We were talking to a friend a couple of days ago – let’s call him Dandelion, Dan, for short.
Dan is a well-educated, market-savvy, highly-intelligent, well-informed, battle-hardened investor. Yet, he seemed surprised when we apprised him of the news that during the horrible market downturn we had just experienced (2007-present), hardly any companies had cut or decreased their dividends.
In fact, we told him, several companies had steadily increased their dividends during that period. Not many, certainly, but about six per week, according to our memory.
We told him about the great WSJ service, in its print edition only, called “Dividend Changes.” It’s a chart published four times a week noting dividends increased, reduced, cut, initiated, etc. We’ve mentioned this in our blog in the past, but apparently poor Dan is not reading our blog.
Yesterday’s chart showed two companies had increased, one had reduced (a municipal bond fund!), dozens of other types of mutual funds had initiated or just declared distributions, another fund had suspended its dividends, a foreign bank company had declared a dividend, and two companies, including a bank, had issued shares instead of cash dividends.
“Mutual funds went down during the Recession,” Dan noted. We agreed and have noted this fact in our blog as well. He seemed disappointed, as if he had believed the many financial advisors who insist that you should buy mutual funds because they are “safer,” unlike the “risky” individual stocks, as if mutual funds didn’t own stocks in individual companies.
Check out our recent MPI – the one picked by the monkeys. It cost just $5,000 to set up this Jan 1, and is now worth more than $5,700. Okay, we admit it, we kind of guided the monkeys’ hands as they made their picks. Still it was pretty random. The other, more famous market indexes are up, too. Naturally, they can go down tomorrow. We all know that.
Investment lesson: You can never know everything – don’t even try. Just keep on plugging away and you’ll do fine.