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Strategies & Market Trends : Dividend investing for retirement
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To: Jacob Snyder who wrote (9852)8/14/2011 6:35:32 PM
From: Max Fletcher  Read Replies (1) of 34328
 
Jacob, thank you for starting an interesting discussion. Your comment "The reason for my last rule (sell half when stock doubles or hits multi year highs), is because I think we will eventually (within the next 10 years), hit a PE10 of 5-10 for the stock market." That comment reminded me of one of the better articles I've read recently which agrees that we are in the middle of a long-term bear-market. And that should be regarded as an advantage if your goal is to build an income stream - a view counter-intuitive to normal investor psychology. A snippet and a link to the article "Making money in stocks without a stock market" is below.

Thanks again for your post.
Max

We’ve repeatedly articulated our belief that dividend yields for the stock market have to rise over the next ten years before stock prices reach a long-term bear market bottom...Having faith in the companies in our portfolios to increase their dividends steadily over time and faith in compounding through dividend reinvestment all the way to the bottom of the current bear market cycle should allow us to add to stocks at progressively cheaper prices, build income, and lock in dividend yields as high a 10% by the end of the decade...So, rather than spend our day monitoring stock price movements in hopes of catching the right price to buy and then sell a stock to capture the ever elusive capital gain, we sit back, buy companies that are raising their dividend at double digit annual rates, and then look to buy more shares when their price makes their dividend yield most attractive.

1st quarter viewpoint:
deschaineandcompany.com


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