Prepare for the Lost Decade of Investing 📉
Free Spreadsheet 🔥
Dividend investing can protect you from a 'lost decade'.
The S&P 500 was at around $1,500 in the year 2000.
10 years later, it was sitting at about $1,100.
This time period is now referred to as ‘The Lost Decade’.
It’s easy to see why people would call it this. This was virtually an entire decade where the majority of investors were not able to build any wealth.
If you owned stocks that didn't pay dividends, you had absolutely no returns during this time period.
But if you did own stocks that paid dividends, a few different things could have happened.
1. You received income from your investments to help supplement your income
2. You were able to reinvest your dividends, increasing your annual dividend income.
The first option was likely used by many who had been planning for years to utilize dividend income for retirement.
These people were looked at as brilliant during this time.
Their ability to retire was not reliant on market conditions.
Despite the market going nowhere, their dividend payments continued to roll in.
Meanwhile, many people had their retirement accounts in investments like the S&P 500 at the time.
The result of that strategy, was people were forced to delay retirement, due to the fact that their retirement strategy was based off of market conditions.
Very unfortunate.
The second group of people were also fortunate.
Yes, they probably didn’t see much capital appreciation during this time (no group of people did).
But…
They were able to continue to increase their annual dividend income every year by reinvesting their dividends, and if they were wise with their investments, they also saw their stocks increase their dividend payouts over time.
Their passive income grew every year for those reasons.
The lost decade was a difficult time for the majority of investors.
But not for the intelligent dividend investor.
The intelligent dividend investor was able able to sleep well at night, knowing their payments were still coming in, and even growing.
I've heard murmurings of another 'lost decade' coming, and obviously nobody knows if that will actually happen again anytime soon.
But I do know as a long term dividend investor, this isn't something I have to fear.
But if you buy purely growth stocks... it might not be a good time.
Check out these resources:
Tickerdata 🚀 (My automated spreadsheets and instant stock data for Google Sheets!)
Interactive Brokers 💰 (My favorite place to buy and sell stocks all around the world!)
Seeking Alpha 🔥 (My favorite investment research platform!)
Other News…
At the end of every month, I send out a newsletter to my paid newsletter subscribers with a list/spreadsheet of all the dividend stocks that I believe to be currently undervalued.
This sheet was received by over 300 dividend investors last month. (Wow!)
If you’d like to receive this sheet at the end of this month, you can sign up here:
Also, I recently put out a video breaking down the recent SCHD dividend increase.
To analyze this, I created an in depth spreadsheet on the dividend history of SCHD.
You can get it by clicking here. 😃 Enjoy!
That’s all for now!
See you next week!
Dividendology 🚀