dividends – AIM For Your FIRE

Many new investors out there aren’t sure how to handle the recent drop in the markets. Since October 12, the DOW has been down 6.27% as of the writing of this post. The S&P 500 has been down 5.69% over the same time span. If you’re new to investing and haven’t experienced a drop yet, you might be panicking because your small account has constantly been losing money over the past 2 weeks.

I’m here to tell you to not panic!

Think of the markets as a roller coaster. There will be ups and downs, twists and turns. It’s up to you to stay disciplined and to not panic. If you consider the market as a literal market, you want to buy items that are on sale right? That’s the way I think about dips in the market. All of my favorite items are on sale! It’s not like one or two of my investments are down because they’re bad investments, the entire market is down so I have nothing to worry about. If anything, I think of it as an opportunity.

I’m 27 and still have decades of investing to do before I officially retire. So averaging down for my portfolio is great for me. For those who are close to retirement, this might not be the case. But for most of you new investors out there, this is an opportunity. The market as a whole is consistently upward trending.

If you take a look at the chart above, you’ll see that throughout the span of 90 years, there is an upward trend. The Great Recession was an awful event that devastated millions of families, but if you look at the market, the economy recovered and skyrocketed even higher than it was before.

If you stayed in the market and bought at the low in 2009, for the past 12 years, your wealth would have grown by 338%! I’m not saying that this is what is currently happening, I mean it might because of the pandemic, but it might not.

The moral of the story is that you don’t want to get off the roller coaster while it’s going because that’s when you get hurt. Investing in the market regardless of if it’s down or not is something that seasoned investors do. While you can’t time the market, you can utilize dollar cost averaging at any time.

I hope after reading the post, you settle down and make a decision not out of panic, but out of careful consideration. You will experience downturns in the market and if you’ve been in it for any considerable length of time, you’ll definitely feel market slides. Although it might be tough to stay in and not panic, getting out at the bottom is the worst thing you can do for your finances.

I’ll end on that note for this post and I hope you enjoyed reading about the stock market dips that we are currently experiencing. Thank you so much for reading and I’ll catch you on the next one!

Marcus

As a dividend investor, I’m constantly looking for new opportunities and dividends to invest in. This time, my digging has brought me to a company that’s been around for over half a century. It’s an insurance company that has a solid and consistent track record and after being on my radar for some time now, I’ve finally decided to take a position in it.

In my next batch of purchases, I will be investing in the most annoying duck that has ever been on commercials… Aflac.

Like I said before, this company deals with insurance and right now, people need insurance more than ever. With the current political landscape, our healthcare system isn’t going to be upended anytime soon contrary to what some news outlets might think. But taking the politics out of the equation, let’s look at the financials to see what makes Aflac such an attractive buy as a Dividend Aristocrat.

FINANCIALS

With a current share price of $36.58, Aflac is an easy investment to grab shares in. It currently offers a strong yield of 3.05% and it gives investors a quarterly dividend of $0.28 per share. What I really enjoy with this investment is the fact that it’s a Dividend Aristocrat. It has been consistent in growing it’s dividend for the past 38 years! With a 10 year growth rate of 6.79% Aflac really values the dividends it pays out to investors and it’s growth is very important to them.

What is even more stunning is how safe the dividend is. It’s current Payout Ratio is an incredible 23.88% While normally, I value companies that are within the 40-60% range, this company has shown that it is very consistent in the dividend growth and to a dividend investor like myself, this is a perfect opportunity to get into.

To top it all off, it’s current Price to Earnings Ratio is 9.46! This is just further proof that this dividend is so safe, that they have plenty of room to grow it more in the future and every increase in the dividend for an investor like me is essentially just a raise in the income I receive every quarter.

Conclusion

So there you have it. A Dividend Aristocrat such as Aflac has been on my radar ever since I started this journey 3 months ago. After all the research that I’ve done myself along with other blogs that I’ve read on the company, I feel like Aflac is going to be a terrific addition for my personal portfolio. I haven’t purchased shares yet, but will be doing so at the end of the month and I will be updating my portfolio when I do.

Thank you so much for reading my take on Aflac. I hope you found it informative so you can have a starting point if you want to research this company. I’m ending this post on that note and I’ll catch you on the next one!

Marcus