Diversify your wallet is one of the first concerns of investors looking forfinancial independenceDividend-paying stocks are a little less volatile and correlated to the market than others. However, despite everything, a stock market crash or a sustained decline in the market can impact them significantly. This is actually a good thing, since it means that we can take advantage of this fall to acquire them at a discount.
That being said, even if we can in some respects hope for a drop in stocks in order to be able to buy securities at a fair price, we do not appreciate the devaluation of those we already own. The fall is not dramatic from an "income" perspective. Quality companies continue to pay their dividends. Some of them even increase them while the entire market collapses. For some investors, this is enough to reassure them. Others, on the other hand, will look for ways to protect themselves from this drop.
This series of 20 articles details how to diversify your portfolio. To continue, simply click on "Next Article" below.
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Hi Jerome,
Recently revisiting that gurufocus page you pointed to regarding the "market cap./GDP" ratio, I noticed that they also have an estimate for other countries. I see that Japan is ranked second to last, with a projected return that is barely positive. For some countries, the reliability of their indicator is very questionable since they are based on too small a sample of data/history. But the data seems OK for Japan.
What do you think?
Thanks for your opinion.
Given the method used I have serious doubts... The Japanese are known for being extremely cautious and pay very little of their profit in dividends. Then, and this is in my opinion the biggest problem, estimating future profit growth has never been a reliable method.