Dividend Investing is easy when you have a plan. Its easy when the stock market has rallied 20% to start the year. However, its a lot harder to have conviction in something when you are seeing it struggle to make new highs and continues to trade in a range. During this period of time you may see your account stay stagnant even though you are constantly throwing money into your brokerage. Im here to tell you thats ok.
It will happen. Some years will be better than others. During those bad years have patience. It helps when you understand that even if the your account balance is stagnant your still progressing. You are actively buying more shares of your favorite companies. Your buying more and more income for your future self. During these stages called accumulation your dollars are buying more shares for cheaper prices. The one thing you need to do is have patience.
Stay Consistent
The next bull market is always around the corner. You wont know when it will go up or how long the market will go down. Understand the markets although not predictable are very cyclical. So understanding this one simple concept can keep you from making a huge mistake. That mistake being selling out of your positions during a bear market when you shouldn’t have.
I’m not saying to never sell. What I am saying is don’t cut your self short during your early years jumping in and out of stocks. What you will end up doing is cutting off the life cycle of your investing journey. Effectively destroying the benefits of compound interest. This could be your greatest downfall especially early in your investing journey.
Compound interest is the life blood of investing. Seeing your investments grow into life changing wealth over the course of 10, 20, 30 years. Its underestimated how much power a simple 7% annual return with a dividend growth rate of 9-10%. This can grow into passive income stream that would rival your favorite youtube channels monthly income. So I write all of this to say stay invested, stay consistent and stay patient because the results of not doing you truly cannot afford.