Don’t pull out! (That’s what she said). No, I’m not talking about that, I’m talking about the stock market.
Unfortunately panic, fear, and volatility are on most investors’ minds right now when they look at their portfolio. But not mine, I sleep like a baby every night. Why? Because I know the market will come back up. It may take a few years, but the market will surely come back up.
People and companies are resilient. Do you think people are going to stop ingenuity? Do you think companies are going to lay down and never grow again?
Today I want to give you the second update of my goal of creating a 40K portfolio. It’s been two months since we left off and I had invested $2,000 as my initial investment in M1 Finance.
I have since invested an additional $2,000 and purchased more holdings that have seen long-term growth and pay dividends. Here are the results…
Down 31.37%! It is simply one of those times. Just as we all expect the market to go up, we must be willing to accept the fact it will go down.
I did, however, add the following holdings because they aligned with my long-term dividend strategy.
- Invesco SPHD
- Blackrock (BLK)
- JP Morgan Chase (JPM)
- DTE Energy (DTE)
- Dominion (D)
- Realty Income Corporation (O)
- Costco (COST)
- Home Depot (HD)
- 3M (MMM)
- Nike (NKE)
- Brookfield Infrastructure Partners (BIP)
- LTC Properties (LTC)
- Caterpillar (CAT)
- Goldman Sachs (GS)
I have earned dividends too, $17.97 to be exact. Some of the holdings I have pay dividends monthly such as SPHD and O. I know that every month I will be getting dividend income. Although small right now, as I purchase more shares that will slowly increase. This is money I wouldn’t have otherwise had if I chose to invest in technology growth stocks.
One particular dividend I am keen on is SPHD because it is an ETF. With this holding, I am investing in many different high-yield dividend companies in the S&P 500. The only downfall is the 0.3% expense ratio but I believe the dividends will pay off as I obtain more shares.
Although times of economic decline are bad, historically the biggest gains in history occur shortly after recessions. This is a time to get some really good deals on stocks so if you have the cash and don’t let emotions take over, investing now may be a good idea.
As a reminder, let’s check out my investing strategy.
- Invest in the long run
- Diversify holdings
- Don’t let emotions take over
- Invest as much as I can as early as possible
- Prioritize blue-chip stocks that offer dividends
Even during this coronavirus situation, I can proudly say I have followed each of my five steps in the strategy. This method of investing is exactly what people like Warren Buffet and Benjamin Graham use and they have been able to build substantial wealth over a long period of time. If you follow these points, I know you can build wealth too.