Recently, people have been blogging about dividend income and I thought I should air my opinion about it as well! I have begun my dividend income investing for about a year now and have been really happy with it. My portfolio yields at 8% and I must say I’m very satisfied with what I have.
Every now and then, I stop to think. Should I increase my position or wait for a major correction before I take action? Afterall, the bull run has been going on for awhile now. I thought about the scenarios that I would take in the event of a crash.
What I would do in a crash:
- Reduce position and take profits off the table first before re-entering for higher yield .
- Average down while collecting dividends.
Honestly, I have yet to come to a decision on the actions I would take. I might be tempted to go for option 1 because I still do not have a stable source of ordinary income in the next 3 years when I am studying. Being limited on capital means that I have to utilize whatever I have efficiently. If I choose option 1, I prevent the erosion of my capital. Option 2 would be viable for me if I have a source of ordinary income substantial enough to keep adding into my positions.
My goal is still to have double digit yields, isn’t that a nice goal to have? 🙂 Feel free to leave a comment if you have a plan for people who are limited in capital with no other significant source of income like myself.