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To: Afronaut
I've been out of the market (95%) since late 1999, earning a small amount on CDs and money market. My company contributes stock to my 401(k), which I have been selling on a regular basis.

I haven't gotten rich in the past couple of years, but my retirement account is bigger, something most people can't say.

I don't think this bear market is over yet by a long shot. Growth stocks that pay no dividend are still overvalued, and the air will continue to be let out of them.

On the other hand, some specific individual stocks may reach their bottom before the rest of the market does. I have no way of determining what that bottom is, either for the particular stock or the overall market, but at some price, the stocks that pay dividends are returning more on that alone than their cash alternatives.

If you saw a stock that was paying a 7% yield, based on its stock price tomorrow, how could you possibly lose by buying it? Sure, it may drop further, but you're still getting a better yield on it than if you bought a CD. As long as the company itself is not in trouble and can keep paying that dividend indefinitely, you'd be nuts to switch to cash instead.

362 posted on 07/22/2002 5:16:16 PM PDT by Dog Gone
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To: Dog Gone
The trouble with that nice 7% yield is that is can get cut to 3% in todays climate. When I was a trader during the 87 crash, there were closed end funds with paper that had some great yields and were trading at below NAV. They were there for only minutes....

Some stocks might look good down here, They might look even better in a few more weeks...

Tough call. No whiners when you get smashed though. The risk reward is not worth it.
364 posted on 07/22/2002 5:30:49 PM PDT by Afronaut
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