In the last few weeks it would appear as if our bull market is slowing down.  Don’t sweat it, it isn’t; it is going into a sideways market which is normal and no cause for alarm.  Especially when you are purchasing stocks that pay dividends, it gives you the opportunity to pick up on some good paying stocks that may have been moving out of your purchase price reach.  Also remember if you are a little scared don’t forget to place at least a 25% Trailing stop behind each position.

While most people either don’t know or just like to invest in the market upon pure speculation; investment Guru Bill Gross in a statement due to the market climate backs dividend stocks. 

PIMCO's legendary Managing Director, Bill Gross, a world-famous investment analyst, recently published an Investment Outlook column, called "Investment Potions."

"Stock P/Es will rest at lower historical norms, and higher stock prices will ultimately depend on tangible earnings growth in the form of increased dividends, not green shoots hope. An investor should remember that a journey to 3% nominal GDP means default/haircuts for assets on the upper end of the risk spectrum, as well as extremely low yielding returns for government and government-guaranteed assets at the bottom end. There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms."

Bill Gross, Managing Director of PIMCO

Here is another quick added thought: If you start investing through mutual funds, which is what most 401K’s have, you will most likely start your investing journey at -2%. This is because you will have to pay roughly 2% in fees to a portfolio manager that will be trading for you.  On the other side, if you buy a 3% dividend yield stock, you start your investing journey at +3%.

Disclaimer:  Suburban Trader is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment adviser.  You are responsible for your own investment decisions.  All information contained in our newsletters or on our web site(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence.

Suburban Trader