Monday, November 9, 2015


The stock market is down due to concern over a Federal Reserve hike in interest rates.  While I like to see my stocks go up in price as much as the next guy, this is not an entirely bad thing.  Lower stock prices create more buying opportunities with higher yields for the dividend investor.  For example, NYCB's price has dropped significantly since their last dividend payment.  So the money I re-invest from this month's dividend will buy more shares at the lower price than if the price had remained high.  The more shares I own, the more the next dividend payment will be.  But wait, it's gets even better than that, because the lower price without a reduction in the dividend means I'll be getting an even higher yield on the newly purchased shares.  It also raises the average dividend yield for all of the NYCB shares owned.  As long as the market stays down, this trend will continue for all re-invested dividends.  So the real opportunity is boosting monthly cash flow and accelerating stock purchases through re-invested dividends.  It's kind of exciting to think about.  I wouldn't mind the market staying down for a while, although I'm hoping we'll avoid a major recession.

The political scene in the U.S. looks to be favoring Republicans in upcoming elections, which could be good for the stock market.  But it's a little too soon to count the Democrats out.  One things for sure, whoever ends up in control of the country, they're really going to have to do some serious reigning in of spending.  

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