Friday, June 24, 2016

Time in the Market Trumps Timing the Market

Good morning,

As you are probably aware by now, British voters have decided to leave the EU. The stock markets around the world are falling; currencies are going all over the place. Everyone is scared.

As an individual investor however, I have realized that the world is uncertain. I cannot do much about the fact that things change over time. I cannot do much about what other people feel, or do. I can only control what I do, or how I approach a situation.

The fact remains that we need to save for retirement. Therefore, as an investor, I can continue do follow my plan and focus on things within my control. Those things include:

1.Saving money every month, because I live below my means
2.Investing that money in dividend stocks and my 401 (k)
3.Reinvesting dividends strategically
4.Allowing my investments to compound over long periods of time

I personally believe that time in the market beats timing the market. This is because I am letting the companies do the heavy lifting for me over time, and thus allowing the maximum amount of time to let the power of compounding do its magic.

You may like the following articles I had written before:

If I were already retired, I would continue sticking to my plan, and living off those dividends, interest and pension income I am generating.

On a side note, I posted an analysis of Diageo (DEO) last week.

I would be interested in nibbling more if this stock goes below $100/share. It is also possible that today you may be able to see some bargains from companies which may be temporarily beaten down. Again, it is important to avoid extreme fear or extreme greed. Doing nothing today is perfectly fine. Nibbling and adding to some positions is probably fine. But if an investor panics and sells, chances are that they will regret this decision down the road.

I will continue following my plan. It is possible that the next several weeks will be volatile. But as a long-term accumulator of equities I welcome the opportunity to purchase future dividend income at a discount.

Thank you for reading!

Dividend Growth Investor

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