How I Play The Recession

I just focus on dividends and dump anything risky in my portfolio. Are we heading for a recession? That's what the MSM seems to be saying. Thing is do you act on it?

The best way I've found to sleep at night is to own quality companies and hold long term. Also, the earlier you start the better. The longer you hold a Dividend Growth stock the safer and more valuable it becomes to provide income in retirement.

What about that inverted yield curve signalling a recession is looming? Well interest rates are on hold and may even go lower. We have a housing crisis in Canada where prices are out of control and unaffordable in the big cities. Stocks usually do really well when interest rates drop.

Should you sell everything and wait on the sidelines? I never do that. We had a massacre in December remember? Did you sell then? I just hold on take my lumps on capital and ride it out. What you will find is that your dividend yield is rising even though stocks are dropping in price,

Accumulate some cash and get ready to buy some of your favourite stocks you've been watching. You should always have a list of those types of stocks you don't own but want to.

You just weather the storm when it comes and watch your income grow. If you have some dogs in your portfolio you wait until the markets start rising before you sell. Try to ignore all the fear on TV and do your own research. Don't listen to friends or you'll end up selling and regretting it.

Stay in the market and go live your life. Right now stocks are very expensive and are due to get cheaper over the summer months is my guess.

When you go this route with your stock portfolio it gets safer to own stocks. I don't buy or own any bonds, preferred shares, mutual funds or ETFs. This is Modern Portfolio Theory which I don't believe in. Right now most people are selling stocks and buying into the safety of bonds. They are not safe and cost you money in fees to own them in a fund or ETF.

To me it's bullshit. Just buy quality companies, hold long term and enjoy the always rising and increasing dividend yield. This is safety. If you buy and sell daily then this is risky. I only do that with money I can afford to lose.

If you start early enough you can also ignore all the advice on how much money you need to save for retirement.

Whether you are prepping for retirement or need income you need to HOLD! This is where the rewards are realized. It takes years to build safety in your portfolio.

Start with buying a bank stock. The one you currently hold an ATM card with. Why not? You are already paying them to do business with them. It's a no brainer.

Trade Update

I told you about buying ECA and TGOD the other day here.

I'm still holding because they are both slightly underwater and don't want to sell at a loss. I believe it may now take months to make some money here. I need oil to rise to $60-65 a barrel. This is risky but that's what trading is all about.

TGOD is my pot stock of choice because it's been beaten down the most so represents the most upside.

ECA 6%
TGOD 3.75%

How much am I willing to lose before selling? Probably between 10-15% and then deploy the money elsewhere. There had to be a reason these stocks popped up higher and then sold off. I believe more traders are piling in. I'll just wait and see for now.

I think today will be a good day for both. Happy trading!