than others, though. Just take a look below at three of my favorite Dow dividends: Coca-Cola (NYS: KO) , Johnson & Johnson (NYS: JNJ) , and McDonald's (NYS: MCD) All three companies have dividends that top the Dow's average, are famed dividend aristocrats, and have handily bested the S&P's return over the last five years.

^INX Chart
^INX Chart

^INX data by YCharts

The power of a quality dividend married with a quality company cannot be overstated. It's one of the proven ways to achieve market-beating returns over the long run, and something every investor can enjoy.

You can break your portfolio free of all the market noise, Fed statements, and scary headlines with the three Dow stocks dividend investors need. These stocks stand out as models of blue chip outperformance over the long run, and will reward you for years to come. I invite you to uncover these top picks today -- just click here to read more.

The article Bernanke's Poker Face Leaves Markets Wanting originally appeared on

Austin Smith owns shares of Coca-Cola and McDonald's. The Motley Fool owns shares of Johnson & Johnson, Coca-Cola, and McDonald's. Motley Fool newsletter services have recommended buying shares of Coca-Cola, Johnson & Johnson, and McDonald's. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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