Thursday, January 17, 2008

Dividend Investing is a Good Thing in a Bad Market

It's a good time if you are a dividend investor. Stocks may be crumbling day after day, the headlines may be crying: Recession Looms. Big banks may be taking write offs like some sort of plague and selling pieces of themselves to countries the size of Delaware that just happen to have assets the size of Texas. As dividend investors, if we have done our homework, our companies' cash dividends are unchanged or growing. Our cash dividends are big enough to produced a reasonable rate of return, even without capital gains; and as the market goes down, our cash rates of return for new purchases is actually getting better. If you think about it, bad markets are actually good markets for dividend investors.