Dividends and Swinging Markets

We all know the stock market averages move everyday, sometimes up, sometimes down. This is good because everyday there are buyers and sellers for a variety of stocks, similar everyday in the department store of your choice there are buyers and sellers of goods. Next time you are in the department store, look around is everyone buying the same thing? the answer is no.
The similar thinking happens in the stock market, there are bargains to be had, there are expensive stocks because the companies are doing everything correct for the prevailing sentiment. For example in a low interest rate environment, companies can have extra debt to fund the companies growth (as long as there is the ability to pay for it); if interest rates were to rise and the sentiment is less debt than the companies would have to change their financing program or the market would not like it.

Markets will swing for many reasons (both fundamental and technical), but if you own companies that pay dividends, it does not matter what happens on a day to day basis. You are not selling, as long as the dividends are safe, let the markets swing to the music of the markets.

There are always more questions than answers, till the next time – to raising questions

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