axelrod608

Here's What World Markets Are Telling Income Investors to Do

I understand that there are many investing/trading strategies, and what you've outlined here is a cautious one. Personally, I agree since my objective is capital preservation way more important than potential profit. No market has ever gone so far so fast as the current market since March. So it is logical to expect a turndown market correction in the near future.

Dividend investors clearly realize that it takes years of dividends to recoup capital losses. Your advice to take partial positions is good. I would add the requirement of tight trailing stops to defend against losses if the market heads south.

Using the March lows as buy points makes sense for dividend investors. But even if we revisit those lows, trailing stops should still be used if for no other reason than market uncertainty. While many pundits have pronounced the current rally as "a new bull market" I'm skeptical. And I don't have unlimited years left to make up for losses.

I'm up to about 80% cash now, having taken profits from the recent rally. Might I lose some upside potential ? Sure. But I'm satisfied with +30% year-to-date (and I wish I'd done the same last year).

Another good article for dividend investors, Cliif. Thanks.