The bull market is dead after an almost ten year run off the 2009 lows. The US stock market is now in a bear market – characterized by a 20% correction from the all time highs reached in September.
I do not know if stock prices will go lower from here, or reach new record highs by 2019. If history is any guide, we may have turbulence in stock prices. However, it is very likely that a diversified collection of good businesses will be earning more a decade from now. As a result, these businesses will be able to pay more in dividends to their shareholders. It is also very likely that those businesses will be worth more a decade from now, given that higher earning power they are generating.
Keeping a longer term perspective is helpful in turbulent times. We should be thinking like business owners, and care about the revenues, earnings and dividends that businesses generate, and less about stock price fluctuations. Perhaps the only advantage of watching stock market prices is the ability to buy shares in great companies when Mr Market offers them at lower prices. Taking advantage of other people’s fears is a behavior trait that has always been a profitable long-term investment strategy, for as long as stock markets have existed. That, and having a patient long term focus to let the power of compounding do the heavy lifting for you. You may not make money every year, but if you select companies with defensive business models and safe dividends at attractive valuations, you will likely generate a dependable stream of dividend income to pay for your retirement. As you are well aware, divdends are more stable and dependable than share prices. This is why we focus on the growth in annual dividends for retirement income. This is why I view stock market declines as an opportunity to acquire future income on sale. In this case, your future income is available at a 20% discount from recent highs.
This is where I will make my plug for my dividend growth investor newsletter. I will be sending out a new issue to subscribers on Sunday, December 30th. This issue will list ten dividend growth stocks that I will be buying for my dividend growth portfolio. A few days after the newsletter is out, I will send out an updated list of dividend portfolio holdings for the newsletter. This is a real money portfolio, where I place my money where my mouth is. I buy ten companies every month, and reinvest dividends strategically into the best values I can find at the moment. I try to view this as a tool to educate fellow dividend investors.
I follow a few simple principles where I select companies selling at attractive valuations, which have a track record of annual dividend increases and have safe dividends.
I also believe in principles such as diversification, regular investment, keeping costs low and having a patient long-term focus. This is a newsletter where I buy and hold companies for the long run, not to flip them for a quick profit. My ultimate goal is to generate $1,000 in monthly dividend income, through regular investing of about $1,000/month and strategic dividend reinvestment. It is very likely that this goal will be accomplished in 10 – 15 years from now. As a result of having this long-term goal, I am very careful in selecting companies that have some staying power and will be able to pay more a decade from now.
I offer a seven day free trial for readers who are interested in learning how I am building this portfolio from scratch in real time.
If you subscribe using the annual plan, your cost will be only $65/year. The monthly plan costs $6/month. With the annual plan, you are essentially getting one month free.
You can subscribe using this Paypal form:
Once you subscribe, I will add you to my exclusive email list, and you will be able to receive premium information about the dividend growth investor portfolio.
The price will increase over time, so you have a limited chance to grab this subscription today. If you subscribe today however, your price will never increase. I guarantee it.
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