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Tuesday, October 7, 2008

Bank of America (BAC) cuts it's Dividend ... Import of the DOW Jones Transportation Index ...

"Life is about timing." - Carl Lewis


Despite being what I would call a 'favored bank', Bank of America (BAC) can't seem to catch a break lately. First, the decision is handed down that Bank of America must pay $8 Billion to settle suits over bad mortgages. Believe it or not, there is a bit of good news in this decision. This $8 Billion ($8,000,000,000.00) is being paid to keep people from losing their homes, and restructure their terms. Now, I could lecture on how people should not get involved in home purchases that they cannot afford. But I think I've preached that sermon quite enough lately.

At this point, the added bonus is that this means that the housing market will not become glutted with yet more inventory. At this point? That is a good thing. But that incurs cost. Therefore, Bank of America (BAC) then announced that they will be halving their dividend payment; from $0.64 a share, to $0.32 a share.

At the same time, the DOW Jones Transportation Index has fallen off of a cliff.

So what is my plan for my Bank of America (BAC) holdings? What is the significance of the dividend cut? What does this drop in the DOW Jones Transportation Index mean? I discuss that in the following video ...(Video Included)



Tomorrow, I think I'll discuss what some folks have stated is needed to restore financial security. The Gold Standard. Of course, being the contrarian that I am, I disagree ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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