Graham Reeds @MaxDividend: "If one thing is certain..."

United Kingdom

If one thing is certain in investing it is there will be another stock market crash at some point. It may not be this year or the next (or even the year after that), but it will happen again eventually. The lesson to learn is not to fear the inevitable. Here's a short primer on what to do: 1) Don't Panic Sell If the market crashes and your portfolio is now worth 10% or 20% less than it was a few days earlier, then the worst thing you can do is sell up and hide under your duvet. This crystallizes your losses into reality whereas previously it was only theoretical. 2) Focus On What You Have Instead of thinking "my portfolio is now worth $X", think in terms of "my portfolio generates $Y in income". In a market correction some companies will pause or reduce their dividend payments. This is just prudence. Don't be offended and don't be worried. 3) Buy When Others Sell You can profit from a correction if you can divert some of the received dividends towards buying great companies at fantastic prices. As Warren Buffett said: "Be fearful when others are greedy and be greedy when others are fearful". 4) Find The Right Securities You want to find the right stocks that will weather a prolonged correction without issuing a cut? Look towards the Dividend Kings and Dividend Aristocrats and those that are close to becoming such. Look at companies with large amounts of excess income and little debt. When a recession hits, the Pay Ratio will sky rocket. Companies with low Payout Ratios will be (probably) okay. 5) Don't Feel Alone Seeing someone else's journey can be a beneficial reminder that you are not alone in experiencing adversity; shared experiences can help towards navigating a way through choppy waters. Follow or copy me and I will guide you through these turbulent times. $SPX500 $UK100 $NSDQ100

Not investment advice. The author may have financial interests in the mentioned instruments.

3 Mentioned

SPX500

SPX500 Index (Non Expiry)

UK100

UK100 Index (Non Expiry)

NSDQ100

NASDAQ100 Index (Non Expiry)

Strictly Necessary Cookies

Performance Cookies

Functional Cookies

Targeting Cookies