Posted on 01/20/2009 4:02:07 PM PST by MindBender26
Cannot post due to sourcing issues, but the compendium of financial news wires is very specific. On a day when markets are usually up on hope and anticipation, they are down to record lows worldwide.
It will get MUCH worse.
Hard to tell whether to laugh or cry at that. Well said.
I tried to explain that to a good man at work today. He has a fine family and he works hard. Smart. Yet he just didn't believe me and thinks everything will be just fine and soon. He voted for P.BO. They really don't understand at all. I wonder what he will say to his children when the economy collapses?
I enjoy reading history - Years ago, nobody wanted equities except if they paid a dividend above and beyond what bonds were paying, or thereabouts. Now it is true that some GREAT stocks have never, ever paid a dividend, but that was the perceived wisdom after the “Great Depression.” The thinking was sound.
Global Warming. (It’s Nixon’s Fault)
The great thing about stong dividend yields and and coupon yields dutring volatile times is that they are cash income that you can reinvest periodically in whatever is the best looking investment at the time. They (in combination with continuing contributions) allow you to dollar-cost average, diversify and rebalance your portfolio all at the same time.
Case in point about dividends. GE just released dismal earnings report and troubling outlook for 2009. Yet it also announced that it will still pay its typical dividend, which yields about 10% at today’s market price. Why woul dit do that?
The gamble may not pay off, but it recognizes something: Asset prices are driven quite a lot by liquity, risk and income-vs-growth preferences. For the past several decades, capital growth was in high demand, and growth stocks soared. Now, with the world having seen the Lesser-Fool theory of stock trading fail, and with millions of baby boomers moving closer to retirement, we can expect to see a return to the traditional preference for income generation. The demand for growth will shift to demand for dividends and coupons.
If red (ink) is the new black (ink), yield is the new capital gain.
LOL
Yes, a bunch got wiped out in ‘29. A bunch of smart econ types try to prevent that from happening, but politics get in the way, I suppose that’s not news. My point is, there are bargains out there - don’t ask me exact stocks to buy, I wish I was that smart. But trends are your friends, etc.
Trend is down—not up.
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