If you are a conservative investor and you are worried about volatility, you may be looking at the wrong information. You should only be in stocks that pay dividends and in little or no resource stock. You should not be looking at the value of your portfolio, but only the income it produces. Your income should, at all times be stable or increasing.
Most of the volatility of stock price has nothing to do with your dividend stock's company value and everything to do with the general feeling towards stocks. Most dividend paying stocks are relatively stable over time if you view them from dividend paying point of view. Most dividend paying stocks produce stable and growing dividends over time.
In every bear market there are stocks that cut or suspend their dividends. There are also ones that keep them stable and others that increase their dividends. If you have a diversified portfolio of dividend paying stocks bear markets should not affect the ability of your portfolio to produce dividends. In bear markets my portfolio has lower dividend increases and that is all.
If a stock cuts or suspense the dividend it is time to take a look at that stock to decide if it is one you want to continue to hold. If you are holding stocks for the very long term as I do, it is not surprising that there will be difficulties every once in a while. The question to ask is: Is the company behaving responsibly? Cutting or suspending a dividend maybe the responsible thing to do for the company for the long term future.
On my other blog I wrote yesterday about Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more. Tomorrow, I will write about Newfoundland Capital Corp. (TSX-NCC, OTC-none)... learn more on Friday, August 11, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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