As we go up, we go down

Unless you’ve been living under a rock for nearly a decade, you’re well aware of the incredible run the stock market has been on since 2009.  Those of us who have been saving diligently have likely seen our own account balances hit record highs right along with the market indexes.

In fact, it recently has become fashionable to boast about your $1 million dollar portfolio.  While I will certainly applaud anyone who reached that milestone, I also will not begrudge anyone for boasting about it, if their inclined to do so.  After all, it’s an accomplishment one should feel good about, and if boasting about it inspires others, all the better.

The markets took a bit of a breather this week, with the Dow and S&P 500 both falling about 4%, their biggest weekly drops since early 2016.  I couldn’t help but think about these folks who might have recently hit the $1mm mark, only to see their balance fall back below.  If some one was sitting on a million dollars at the end of January, a 4% decline would see that balance $40,000.  Ouch.

I won’t sit here and pretend that I like watching my account balances go down, seeing your hard earned money, and returns, simply vanish, but this is one of the perks of dividend investing.  I couldn’t help but think of a song by one of my favorite bands, Guided By Voices, from the album Alien Lanes.

As I watch my balance go down, I essentially get to watch my overall yield go up.  Additionally, my projected future dividend earnings remains the same!

As long as I continue to invest in solid companies with safe dividends, it provides a little stability and some comfort when you watch share prices drop significantly.  Moments like these help assure me I’m on the right path and even provides an opportunity to make some purchases at better prices.