August Market Correction

22 Aug 2015 11:57
Tags correction gm

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Amazing, In a matter of just three days the U.S. markets spiraled down 6%. Is this the beginning of a crash? Probably not and most financial pundits are calling this a correction and I agree.

The big market losers where primarily stocks that have seen astronomical price increases over the last two years like Disney (DIS) going from the $60 price range to $120. This was a good sign as investors were primarily cashing in big winners. In fact, most dividend growth stocks on average only dropped 3.9% (vs 6%) which sounds more like they were just swept up in the selling frenzy.

What did all this crazy activity due to my portfolio dividend income? Absolutely nothing! I'm getting the same forward dividend that I started the week at and then some.

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Was this a buying opportunity? Yes & No, the price drops represented only a slight improvement on yields of which I capitalized on and bought more shares of GM. GM's pullback allowed me to get an annual dividend yield of 4.7% versus the 4.5% at the beginning of the week. There just was not enough of a pullback in dividend growth stocks that screamed buy across the board so I was selective. We will see what happens the following week, if there is panic selling then there may be more opportunities.

After adding GM late Friday my annual dividend income actually increased $32 so while the markets may have lost my portfolio shows a gain. Just a wonderful advantage to Dividend Growth Investing!

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