I recently wrote a post about the “sell in may and go away” effect which states that stocks usually perform better from january to may than from may to november. It took a while this year, but we finally had a small correction in the stock market. Is it over? Who knows… But, I know that my portfolio value took a hit! Almost all of my 2014 gains were reduced to… zero! It sucks… but…
Short term capital appreciation is not my main concern. As an investing strategy, I decided to stay focused on dividend growth and value investing. I’m then more concerned by dividend income and dividend growth than by capital gains. For sure, I prefer seeing green lights than red lights in my portfolio table, But, fortunately, corrections also open opportunities to investors. During these occasions, stocks can sometime become on sale and it permits me to buy more shares of good quality companies at better prices.
I think that AFLAC (AFL) McDonald’s (MCD) and Wal Mart (WMT) are currently on sale and I decided to jump in with 16 shares of AFL at 59,10$. I recently added to my MCD holding at 95,55$ and bought 18 Wal Mart shares in june at 76,01$. If their price continues to drop, I might decide to add more Wal Mart and McDonald’s shares to my portfolio but thought that AFL would add some diversification to it and that it offered better value in the current market.
As you can see on this graph, AFLAC (AFL) share price experienced a sharp drop recently after posting a 8,9% profit drop during the second quarter.
For sure, it’s no good news… But, AFLAC is here to stay and a bad quarter is not enough for a long term investor like me to skip a great opportunity. AFLAC is a Dividend Aristocrats. This means that the company has paid and increased their dividend for more than 25 consecutive years… 31 years in AFLAC’s case (From David Fish’s dividend champion list)! Now that’s a good commitment made to investors.
AFLAC’s beta is pretty high at 1,62 though, so the ride will be bumpier with that stock but I’m glad I could jump in almost at its 52 weeks low. Will its price drop lower than that eventually? Probably… Will I sell?? Hell no! I’ll buy more if my funds are sufficient.
My goal is to reach early retirement at or before 45 years old. I plan to live from my passive income and dividend income should be my main source. With this new addition, I’m currently invested in 10 great companies paying growing dividends and I love it![author] [author_image timthumb=’on’]http://quityourdayjob101.com/wp-content/uploads/2014/03/ID-10050051.jpg[/author_image] [author_info]Hi, my name is Allan. I’m the masked blogger. Like you I’m a modern slave, prisoner of a 9@5 job in Corporate America. They told us when we were young that we would live in a society of leisure and that technology would permit us to work only a couple of hours per day. But we live in a society of stress and uncertainty. My situation could be a lot worse and I know it. So many humans are suffering on this planet. But a golden cage remains a cage anyway. At least, I have an escape plan. I will retire before 45 years old over my passive income. This is a dream that is so powerful that I will make sure it happens. To build my wealth, I mainly invest in undervalued dividend growth stocks. [/author_info] [/author]
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