The headlines, emails, and notifications we are receiving seemingly every few minutes during this corona-virus pandemic has many of us gripped with fear of the future. I hope to share some encouragement with you in the midst of this storm on the horizon and to ensure you that this storm will pass. The news outlets and media no longer have the near monopoly status they once had, because of this they like other online and social media outlets have to drive revenue via click bait tactics. Now I am not saying this pandemic is not to be take seriously, but what I am saying is it is being made out to be something bigger than it likely is, and that is driving lots of profits to these news and media agencies. In turn we are having to filter through all the noise and notifications which turns us, like the stock market, into irrational beings.
The stock market is irrationally consistent. What I mean is the stock market over the course of many decades produces an average return of somewhere between 7-9% profit. Some years its down, most years its up, at the end of the day your average is between 7-9% that is why I call it irrationally consistent. So when it is irrational in the red and going down, this is when we as long term investors are given an amazing opportunity to stockpile highly coveted assets (Blue Chip Companies) at a huge discount some 50-70% off (even now). Companies like Lowe’s, Johnson & Johnson, 3M, and many more that have weathered many recessions and corrections and consistently rewarded shareholders with dividends and capital gains.
So that is where we are today, we have an incredible opportunity in front of us, that we can use to our advantage to fill our portfolios at an accelerated pace with shares of these companies. By doing so, we can reap the rewards of this gift of the corona-virus pandemic with an accelerated compounding effect for many decades to come. Stay encouraged, and put your money to work today, so you won’t have to work tomorrow!!
I also just dropped a video that also touches on this topic head over to my channel and check it out:
So far 2020, at first glance, looks like it might be a repeat of 2019 where the S&P 500 index was up almost 30%. In the first half of January the S&P 500 Index is already up over 2%. While a market like this makes it seem really easy to make money, I have a feeling there will be a dramatic drop at some point this year and I don’t really have any thing factual to back that up, more of a gut feeling. That being said take this opinion with a grain of salt, however this gut feeling has me investing a little different as well, which is what I want to share with you all today.
If there is more volatility in the stock market this year, we may need to re-evaluate how and what we are investing in and that is certainly something I am doing. I recently made a video discussing a strategy that I am employing in my DGI (Dividend Growth Investing) portfolio, where I am evaluating and buying only the holdings that are nearing their ex-dividend dates and that are either on discount or are fairly valued. I still believe this is a great way to continue investing to accelerate the dividend compounding in my portfolio, and plan on continuing to do that in 2020. So check out that video if your interested in learning more about that, and that is a way I recommend you make money in the stock market this year. Another strategy I plan on employing is adding to my more defensive positions like United Technolgies (UTX), utility companies, and large cap blue chip DGI companies. The final strategy that is something that most good investors do on a regular basis is look for value opportunities in good companies that are going through some issues, but will eventually come out of and recover. Investing in this manner is certainly not flashy and won’t give you massive gains into your accounts, but I believe it will keep a good stream of dividend income and growth coming into the portfolio. With the combination of these methods, I believe no matter how 2020 turns out at year end I will have continued success investing and making money, and encourage you to consider doing the same (if it makes sense for your situation). Happy Investing everyone!