Long bull market runs in stocks often have periods of volatility that can cause investors to pause and reflect on the holdings in their portfolios.
Strange things start to happen when stock markets have prolonged upward trends.
Sometimes, some of the strangeness comes directly from the human psyche and has its origins in boredom. Yes, the boredom that comes from making double digit portfolio gains over a ten year period.
There is nothing more galling for many investors, especially ones who are fairing well, than seeing instant millionaires made in asset classes that they are not invested in.
Take for example, crypto currencies, one of the most volatile asset classes there is. Investors in these assets have seen miraculous gains over the past year, and given some of it back, quickly!
Or how about this headline from the Globe and Mail: Marijuana Millionaires: The Canadian Execs Getting Rich Off The Rally.
It is hard not to feel you might be missing out on something big, but just as the underlying markets start showing some volatility of their own, it might not be the best time to change courses.
If ulcers aren’t your thing, may we suggest, or actually recommit to some items that you may already own.
Let us reintroduce you to solid, dividend paying stocks of good Canadian companies.
That’s right. Four quarterly payments that often rise as the years go by.
Those payments will soften any pullbacks in the markets and fuel higher portfolio growth when shares are climbing.
Our own Darren Sissons was quoted in the Globe and Mail on Wednesday, February 7 talking about just this thing. You can read about it here.
Suggested dividend payers included, BCE Inc. a 5.1% dividend, Manulife, paying 3.3% and Pembina Pipelines at 5.4%.
This bull market is a long one, but do not go compounding your volatility exposure by chasing the latest ‘it’ stocks of the day.
You will get enough volatility from the markets in general. Just make sure you get paid while you wait for them to settle down.