dennis mccain
  • Home
  • Investing
    • Dividend Kings
    • Div Aristocrats
    • Div Champions
    • Business Dev Cos
    • Monthly Dividends
  • Options
    • Weekly Options

Investing

Ideas and Strategies on Investing.

Previous Articles

Stocks Are Down, Yields Are Up

9/25/2014

0 Comments

 
The stock market is having another rough go of it these days. It happens. And in times like these every investor needs to know what he's doing. It's why we develop plans and strategies. In fact, plans and strategies were developed for times exactly like these because who needs a plan when everything is going right?
Picture
One of the things I always try to remember is that when stocks are going down, yields are going up. Sometimes way up. And while the target price generally remains the same, the delta between the current price and the target price expands causing the one year estimated gain to increase. In addition, for those that monitor the P/E ratios, the ratio often falls to a level that's acceptable or desirable.  

So when stock prices start to fall, as they have this week, dividend growth investors like myself start to get excited. Why? Because when prices are down, yields are up. And for dividend growth investors yield is what matters most. They also know that the price of the stock doesn't affect the dividend because the dividend is based on, and paid each quarter out of, the company's earnings - and earnings aren't affected by the stock price's movement up or down.

In fact, when dividends remain steady or improve while stock prices fall, dividend yields will increases proportionally. And dividend yield is where the dividend growth investors are focused when it comes to buying decisions. 

Dividend Growth Investors also keep a keen eye on the company's dividend growth rate as well as the dividend payout ratio, but the dividend yield is usually the most seductive.



Successful Dividend Growth Investors have learned, over the years, how to discover those unique companies that continually increase their dividends over a series of several years. They usually have their own individual rules on just how many years are needed, what’s the minimum acceptable yield that's needed, and what the minimum growth rate is needed in order to initiate a buy. So when the market falls, as it has for the last few days, dividend growth investors dust off their lists, check their accounts for excess funds, and get ready to go on a shopping spree. 

A falling market doesn't last for long and when it does, it's definitely a great time to be a Dividend Growth Investor. 


Picture
Picture
0 Comments



Leave a Reply.

    Print Friendly Version of this pagePrint Get a PDF version of this webpagePDF

    Picture

    Author

    I am an Individual Investor with specific interest in long term growth and then enhancing my returns with income from dividends and derivatives. I don't recommend stocks to anyone (it's a good way to lose friends) and no one reading this should misinterpret my blog as a recommendation for any type of investment. I am writing this solely for myself and my kids.


    RSS Feed


    Picture
    Top 100 Blogs for Dividend Investors

    Picture
    Follow Me on StockTwits!



    Dividend Growth Stocks
    Dividend Growth Investor


    Picture
    I'm on Seeking Alpha too!

    Archives

    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013


    ADDITIONAL RESOURCES:
    4 Month INDU Chart
    Dividend Ex-Dates
    Bidness Etc
    SharpCharts Voyeur
    StockCharts.com

    FINVIZ
    Seeking Alpha
    BDC Reporter
    Roadmap2Retire
    DivHut
    Dividend Growth Investor

    Dividend Yield

    Stock Market Mentor
    Chart Swing Trader
    Dividend Announcements
    IBD TV
    Stocks to Watch Today
    Dividend Detective

    DISCLAIMER
     I am not a licensed investment adviser, and I am not providing investment advise for you on this site. Please consult with an investment professional before you invest your money. Any opinion expressed here should not be treated as investment advice. I am not liable for any losses suffered by any party because of data or information published on this blog. Past performance is not a guarantee of future performance. Unless your investments are FDIC insured, they may decline in value.

    Picture
Powered by Create your own unique website with customizable templates.