Market Timing – Don’t – Stack Them Div’s (New Buy)
Market Timing – Don’t – Stack Them Div’s (New Buy)
Last week the market decided to pull back a bit. It seemed crazy, everyday logging into the account and watching the losses continue to pile up. It may sound a little weird but in a way I like seeing it. Of course in my mid 30’s there is a tonne of time for it to recover for me, while someone nearing retirement may be a little more worried.
The hard part for me when this happens, is at what point to actually throw down some money..
The first day your like oh sweet the stocks I’m watching dropped a little bit, Nice! The next day wow there is starting to be some good opportunity’s out there, maybe I’ll look for something else. Let’s be real though the red on your portfolio does look kinda shitty… lol
Then it keeps dropping and the media is having a hay day. This is it, THE CRASH… Sell, Sell,Sell. The guys who have been predicting a crash for the last couple years start popping bottles. I told ya so! Why didn’t you listen to me?
Some people are predicting a pullback of 40% from the highs, while others are saying this is a little healthy blip and the market will rebound. The noise is everywhere. I have had friends calling me about their accounts being down that some advisors run. (Don’t get me started on that, some people still thinking investing is hard.) Trust me my account is down as well….
While no one knows what will happen this week, in the grand scheme of things this has been a very small pullback. The S&P 500 composite index dropped from just north of 2900 to to like 2735.. Yeah we are talking about numbers that we were at in between June and July this year…. The media needs something to write or talk about and are milking it as well as they can.
The reality is the economy is doing very well at the moment. Trump has done a lot to help businesses in the U.S. The Nafta trade agreement is now finished and really not to much changed. Well there’s a new name for it now – USMCA and Canada’s Dairy market may get a little shaken up. This should be good for us consumers though!
The steel and Aluminum tariffs from both sides of the border don’t seem to be good and China/ U.S. tariff war is not ideal to say the least.
We do have a very low unemployment rate on both sides of the border though. People have money and are spending it which is great for the economy. That’s why we are seeing the confidence of the Fed raising interest rates, and I think the Bank of Canada will follow suit this month. (Now that the black cloud called nafta is dealt with)
This is all short term noise, I’m a long term investor. The companies are still generally doing very well. The dividend’s are still coming in at the same time they always do. As I have stated before the dip’s could actually benefit people by getting a extra share or 2 with their drip program.
I asked on twitter (Im pretty active on there, and love the platform) last week what everyone was watching and what they were thinking of buying or if they would wait to see what the market does. The Dividend Guy replied will it really matter in 10 years anyways.
That kind of amplified what I was thinking in the back of my head.. It’s time in the market, Not timing the market! It was time to put my money to work and take advantage of this wonderful dip.
Last week I posted my watchlist for October and I had my eye on a couple stocks. Specifically Bank of Nova Scotia, Inter pipeline, Dream Global Reit and Laurentian Bank.
Inter pipeline dipped a bit while Dream global Reit basically held its own and didn’t do much. The banks did though. So just like clockwork I added to my position in BNS. This stock is cheap…. and it got cheaper!
At the end of the day Laurentian didn’t turn me on. It has a very nice yield, that’s for sure. Its stock is cheap because it had bad loans outstanding. supposedly they fixed that, but its not a company I see in my day to day life.
Id rather add to my positions that I already hold in my portfolio. Td Bank, Bank of Nova Scotia, National Bank and Bank of Montreal. 3 of these positions need some work as they don’t generate enough to drip a stock yet. Yup! weak….. slowly but surely.
Well as I mentioned we added to our position in BNS. Unfortunately we won’t reap the benefits of this purchase until January next year as the ex dividend date just passed by. I wont get into the business side of Bns as I have talked about it a couple times in previous purchases. To put it simply they are Canada’s most international Bank and a top 5 Canadian Bank to boot.
On Friday we bought an additional 25 shares at $72.13 per share.. I was a buyer at the 74-75$ level previously so this dip lowers my cost average and also gave me a free share compared to those levels. Very Nice!
At $72.13 per share the stock had a p/e ratio of 10.7, which is low compared to the other big 5. It also offered a whooping 4.72% yield on cost. This buy will add another 85 bucks to our forward dividend income and gets us a little closer to dripping a full stock.
To summarize, Don’t try to time the market. When the market gives you a discount as Russell Peters says – Take it and Go…
What stocks are you buying or watching these days?
Have a great Day!
* Clearly Ive drank the juice with Bank of Nova Scotia. I like the stock at current prices, but these ideas are my own. Always do your own research before making a investment decision*
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Great post Rob.. I have been in the same predicament this past week since the markets began to drop. I too have realized in the long run it doesn’t matter. I will buy now, and hold for the long run. In the meantime, I will collect the dividends to re-invest.
It can be a weird mental game at times. I can only imagine if I had a couple mil in the markets.
Just keep collecting those dividends and cashing those cheques.
You’re absolutely right that for those of us still in the accumulation phase, having prices going lower is a benefit given the long-term nature of the market increasing. However, it can be a struggle as it is nice to see the green / gains on our investments.
The types of responses that I was seeing online did give me some concern for when the next bear market does truly arrive, as if people were panicking with this drop I don’t know what people will do when we see a decline of 20-30% or more. In my mind, the important thing is to have a strategy and remain true to that strategy–selling in a panic does not work out well in the long-term.
Nice to see the buy that you’ve made and continue to build that position!
Thanks man. Its true the fear factor seemed really high, and Joe Rogan was nowhere to be found.
For me its all about the cashflow. As long as the dividends keep flowing its all good!
I picked up some BNS shares as well! Great pick and great read!
Great minds think alike!
nice pickup for you as well
Great buy, Rob! I’m ready to put some money to work this week. I’ll probably look at BNS in December and buy it before the ex-dividend day.
Nice man. What stocks are you watching? Emera?
Yes, most likely Emera if it stays below $39.
nice man thats how i feel about brookfield renewable next month.
Love pullbacks as I see you do. Usually I don’t have money for pullbacks because I’m buying when a stock drops but had some money for this one. That’s the way to do it stack the divvys.
My cash hoard is basically out at the moment.. Need to reload before the next one.
Look forward to seeing your buys in your next report.
Don’t try to buy and consistently buy those undervalued dividend stocks, love the purchase!
Thanks man, glad to have them. Just got to get enough for the drip!
Great buy. As you know, I just picked up a few myself. Glad to finally have one of the Canadian banks in my portfolio. Small position to start so we will see how it performs.
nice Daze and thanks.
I love them at these prices. And way to take advantage of the us dollar.
Rob – I love it. Way to continue putting your capital to use and stack those dividends. Timing the market is a fools game for individual investors. Have your metrics, do your analysis, so you know and understand that a company is undervalued and it makes sense to purchase them.
Great points. Got to appreciate the dips vs hating them.
Great post! I personally don’t think “timing the market” is a legit strategy, at least not for small-time investors. Best advice is to think with the brain, not with the heart!
yeah timing is really hard. Just put that money to work.
Well said. I always tout the merits of not trying to time the market and simply stay in the game. No one can call the a bottom nor a top so simply buy stocks you like and hold throughout. Like the BNS pick up too by the way. One of my 3 Canadian banks I hold as well. Keep it up!
Yeah you have definately been a huge supporter of not timing the market. Continuously making new buys. Got to love it.
Glad you like bns. Nice to see Americans holding the big 5 banks.
As you mentioned, the economy appears to be doing quite well; I’ve been reading the conference call transcripts from companies like $WM and $CU and they’re doing quite well overall.
The media will always overinflate things to put a spin on it to scare the uninformed. Just keep investing over time and let the noise work itself out. Remember how many things have happened over the last century and yet we’re still cruising along just fine.
Yeah for sure, look at the market even more recently. what is it dropping for? random shootings and mail bombs? or is the interest rate hikes? i dunno for sure but like you mentioned the economy still looks great.
ill keep on buying