I hear a lot of talk recently of people raising the level of cash that they have in their stock portfolio. People talk about having cash of 25% and plus. I personally generally have never more than 5% in cash. The only reason for my cash is to be able to take money from my RIF accounts yearly.
The most I will do with market uncertainty is to stop investing. If I build up some cash, I put it into an investment savings account waiting for when I find something I want to buy at a price I want to pay. This is because I believe in paying a reasonable price for stocks and try not to over pay for any of my stock purchases. There are times in market highs that I find nothing I want to buy at a price I am willing to pay.
What do I do about bear markets? I just sit them out. I am been investing since the 1970’s and I have been through many bear markets. The drop in the value of your portfolio can at times be jaw dropping. This is never easy to watch, but I know I have good stocks and that they will recover.
Also, I invest in dividend growth stocks. In bear markets, I find that some companies cut or suspend their dividends, some keep them flat and some will raise them. Overall, I find in bear markets that my dividends go up. They will not go up as much as in bull markets, but my total dividends do increase. Each bear market affects different industries differently and that is why dividends are handled differently by different companies. This is why you need a diversified portfolio.
On my other blog I wrote yesterday about Ag Growth International (TSX-AFN, OTC-AGGZF) ... learn more. Next, I will write about Kirkland Lake Gold (TSX-KL, NYSE-KL) ... learn more on Friday, May 14, 2021 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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