The Weekly Lineup: Stay on the Path Edition

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”
Warren Buffett.

Rising stock marketMarkets continue their march onwards and upwards, and show no signs of taking a break. Everyone knows the Warren Buffett adage “Be greedy when others are fearful.” However, it was the first part of his quote that people often miss or gloss over in a rising market – “Be fearful when others are greedy…” It seems investors, and the general public, have once again become complacent to rising stock prices.

For investors who have been through the Financial Crisis, the current market highs are once again ringing warning bells. While we may be coming up to a market correction, it may not be a crash. This is a point Ben Carlson drove home in his earlier post, Are Stock Market’s in a Bubble?

If you sell now, will you be able to time your entry point back in? Many people believe they can, but in fact timing the market is impossible. Many an investor has sold a position, only to try to buy back in and missed the bottom. Or they have sold, and continued to watch the stock price march upwards.

I’ve met people who had the acumen (and luck) to sell their stock holdings in 2008, before the infamous crash. They had a strong conviction towards selling to maintain their capital, and felt confident enough to make that decision. They saw greed and optimism all around, and had a hunch something big was coming. They sold at an opportune time and they were lucky.

Many investors have again been asking those pivotal questions. Should I sell all my stocks? What should I do? Index investors have it easy because they simply re-balance their holdings on an annual or semi-annual basis. This takes the guess-work out of when to sell. For long-term dividend investors, such as Dividend Growth Investor, selling isn’t even a consideration. For these dividend investors selling would be akin to chopping away at a cherry tree, that bears fruit (an analogy from my friend Dividend Mantra).

I’ve been asking the same questions myself over the last few weeks? What would I do differently if I knew my portfolio would drop 50% tomorrow? How would I change my portfolio if I knew? The answer is I probably wouldn’t do anything differently, and there is no need to. In fact, by selling, I would negate all my future dividend income, and potential for future gains.  Would losing my monthly income stream be worth it?

The Weekly Lineup

Here are some great reads from around the web this week:

At Critical Financial, I looked at the billions of dollars sitting in dormant bank accounts and unclaimed property. I asked the question, Are You Leaving Money Behind?

Is your blue-chip dividend stock under-performing? Is it lagging the index? Thought of selling? In his post at the Globe & Mail, John Heinzl reminds investors why sticking with the dividend investing strategy through thick and thin pays off. In Why You Shouldn’t sell Your Coke Shares, John reminds us about Coca-Cola’s 52 year dividend growth history. Be sure to see the chart at the bottom of the post!

Here is another successful investor embracing the dividend growth strategy. Along the same line of thought, Dividend Mantra shares his Dividend Income Update for March. Mantra is doing a great job, now breaking the $700 per month in dividend income!

Have you heard of the Canadian Dividend All Star List? Neither had I until recently. This list is composed of Canadian companies that have increased their dividend for 5 or more calendar years in a row. Fortunately a diligent Canadian blogger has done the research and provides the list here, which he updates regularly. Fortis Inc. is at the top of the list with 40 years of dividend increases.

On the Outlier Mode, staff writer Taylor looked into 7 Gap Year Sites for Adults. If you’re not familiar with the term, college students have been doing this for years. But now adults are taking part to escape the 9-5 grind. They are traveling, volunteering, working abroad, or learning a new skill while getting a much-needed break.

Have a nice weekend everyone! :)

13 Responses to “The Weekly Lineup: Stay on the Path Edition”

  1. Dividend Mantra

    Apr 05. 2014

    Avrom,

    Couldn’t agree more. Will the market fall by 50% in the near future? Who knows. But guess what I do know for sure: I’ll continue collecting rising income which I can continue allocating towards more income-producing stocks. The never-ending cycle of more cash.

    Thanks for the mention.

    Have a great weekend!

    Best wishes.

    • Dividend Ninja

      Apr 05. 2014

      And a great job you are doing! Thanx for dropping by mantra. :)

      Cheers

  2. DGI&R

    Apr 05. 2014

    Avrom,

    Thanks for mentioning the Canadian Dividend All-Star List. I appreciate the shout out.

    I think when markets are up it can be a good time to sell off companies that have have stopped increasing their dividend. I like to invest in companies that increase their dividend each year, so I’ll consider selling if one of my investments has stopped regularly increasing the dividend.

    Cheers,

    DGI&R

    • Dividend Ninja

      Apr 07. 2014

      DGI&R,

      Keep up the good work! You are providing a valuable resource for Canadian investors, and those interested in Canadian companies.

      I’m not sure I would sell a company or not invest, just because it doesn’t raise the dividend. Husky Energy (HSE) comes to mind… It’s not a dividend growth company, but it is a well run company with solid growth and low debt. It has given me a very solid ROI.

      All the best,
      Cheers

  3. HarveyM

    Apr 06. 2014

    My port. is a diversified asset mix with fixed income/equity. The equity portion is totally dividend etfs in my RRSP and dividend stocks in my unregistered account. I only sell equities as the free lunch of rebalancing which I do twice a year. Otherwise, I don’t sell. My asset mix is there to manage risk and allow me to sleep at night. I think it’s best to just turn off BBN and go for hikes instead :). But I do read a few good blogs: this being one!

    • Dividend Ninja

      Apr 07. 2014

      Harvey, thank you very much! :)

      If more people would just switch of BNN and stick with their plan, they would be a lot better off. Completely agree – tune out the noise.

      Cheers
      DN

  4. Max Dent

    Apr 07. 2014

    A quote of Warren Buffett is a great way to start an excellent post!
    Thanks for sharing your insight and your news picks, I really enjoy reading your blog. Keep posting!

  5. Francis

    Apr 09. 2014

    If one is bearish about the market when it is making all time highs, don’t sell, but slow down the pace of buying you do perhaps ? Some dry powder may come in handy later down the road. My two cents.

    • Dividend Ninja

      Apr 16. 2014

      Francis, yes holding some cash is a great idea!

      Those that stayed the course during the Financial Crisis, and held with an iron stomach, were well rewarded in the market rally. I really think topping up on the dips is the way to do, even though its tough to do.

      Cheers
      DN

  6. Stefan

    Apr 15. 2014

    Hello,

    Forgive my ignorance, but why the emphasis on Canadian stocks? Is it a tax issue?

    Cheers,
    SP

    • Dividend Ninja

      Apr 16. 2014

      Dividend Ninja is a Canadian blog. So yes the focus on Canadian stocks. ;)

  7. wes@GenWiseWealth

    Apr 21. 2014

    Nice article! With a long term focus, continued buying of quality stocks with growing earnings and dividends always wins the price! Buy at regular intervals to dollar cost average no matter where Mr. Market takes these stocks! Ninja, what does your portfolio look like now? How many positions? What is your average hold period? Average dividend yield?

    Thanks,
    Wes

    • Dividend Ninja

      Apr 24. 2014

      Hi Wes, thanx very much! You also have a great website going as well. :)

      I don’t actually post my portfolio publicly, but I am at 20 positions now. I would obviously like it to be 30 to 40.

      Everything I own now is hold forever. I’ll update my yield and let you know. Sounds like I have a post here!

      Cheers