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Strategies & Market Trends : Dividend investing for retirement
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To: Steve Felix who wrote (34118)9/8/2022 6:14:15 PM
From: Thehammer1 Recommendation

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E_K_S

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I would like to interject a cautionary word. In some cases both parties can be right even though they have opposing viewpoints. A major objective of DGI is stable and growing income. You will most likely achieve that with a well-diversified portfolio, but if we have a major correction, there will be opportunities to buy at lower prices. I sold off a good portion of my low yielding high growth companies such as SCH, ECL ACN etc. They had very high PE ratios. In a correction these are likely to be hit a lot harder than some of the more stable companies. Having been through several major corrections, this seems to rhyme with the 70's as well as 07-09.

DGI usually do much better in a correction but still decline. China, Europe as well as the USA all seem to have issues. Lots of small businesses are no longer in business particularly in states that had prolonged shutdowns. Small business always has been an engine of growth for us. Inflation / stagflation is also a concern as well as rising interest rates.

A tenet of DGI is remain invested although I take issue with the fully part. Bear markets seldom end without capitulation, and we have not seen the level of pain associated with past declines and we also have a new set of investors who have never experienced it.

I am not advocating total liquidation, but I'd be extremely careful on committing new funds and to which companies. Selling fairly deep OTM puts on selective stocks may be a decent strategy.
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