THE MARKET PLUNGES OVER 600 POINTS, OPPORTUNITY IS KNOCKING!

The market plunged over 600 points on the first day of trading after the S & P announced its' downgrade of U.S. debt from AAA to AA+.  While many are fleeing the market for the supposed "safety" of gold and bonds, I'm looking at things from a different perspective.  The U.S. stock market is having one hell of a sale!  Stocks which were valued at much higher prices just last week are down several dollars per share.  So I'm thinking it's time to pull out the stops and go all in.

I'm not recommended this for everyone else, it's what I personally have decided to do in response to the latest market reversal.  It worked out well for me in 2008 and 2009 and I'm looking to repeat the process.  So I've once again set all stocks in my investment portfolio to reinvest dividends, which I'll continue to do until we see some recovery in the market.  Right now I'm hoping that will be way down the road.  The longer I have to pour money in at the lower prices, the better it will be when the market recovers. 

In the mean time, I'll be satisfied knowing that I'm adding to my dividend portfolio at greatly reduced prices.  I'll also be boosting regular monthly investments to both portfolios for the foreseeable future. 

WITH PANIC AND UNCERTAINTY IN THE STOCK MARKET COMES GREAT OPPORTUNITY!

There seems to be a building panic and uncertainty in the stock market media of late and why not, there are a lot of things going on in the world to bring the market down.  However, when have we not had a lot of problems in the world?  Jeff Goldblum's character in one of the Jurassic Park movies says, "Nature always finds a way."  In economics, business always finds a way to make money.  As investors, it's up to us to find the right investments at the right price that are going to make money.  In the current investment climate there is no room for panic, it's time for cool collective analysis.  It's time to take advantage of the great opportunity that's about to present itself in the next few months.

For those who keep there cool and are courageous enough to weather the downward trend in the market, it is time to pick up some quality dividend stocks at bargain prices.  I've been writing a lot lately about how much I've saved on everyday purchases with coupons and sales, now the stock market is about to go on sale and I'll be buying.  What I'll be buying is yet to be determined, but I fully intend to purchase as many shares of stock as my budget will allow while prices are down.  In keeping with this train of thought, I've reset both my investment accounts to reinvest all dividends for the foreseeable future.  Not only will I benefit from lower prices, but I'll save on commissions since reinvested dividends are commission free. 

WILL THERE BE A MARKET CORRECTION?

There has been a lot of speculation of late about a correction in the stock market. Will the market correct in the near future? I really couldn't say, one way or another, with any degree of certainty. But one thing I do know for sure is, money that is not working has no chance at all to build additional wealth. That is why I like to keep my money working all the time. Once I've earned a dollar, it goes right to work. My paychecks are deposited into interest bearing accounts. Even the money I use to pay my bills are drawn from an interest on checking account, so I'm able to earn interest on the money until the payments clear the bank. My dividends that I recieve in cash are paid directly to my money market account, so they go right to work earning interest.

I read somewhere that one of the main reasons John D. Rockefeller was so successful in business was that he always maintained a large "war chest" of cash. In keeping with my philosophy of doing what the rich do to build your wealth, I've been increasing my own cash positions. Of course I maintain the cash in interest bearing money market, checking and savings accounts and while interest rates are extremely low right now, the cash is still working and earning even more money.

I've been sticking with my plan to cut investment costs by re-investing dividends to purchase more shares, thus avoiding commissions since there are no commissions on re-invested dividends. I did purchase some additional shares in BPT to take advantage of their great dividend payout. I'm also working on increasing my stake in Astrazeneca for my IRA account. They have fantastic earnings, a great dividend payout and a good deal of cash per share. I figure it can't hurt to own a few more of their shares.

At any rate, if and when we do see another correction in the stock market, I intend to be in a better position to take advantage of the lower prices and load up on more quality stocks for my investment accounts. I plan to follow Rockefeller's example and have a "war chest" of cash to take advantage of investment opportunities as they present themselves.