The Dividend Investor v34. ”Do not be afraid of the stock market downturn”

The stock market has fallen some lately and the fear of a fall in equity prices seems to be spreading. It will be spoken and written about the stock market downturn, the headlines reads that one should avoid the shares, the decline is near.

I fear, however, no decline! Such a belongs to on the stock market and after a decline it goes up even more. try to time it where by selling and then buying again, ”cheaper” is a dangerous game, a game doomed to fail! Among other things, nätmäklaren avanza’s statistics show the disappointing outcome; we sell cheap and buy expensive. Or to put it another way so we sell when it’s already backed down a bit and buy when it’s already gone up a lot. The result is a poorer return than if we kept our shares. Certainly, you can be lucky and manage to buy back cheaper but in the end it is pure casino, and you know who is the winner in the casino (no it is not you).

The casino always wins! Invest in good companies and was the long-term. Good companies continue to be good no matter how the mood on the stock exchange or if the stock goes down in the short term. A share price in the short term does not necessarily reflect its company’s performance and potential in the long term. The stock market is a real humörstingest and when it is in a bad mood then everything is bad, all companies are required to hold. Sometimes the exchange on the immensely good mood and then, all the companies up, even the worst companies.

In the long run, however, mirrors the share price of the company’s performance. Most large companies continues to be good and rises in the course in the long term. Therefore, an investment in an index fund to be among the smartest thing you can do. Stock indexes are moving steadily up in the long term, and by an index fund to remove the risk to go into a mine. A mine which is to own just that the company that ends up being good, or the problem shows up in a tag (such as Ratos and Ericsson).

If you are only long-term and have invested in the index or companies that you genuinely think is good, so is not a fall in equity prices a threat. You can calmly sit back and think on other things. Best of all is, of course, if you regularly buy more shares or mutual funds. If every month buy for a buck to get bought more in the wet as the dry. In the long run to get a decent cut on their purchases, and remember; In the long term, the stock market up!

What is the long term? More than 5 years, a shorter investment horizon than then you should not even be on the stock exchange then the risk is that you lose a large part of the capital at the bad time. Stock exchange can back 20-30% in a single year, but it is astonishing, and if it happens close to the moment you need the money you can fall back and with a vengeance if the misfortune comes. In the longer term than 5 years, it has time, time that will give you returns, and smooths out a possible fall.

While the stock prices and the stock market can fluctuate a whole lot with the time usually profits and the dividend to be the more stable in many companies. Navigating well among the listed companies you can invest in, such as steadily pay dividends regardless of the stock exchange surar during a period of time. In difficult times such as the 2008 financial crisis, many companies forced to cut or suspend its dividend altogether. But there were those that maintained or even raised its dividend through this acid test on the stock exchange. Many good companies forced to cut its dividend and it was not simply that in advance, sort out and invest in the ones that actually raised or kept the dividend unchanged.

This can history be a guide, nevertheless, never a guarantee. If we take the Castellum and Hufvudstaden as an example, they have both raised their dividends every single year for about 20 years. Through the IT-crisis, crisis and more. Looking more closely at these you will find probably that there are two good companies with good potential ahead. In combination with the history of utdelningshöjningar in two decades, you can give them a good chance to further increases even in the case of new crises.

Looking except the borders of the country specifically in the united states there is something called the S&P500 Dividend Aristocrats, and there are companies in the S&P500 index, which raised its dividend in at least 25 years. There are several that raised considerably longer time than that, but 25 years in itself is impressive. There are around 50 pieces of companies that qualifies as such here utdelningshöjare and among them one can likely find several companies you will find really good, with good potential in the long term.

In conclusion, it is quite possible to put together a portfolio of companies with an impressive history and a good opportunity to continue to raise its dividend even in the new crises.

Do not be afraid of a stock market fall, it is not dangerous, it is how the stock market works. Are you just long-term in good companies so continues the dividends ticking in and at term, although the stock price up.

Last week I wrote about a bunch of steady utdelningshöjare. Read the article by clicking on the link below.
The Dividend Investor v.33 ”3 steady dispenser”

Like this post? Please share to your friends:
Leave a Reply