Dividend Stocks and The Dropping Dow
So what is your portfolio doing when the headline news tells you the Dow is dropping? As many of you know I like dividend stocks. Mainly dividend stocks that consistently increase their dividend payments to their shareholders every year. Not just a couple years or every few years. I'm talking 10 years minimum... consistently. Yes that does weed out many good companies that just aren't there yet. Sorry... not running a popularity contest or who has the prettiest portfolio contest.
I'm looking for double digit returns every year, so if I have to buy some water or gas company that has been increasing dividends every year for over 50 years... regardless of what the Dow is doing... so be it.
Ok... so the Dow is dropping and your so called paper profits are out the window and your portfolio is not as happy as it was a few months ago. I may as well remind you what I tell all my students... You never loose money til you sell for less than what you paid. This is the main reason I do not like stop losses, you think you are doing a smart thing but when there is some fluctuation (as there always is) you just might be called out. Being stopped out with a profit is not a bad thing, but I never use a stop loss order for less money than what I bought at.
One more important note on good quality dividend stocks... the ones I buy have less mood swings than the flavor of the day stocks.