The stock market goes up, it goes down. Up, down, up down. NEVER moves in a straight line.
From 1929 through 1972, 1982, 1987,1997 the stock market likes to take 30%+ dips. A 10% dip used to be called a correction (time to buy). Now unsophisticated investors are panicking over a 3% drop. Do not get into the stock market unless you are prepared to weather a 50% drop.
Over the long term (20 years) the stock market makes more money than other forms of investment. in shorter time franes it can be negative.
There are GAMBLERS and there are INVESTORS.
GAMBLERS jump on a hot stock hoping it will get hotter. There is a greater chance it will drop!
INVESTORS look for companies that make money in good times and in bad times (over 20 years or through the last 2 recessions).
They look for companies that make so much money they don't know what to do with it, so pay it out as dividends.
These companies make more money every year than the last and raise their divedends accordingly. Have to keep up with inflation. As the divedends rise it tends to push up the stock price.
The stock price may go up and down but the dividends keep comming. And the dividends stop the stock price from going down too much.
Here is a website that does research on these kind of stocks.
http://www.mergent.com/
It costs over $200 for their services BUT they have lists of the results on the websitre that you can use as a starting point to research what stock to buy.
List including:
50 highest yielding stocks
50 stocks that raise their dividnbds every year in the last 10
50 stocksthat raise their dividends the most in the last 10 years
I am semi-retired and half my income comes from cashing in a bond or GIC (CD) in my regestered retirement savings plan. The other half comes from the dividends from the stocks and dividend mutual funds i own. Amongst the doom and gloom from tuesdays stock market dip, the financial reporter mentioned of 2 of the banks I own, one raised its dividend 5% the other3%. Everbody else is panicking. I am happy I got more money to spend.