Just a little writing about the my thoughts of today.
Today is the third day that we see red numbers on all the major indices. This is great news!
This may sound strange, but the latest, very sharp price falls are actually very favorable for the dividend growth investors. Why you may ask. First of all; DGI’s are in it for the long run. They try to achieve the highest possible total return in the long term. And reinvesting the dividend pays an important role. Just look on the Internet for studies about total return and dividend. You can see that a significant percentage of the total return is due to reinvesting the dividend. So dividend really matters!
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”
Now we see a decline in the stock prices, just before the European dividend season erupts. And I’m happy about it. Because it gives me the opportunity to reinvest my dividends at considerably lower prices. The lower the share prices, the more new shares can be bought at each reinvestment round and the more powerful the interest-on-interest effect ultimately.
Okay that’s the theory. But at this moment I got a little problem. And that is that I don’t have enough cash laying around to buy on this dip. And I really want to! I see some great opportunities that I didn’t see for awhile. It is hard to see the markets decline and all I can do for now is just site at the sideline and watch ;-(
Bad times make for good buys
I definitely have to look for some cash or reallocate some of my emergency fund cash. Mmm, this is hard. I don’t want to touch my emergency fund. I just have to look harder or reallocate some other cash.
What do you think of the current market dip? Will it continue, or is it just a little blip?
I like to hear from you