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Strategies & Market Trends : Value Investing
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To: Grommit who wrote (54671)1/1/2015 4:42:29 PM
From: Jurgis Bekepuris  Read Replies (1) of 78618
 
I can live off my dividends, so cap gain is irrelevant
I'm not trying to put you on the spot, but I think this kind of thinking is going to be part of the next crash. A lot of people have poured into divvie stocks because "they only care about divvies and the cap gains are irrelevant". This is all good and nice until the stocks drop and they cut divvies and suddenly you have much less capital to reemploy elsewhere.

You are probably going to handle this. But I am pretty sure that a lot of people won't. And once you get into fear, it could lead to panic.

BTW, it's not you I am railing against. A rather naive friend of mine recently sent me a link to investment "strategy" of buying 10 4%-yielding stocks with expectation that divvies will only grow and any stock declines are temporary and "irrelevant". Where did I hear this argument before? Ah, the real estate not so long ago....
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