This Is When Stock Market Fortunes Are Made
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It’s been a rough stretch for the stock market lately, and if you’ve checked your portfolio, you probably don’t need me to remind you.
The S&P 500 is down 3% just in the last month, and year-to-date, it’s down about 1%. (Side note: my portfolio is actually up so far this year—gotta love that!)
Source: Snowball Analytics
At any rate, some of the S&P’s largest and highest-flying holdings have taken massive hits. Tesla is down 27% in the last month, Broadcom has dropped 12%, and Amazon has slid 14%.
Much of the turbulence this year has been tied to new leadership here in the U.S. and the ripple effects that have followed. More recently, and more specifically, the market’s latest sell-off has been driven by the implementation of new tariffs, which has seriously spooked investors and has sent share prices heading south.
I get that drops like this can be scary in the moment—sometimes to the point where it seems like the sky is falling. But when you take a step back and zoom out over a longer period of time, you’ll realize two important things.
First, the market can’t go up forever—it just doesn’t work like that. Corrections, sell-offs, and periods of volatility like what we’re experiencing now are inevitable.
Second, despite the inevitability of periodic turbulence, history has shown us time and time again that things have a way of working out.
Yes, there are days (or weeks, or months, or years) when it seems like the stock market is out to get you, but there are also days when it’s your best friend. And when you zoom out and look at the big picture, it has been much more rewarding to investors than vengeful.
Through all the wars, recessions, crises, interest rate changes, and other unexpected events, the U.S. economy and stock market have persevered, and those who have stayed the course through the highs and lows have found it to be wealthily worthwhile.
That’s one of the things about investing over a multi-decade period—it requires a certain level of faith. Tumultuous times like this remind us of that.
You have to believe that things can be better tomorrow than they are today, both for the overall market and for the individual companies you own. It's about recognizing that despite short-term catastrophes, great investments will grow over the long haul.
Having said that, now would be a great time to take inventory of your holdings, revisit the financials, and make sure the businesses you own are in a strong position to weather whatever challenges might come next.
If everything looks to be in good shape, then there’s really no reason to panic. And if you’re a dividend investor, that’s even more true.
When you invest in dividend-paying stocks, not all of your returns depend on share prices going up. No matter what’s happening in the market on any given day, those dividends will keep rolling in (unless a company cuts their dividend, of course), which makes times like these much easier to stomach.
Even better, reinvesting that steady stream of cash flow while share prices are down allows you to buy more shares at lower prices while locking in higher yields. And that’s the real silver lining here: When share prices go down, opportunity rises.
The stocks you own—or the ones you’ve been waiting to buy—go on sale, offering better valuations, a greater margin of safety, and higher potential returns moving forward.
I don’t know where the stock market goes from here, but if the share price situation keeps getting worse, it will be a great time to buy stocks. And as hard as it can be to jump in when the market is bleeding out, this is where fortunes are made.
With that said, I want to hear from you: Which stocks are you most looking forward to buying if the market keeps dropping? Write to me here and let me know.
And if you want to learn about a few deeply discounted dividend stocks that look like great buys right now, check out this video here.
Dividend Investing Democratized
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I use Seeking Alpha every single day, and have done so for years now. It's my go-to website for everything related to stock research, and it's been essential in helping me become a better investor.
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If nothing else, it's at least worth checking out the 7-Day FREE Trial.
IN MY PORTFOLIO 📈
Portfolio performance provided by Snowball Analytics
ICYMI 🎥
Why You Need The Marathon Mindset To Build Wealth | Ep. 10
In this episode of The Deep End, Ari and I discuss why you need the Marathon Mindset to build lasting, long-term wealth.
CAREFULLY CURATED 🔍
📺 Saving Starbucks - Starbucks CEO Brian Niccol sits down with the Wall Street Journal to talk about his plan to turn the tide for the world’s largest coffee chain.
🎧 Discovering Dividend Compounders - In this episode of the Investing for Beginners podcast, TJ Terwilliger from Compounding Dividends breaks down how to analyze dividend-paying companies and why smart investors choose dividend stocks.
📚 ABBV vs JNJ - Envision Research on Seeking Alpha breaks down the battle between two healthcare giants to determine which one is the better investment.
SINCE YOU ASKED 💬
"When you retire, would you cash out everything, put it all into SCHD, and just live your dream life—never checking the stock market again?"
- Christian | YouTube
This is a great question, and it’s something I think about from time to time.
There’s absolutely an appeal to going all-in on ETFs in retirement—just setting it and forgetting it, living my life without having to keep close tabs on my investments. I could definitely see the simplicity of that being a nice change of pace at some point.
Right now, though, I really enjoy what I’m doing. I love learning about businesses, investing in individual companies, and having an active role in managing my portfolio.
And so far, it’s worked out well for me—since I started investing in 2020, my actively managed dividend portfolio has outperformed the S&P 500 by a few percentage points on average each year. That could change down the road, but as long as I enjoy the process and it continues to work for me, I’ll keep doing it.
Source: Charles Schwab - Annualized returns since October 15th, 2020
In general, my rule of thumb with investing is: Never say never.
I don’t have an interest in trading options, but that doesn’t mean I never will. I don’t own any non-dividend-paying stocks, but that doesn’t mean I never will.
And while I’m not currently interested in going all-in on ETFs, that doesn’t mean I won’t at some point. For now, I’m just taking things as they come and enjoying the journey.
Having said all of that, thinking about this reminds me how fortunate we are to live in a time where investing is so accessible.
These days, you can start with as much or as little as you want, set everything up to be hands-off and automated, and not think about it for 30 years if that’s what you prefer. The fact that anyone can build wealth—without needing to keep tabs on the market or have any serious investing knowhow—is really empowering.
Have a question? Ask me here to see it featured in an upcoming newsletter.
LAST WORD 👋
Every month, I put out a video sharing three discounted stocks to buy, and recently, one of my subscribers gave me a great idea.
They asked if there was a way to track the performance of my monthly picks. At the time, there wasn’t—but I immediately thought: That’s an incredible idea. I should definitely make that happen.
So, with that said, I just created a spreadsheet to track all of the stock picks I highlight in these monthly videos. It starts from the beginning of 2023, and moving forward, I’ll be updating it with the selections for each month.
