Buy when stocks are discounted

When the whole market drops, long term dividend growth investors rejoice. Many high quality companies will be on sale at 5-10% discounts, often selling at prices we haven't seen in a year, or beyond. If you've done your research and have money ready to go, this is your chance to beef up your portfolio.
Unfortunately, I've just put my monthly allowance into JNJ recently, so I don't have fresh cash available right now. If things stay low I will invest early September.

It is refreshing to talk about a market drop in terms of buy opportunities. Before I was heavy into dividend stocks, I focused on capital gains, and a day like today would be terrible. I suspect it will take some time to recover. For dividend stocks this is great. In fact, I think that those companies that committed to share buy backs are having a ball today. I'm not clear about regulations, but today'd be a great day to buy back shares in large amounts. This in turn is good for earnings per share and hence dividends per share. It allows companies to meet their dividend obligations. For dividend investors it means the dividend and dividend growth is just that much more save.

Of course there are underlying reasons for the market drop. The China situation should not be under-estimated. But it 'feels' like there is no real data to support why some companies dropped in valuation this much in one day. They certainly didn't lose customers or announce bad sales today. So I think the best approach is to keep investing. Average down where possible. Start new positions for those gems that are never on sale. And then watch things recover.

Don't Believe the Analysts!

Many people have an opinion about a stock. From your neighbor, to finance bloggers, to entertainers like Jim Cramer, to professional analysts working for large financial firms. "Official" earning expectations are quoted in earning as "Wall Street consensus" and allows companies to 'beat expectations.' I never understood the big deal about missing or beating expectations. Missing your own goals as a company is bad, but who cares what all the analysts say ? As a dividend investor I look for the best signal about a business -- not if they had more earnings per share than the bean counters expected, but if the company pays and raises their dividend when I expect it (based on their track record).

How to sleep better when the bears rule

In the 2008 market drop many people lost a lot of money. Especially those that panicked and got out of the market. They bought high and sold low. I was worried, but held on to my stocks. Everything bounced back, and then some.

Today, I could really care less about what the market does. I'm invested in solid companies, that have weathered bear markets before. Throughout these markets these companies have continued to pay their shareholders dividends, and even increase the payouts.

Take profit on overheated market ?

With record highs yesterday, should we sell our stocks, wait until they drop 10% and then buy more of them back for the same money ?

Don't invest when the market is at an all-time high ?

It is impossible to time the market, since no one can know the future. With the market red hot and hitting all-time record highs today, is it still wise to invest ? Here are some reasons why and why not.