Investing has been quite the journey for me so far. It has been a roller coaster of ups and downs. I can't even explain the series of emotions that I have gone through on this journey just over the past year. To the beginning of my journey during the oil price plunge, to the whirlwind of the BREXIT vote and now to the ups and downs of the Trump Presidency.
Moral of the story, the market will always go through times of ups and downs and I'm going to be trying a new strategy that will hopefully allow me to capitalize on the swings of the market.
I have experienced many situations where an amazing company will experience certain times of depression in the stock price and I say to myself, "If only I had money I could purchase in right now" The problem is, every time I put money into my portfolio I end up spending it within that week! Now, I'm not saying this is a bad thing since I'm putting my money to work for me right away but, I miss out on amazing entry points on quality companies.
From this point forward I will be setting aside $1,000 in my Independence Fund that will be reserved for cases that I see an opportunity arise to invest in. This will allow me to take advantage of any opportunities that come my way and cure the could of, would have, should have thought that I have endured. I also always catch myself in the trap of hindsight is 20/20.
This new strategy I'm going to be putting into play will also have a few amazing affects on my portfolio. The first off will be the most obvious by allowing me to enter the position at a more desirable entry point thus giving my investment a short of buffer from further short comings. The other amazing benefit that I gain from purchasing in at a lower price is that I will effectively be increasing my dividend yield by simply buying in at a lower price. as long as the company maintains it's dividend payouts the yield will only get higher as the share price decreases. I actually wrote an article on this subject last year that pertains to this affect.
I still don't anticipate this opportunity money to sit in my portfolio for very long but I will hold out until I see some really amazing sales to happen. I will still be following all my principals when I choose to invest within said company. With all the current sales happening in the market I think I will be using the money a lot sooner then I realize but I'm really going to try and hold out for some solid dividend earning blue chip stocks that have a good track record of increasing annual dividend payouts and growing earnings.
I really have learned a lot over the past few months and I'm really trying to adjust my mindset that has been so focused on the total annual dividend payout amount. I really need to slow it down and focus on the dividend aristocrats that will remain solid dividend paying companies as my portfolio ages. After all, this is the core principal of dividend investing.
I have also learned a very valuable lesson over the past month that I thought I knew of with my past few investment choices. When I look back at this situation I literally want to kick myself and ask what were you thinking. I'll tell you what I was thinking, I had $1,500 In Apple only earning me $30 in annual dividends. I had just found out about how high Gamestops dividend yield payout was and I thought the company was going to remain stable for a lot longer. So I sold the company that was a safe and sound dividend investment choice for one that had a higher dividend yield but also a lower quality payout. Basically I forsook quality for quantity and I got bit in the butt for it. Apple stock is now at $141 per share and I sold out at $116. Not only have I lost out on an amazing amount investment income, Gamestop is now the worst holding in my portfolio with a 20% loss! OUCH.
It has definitely been a painful lesson and I'm just going to have to lick my wounds and recover from the situation. This will however give me a good capital loss right off that I will be able to use come next tax season so I guess that Is the one bright side about the whole ordeal.
I will definitely keep the website updated around when I choose to use my new opportunity money and I expect to come back with some good results.