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Where is the market heading? Still in correction.

Recently I have read an article on internet by a dividend investor who claimed that he doesn’t care what the market is doing as long as his dividend income is intact or improving.

Basically this is a valid statement to me and I believe many dividend growth investors are not that much concerned about the market or anything else or even the holdings in their portfolio as long as their stocks are paying dividends and there is no danger of cutting the dividends.

So why I am concerned about the stock market direction?

Market timing

The reason why I would be watching the entire market and my holdings where they are heading is because the price correction offers me a better price to buy more shares. That’s it. Seeing my holdings falling, but dividend ratio is intact, I cherish this price action as a great opportunity to buy cheaper.

Recently during the last two weeks or so, this was a great time for me and I could add a few shares of some of “my stocks” to my portfolio. So are we done with decline?

Probably not. When you take a look at the market’s price action what is awaiting us in the next week? The market is still in clear correction phase and we may drop even further next week. There may be many reasons behind it such as fiscal cliff, worries of debt crisis in Europe and who knows what else.

Right now the futures point to lower open on Monday. The market (SPY) reached the resistance and may turn back down. Will we create a new lower low or are we experiencing a reversal when the market creates its first higher low? Time will show and for me this will be a waiting game and if we head further down I see it as a great opportunity to add more shares.


Click the image to enlarge.

See above picture what I see the market will probably do in coming days. If we see a reversal, this would be a last opportunity to add to my portfolio. If we see more downturn, I will be saving more cash to buy cheaper. Time will show.

Happy Trading!

3 responses to “Where is the market heading? Still in correction.”

  1. Me too! I’m cutting corners where ever I can!

  2. admin says:

    @Marvin, agree. I only wish I would have more cash available when that comes. I am saving like crazy these days.

  3. I think the market is headed lower as well and can’t wait! I plan on picking up a lot of good dividend payers. With the “Fiscal Cliff” worries looming the market is running for cover. Honestly, in a way I think if taxes rise we will see an exodus out of stocks by some individuals which may give us an even greater buying opportunity.

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