Writing this article the Dow Jones, the S&P 500 or the DAX are taking a deep dive and almost every stock is in red, it actually looks a bit like panic or is just the necessary correction, everyone was talking about since the beginning of the year? What should we as dividend investors do right now? I mean there are a couple of stocks out there with yields we could just dream about two or three months ago. So let’s discuss what you can do best in such a situation…

Current Market Situation

In the last three months the Dow Jones lost about 11.67 % and the S&P 500 more than 13%. This are quite heavy losses but on all honesty, we have seen worse ones in the history. Also looking at some of dividend stocks, it is just more than tempting to invest even more. Let’s have a look at the top yielding stocks at the moment.

• MO: 6.39%
• PM: 6.51%
• T: 7.14%
• IBM: 5.55%
• GIS:5.05%
• XOM: 4.76%

Just to name a few but this shows what amazing buying opportunities are currently out there. On the other side, you do not really know if we have already reached the bottom. Some analyst say, that this is just the beginning and it will get even worse and others are saying we already reached the bottom. So as you can see at the moment no one has a real idea in which direction it will finally go.

So how to behave in such a situation?

Personally, for me I keep saying to myself do not sell at all, the fundamentals have not changed at all and you are anyway focused on the dividend income and not on stock price gains. Secondly, I think do not change your investment behavior, so invest wisely. That means I would not invest all my cash reserves at the moment, spread it over more months e.g. if I want to buy 60 shares of company A, I would buy every 2 weeks 15 shares. With that kind of strategy, I do either averaging down my initial investment costs or I make some gains.

Also a very important is to keep in mind, is time in the market is way more successful than timing the market. Statistically after being invested only 1 year the probability of making gains is at 73%, after seven years it is already at 90%. But the even more interesting fact is that after 14 years the probability of not making any loss is almost 100%. The base for that test was the S&P 500.

This statistic just shows us that investing is about patience and as Warren Buffet said: “The stock market is a device for transferring money from the impatient to the patient.”

So what is my strategy now?

Well, I have been invested already a lot this month, but I am still thinking about throwing some more money into the market, especially the stocks mentioned above are now really attractive. So most likely I will do one further but rather small investment this month.

Conclusion

Honestly, I have never experienced a real crash so far and I don’t think that the current decline is even close to a crash. But I know how I will act in one and stick to my strategy, which is about investing constantly and building up a nice dividend income stream of 10 000 EUR throughout the next 10 years and as I said this needs patience and discipline.

Keep on investing guys!!