I don’t know about you, but I am really tired of the nonstop predictions by the money press and the media of a crash or market correction. Now there is even one out there about corporate bonds.
If I have learned one thing in the past 30 years it is when the TV and money press talk about something, especially a sell-off as much as they have been recently, it has already happened or it isn’t going to happen. Not for a while anyway.
Now, with that being said, corrections are a fact of life and this market will eventually correct. How much or when is anyone’s guess.
But if you have been paying attention to the stock and bond ideas I have talked about here on the Two-Minute, you can ignore all the sell-off rumors and go hit the ball. They won’t make any difference to you.
The types of stocks you should hold in a retirement portfolio will fluctuate in a sell-off or a correction. That is unavoidable.
But their price history and their recovery from past sell-offs should be enough assurance that if you stay put – which means staying out of the herd – you will always make money.
Take Johnson & Johnson (NYSE: JNJ).
In the last 52 weeks, its price has gone from $82 to $99.
And if you go back to the worst-case scenario for the past 50 years, 2008 and early 2009 – I like to use the worst cases so you have a good feel for how bad it could get – it was as low as $42 a share.
In even the worst correction and sell-off of our lifetimes, Johnson & Johnson and stocks like it have sold off, but always bounced back to new highs.
The fact that it also paid and increased its dividend every year, for 51 consecutive years, makes this kind of stock even easier to hold on to.
And, during the same 51 years, the stock moved from about $5 a share to $100.
Now, you can do what most small investors do, react to the media and talking heads and jump in and out of your holdings.
But I absolutely guarantee – and this is a 100% guarantee – that strategy will lose money. Always has, always will!
The only proven way, especially for retired folks, to make money safely is to stay put in stocks that have a long history of growth and are paying and increasing their dividends.
Yep, it is that simple.
If you feel the need to sell when or if the market dips, you are carrying too much risk.
Make the necessary changes now to avoid waking up broke in your 80s.