Falling Market

If the market is really falling and you are a bit scared, reading these comments might help:

  • If prices are falling then yields are rising and your next purchase will provide more retirement income.
  • “a dividend-focused portfolio delivers a high share of its total return as a cash payment, which is not subject to timing or value determination” Daniel Peris in The Strategic Dividend Investor
  • “The beauty of dividends is that you get paid whether or not the market is up.” Report on Business August 10 2011, John Heinzl quoting Howard Silverblatt a senior S&P analyst
  • “We look at markets declining as an opportunity to buy good assets cheaply.” Prem Watsa
  • Dividend growth investing does not depend upon market prices to finance retirement. Dividends can go up as prices fall…and they will. It happened in the 1970s. The April 1988 Connolly Report listed a score of examples. Here's one: from 1978 to 1988, TransCanada's dividend growth was 12.6% annually.
  • ”[I]f you are a saver and a buyer of shares - as most investors are and will continue to be for many years - your long-term interest is, curiously, to have stock prices go down quite a lot and stay there so you can accumulate more shares at lower prices and therefore receive more dividends with the savings you invest.” page 137 of Winning The Loser's Game by Charles D. Ellis (Connolly Report front page April 2003)
  • “The simple fact is that long-term distributable cash flows from large, publicly owned companies don't vary much day to day.” Daniel Peris
  • During the week ending August 13 2011, with the market going up and down by hundreds of points a day, thirteen companies quietly increased their dividends. This fact did not make the front pages. The dividend increasers included Toromont, Boston Pizza, Kinross Gold, Algonquin Power and Davis + Henderson.
  • Savers “should therefore rejoice when prices decline”, Warren Buffett said in his 1997 shareowner report, as it allows us to “deploy funds more advantageously”.
  • Jeremy Grantham (GMO, Jan 2011 'On the Importance of Asset Class Bubbles for Value Investors') believes “the only things that really matter in investing are the bubbles and the busts”. Save “your big bets for the outlying extremes is, in my opinion, easily the best way for a large pool of money to add value and reduce risk.”
  • “periods of great crisis are really just opportunities in disguise”
  • “If you are going to be a net buyer of stocks in the future…you benefit when stocks swoon.” Warren Buffett
  • more to come
falling_market.txt · Last modified: 2012/06/12 16:55 by tom
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