Wednesday, March 27, 2013

Morning Thoughts...correction in focus

The market is down fairly big this morning after being up big yesterday. My Spidey sense tells me that increase in volatility usually occurs prior to a correction of some sort. As we all know the market has grinded higher and is way overdue for said correction. It is my humble opinion that those days are soon upon us.

In my dividend growth portfolio I will hold and reinvest all dividends through the correction. This is so even though many such as PG, JNJ, KMB, LOW and WMT have had excessive run ups. I believe excessive trading and trying to time the markets is bad for a long term portfolio. If the stocks tank, my dividends will buy more shares. I want to tell stories like some of the old timers: "I bought $10,000 of Coca-Cola 30 years ago, reinvested my dividends and now it's worth (insert some ungodly some of money here) and my annual income exceeds my initial investment. That's what I'm talkin' 'bout.

Aside from dividend growth I am still staying in the game with some put selling. I am only using about 30% of my cash to trade and I am only selling out of the money puts on blue chip, dividend growth stocks. Presently I have trades going in XOM, MSFT, FCX and LO. I want to have money to invest/trade the correction. I don't see many good dividend growth buy and hold opportunities at this time but I'm watching closely.


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