What Would Wayne Do?
This week has been a rough week for traders in the global and US stock markets. If you have a short-term focus, you are probably very nervous. As a long-term investor, I am starting to get excited about what I can do to benefit from the decline in stock and bond prices.
Here are three choices some consider during a market correction:
- Panic and sell all your investments and go to cash.
- Wait for further decline and begin to turn on automatic dividend reinvestment.
- Use your crystal ball to determine when the market will change direction and buy just before it starts going back up again.
Option two is my choice. “Panic and sell” is foolhardy and is not a wise option, in my opinion. If you have quality investments, you should not panic and sell. Furthermore, I have yet to find a good market crystal ball, so I buy more quality investments as the market goes down. I do this with dividend income until such time that I turn on automatic reinvestment for most of my investment portfolio. Today I bought additional shares of ETF “VYM.” VYM is the ticker symbol for “Vanguard High Dividend Yield Index Fund ETF Shares.”