Friday, January 15, 2010

So, What If The Volitity, Bear Market Is Not Over

There have been 5 and 10 year periods in the past when the stock market has had little in the way of capital gains. What have I done? I have collected dividends. Some years the only returns you receive are dividends. This is the reason that I buy dividend paying stock.

The economy can go to hell in a hand basket, but can you image that you will not buy food, or not use electricity? Can you image that everyone will be unemployed and there will be no cars on the road? I cannot image this will happen. Even if we have a huge terrorist attack, and even if our economy takes a lot longer to recover, I cannot image these things happening.

My investment suggestion is to buy good dividend paying stock and wait things out. If things work out better than a lot of the scenarios that I have been reading, how can you lose with such stock? You may not get the big score, but you will also not lose your shirt either.

The think is no one can predict the future economy or the stock market. The problem is, like the weather, there are far too many variables to consider. Also, with the economy, big things can come at us from somewhere out in left fields that no one really expected. So, if you want to invest, get yourself some nice little dividend paying stock from a company that makes real stuff. You can then wait and see how the future will unfold. The thing to remember is that life always goes on, no matter what happens.

The other thing to talk about is probably gold. I know a lot of people are pushing it. What I do not like about gold is that is it non-income producing asset. The other thing is that in the past, gold has all of a sudden, made huge moves. People are pushing gold like they did in the last gold bull market. Then, all of a sudden, the price of gold dropped. This is not a conservative investment.

At least with other resources we use them. We use oil for cars, trucks and airplanes. We use other metal to build things. However, we like gold because it is pretty and it does not tarnish. Gold’s price has a lot to do with how we feel about it. It also has a lot to do with how we feel about our currency or the US’s currency. It is more emotional than the stock market.

I know Asian people like to keep gold as a store of value, but they generally keep it in coins or jewelry. They also have this habit as they have had a much longer history than we have, especially when it comes to currency. It was autocratic rulers that muck around with their currency and this is why they like gold. People of the democratic form of government do not tend to treat gold in the same way. This applies especially to those of European descent.

So, again I will say, to wait out the current economic situation, buy some nice dividend stock of a company that makes real things.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at

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