U.S. stock prices have been marching steadily higher since the end of October. The S&P 500 is up over 20% with hardly a glitch in the upward trajectory. While it’s great to watch the gains in your portfolio, now is the time to prepare for the next market correction.

Here’s why – and how.

Here is the SPDR S&P 500 ETF (SPY) chart since October 1, 2023.

(Click on image to enlarge)

A stock market correction is defined as a drop of 10% or more in the major market indexes. If the drop exceeds 20%, it would be classified as a bear market. A 10% drop does not sound like much, but watching it happen to your stock portfolio can be pretty painful. Also, while the S&P 500 may drop by 10% to 15%, individual stocks can and will fall much harder.

A market correction almost always catches investors by surprise. Fear can quickly take over emotions, and investors often sell to prevent further losses rather than take advantage of stock prices that have suddenly gone “on sale.”

With my Dividend Hunter service, I advise subscribers to focus on building an income stream using the high-yield investments in the recommended portfolio.

If you invest to accumulate dividend-paying shares, it becomes easier to buy when share prices fall—you can acquire dividend-paying shares “on sale.” When the stock market enters correction territory, my subscribers, instead of giving into fear and wanting to sell, ask me if it is good to buy more of our high-yield shares. Once you buy into the system, adding dividend-paying shares in a market downturn becomes exciting.

When the market drops, my subscribers and I will seek the best opportunities to boost our investment income. For example, Starwood Property Trust Inc. (STWD) shares are great to acquire when the yield exceeds 10.5%.

History tells us that a stock market correction at some point this year is almost inevitable. Do you have a plan to use the drop to build your future income and wealth?

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