It's hard for all of us, even an income investor, to keep our heads when everybody thinks the sky is falling.
As I write this article, the Dow Jones Industrial Average closed for the day below 10,000, and the recent trend has been down. The economic news is bad, and the media is on a heavy "the sky is falling" kick.
The Sky is Falling, The Sky is Falling
Therefore, as I sit here writing this article, I'm sure many people around America are thinking about selling their stocks before their prices go down more. Some will consider, then decide against it, at least for now.
Others are entering "Sell" orders into their online brokerage accounts. Others will be calling their mutual fund representatives and brokers first thing tomorrow morning and issuing orders to sell.
And of course, all that selling tend to make market prices go down further, which increases the mental/emotional pressure on people who still own stock, encouraging more investors to sell out, and so on.
It's a trend that could feed on itself to drive the market down a lot more.
Will it? I don't know. Maybe today was the bottom. Maybe. Maybe not.
The point is, should income investors give in to the general atmosphere fear of panic and fear, and sell?
Not unless you're crazy. That's my diplomatic answer.
So Long as Markets Function, You Can Receive Income From Your Investments
Look, I'm not an optimist by nature. I have a lot of fear about the near and mid term economy of the United States, given the huge amounts of personal, corporate and government debt, the federal (and many state and local) budget deficits, the healthcare bill passed last year, the retirement of baby boomers, the cost of crude oil, the international threats we face, the unwillingness of the closet socialists running Congress and the Senate to enact rational, wealth creating economic policies and many other issues. There's no shortage of things to worry about, and I do worry about them.
However, the world isn't going to end. I hope.
If it does -- if we suffer a global ecological collapse or a nuclear war or an invasion of hostile aliens -- then your retirement portfolio will be the least of your worries.
Until we reach such an extreme, companies will continue to operate to supply people with basic human needs such as food, housing and energy.
Many of those companies will make a profit. Many of them will pay dividends to shareholders and interest to bond owners.
Therefore, income investors who continue to own those stocks and bonds will receiving income from their investments, and that's the point.
If You Sell, You Get Cash, Which is Going Down in Value
If you sell, you're back to cash. That's not a bad thing to have (everybody should have some), but it earns almost nothing in savings accounts, money market funds and certificates of deposit. Besides, in the financial crisis we're in, none of those things are 100% guaranteed either.
And with the value of the U.S. dollar sliding, cash is certainly a safe "investment."
(And I almost forgot to mention that if you sell for a gain, you've got to share it with the federal government, so they can bailout the economy . . . )
Keep Buying -- Low Prices are Bargain Prices
If you are currently buying income investments because you're still accumulating your retirement portfolio -- whether through regular contributions from earned income, reinvesting investment income or both -- you should continue.
Look at the current bear market as a blessing. It's enabling you to buy more new shares of dividend paying stocks than you could if the market was higher.
Let's say you're investing $100 per week out of your paycheck, just for example.
You're buying stock of the XYZ Company. If XYZ's share price is $100, you can pay only one share per week.
But if XYZ's share price is $50 because of this bear market, you're buying two shares a week instead of one.
Years from now when you're retired, your dividend income from XYZ will be twice as high, because you were able to buy twice as many shares.
Invest for Future Income, Not for a Portfolio Total, Which Changes Daily
Invest for the future (when you're living on the dividend income) rather than the past (the market value of your portfolio as of a certain date). That changes your entire perspective and outlook.
What if companies stop paying dividends and interest?
When the income stops -- that's when it's time for an income investor to panic and sell.
Author Resource:
You can build a permanent, income generating retirement portfolio. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how, as an income investor you too can retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/.
![[Valid RSS feed]](http://www.adfreearticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.adfreearticles.com/images/rss.jpg "XML Feed For RSS")