Category Archives: Dividend Investing

Stock Market is High: Time to Stop Buying Stocks?

The stock market is trading near its all-time high. Morningstar revealed that of the 682 U.S. stocks that its equity analysts cover, “only 5(!) have 5 stars, while 83 receive a single star.”

For those who are not familiar with Morningstar’s star system, 5 stars represent super undervalued while 1 star represents super overvalued. 

The Volatility Index, the “Fear Gauge” or “Fear Index” is a 30-day forward-looking measure of the volatility of the market. The lower the VIX is at, the less fear or more complacent the market is and vice versa. The Volatility Index also suggests there’s little fear in the stock market right now. 

Source: Stockcharts – Volatility Index

Although Morningstar covers less than 20% of the stocks on the U.S. market, its coverage includes many prominent names across different industries.

Should investors stop buying stocks in a high market? As the stock market has ascended to new heights, it has become more difficult to find value, but they do exist if you look for it.

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How to Deal With Laggards in Your Dividend Stock Portfolio

We would love to invest in winners only. But that’s not how real-life investing is like. Sooner or later, it’s inevitable to run into a laggard in your dividend stock portfolio.

Sometimes, laggards provide underperformance but still a positive return. Other times, laggards outright decline over multiple years, standing out like a sore thumb in an otherwise well-performing diversified dividend portfolio.

Here are several ways to deal with laggards. Below, I’ll revisit some of my mistakes as examples to learn from.

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When Should You Buy Dividend Stocks like Pepsi or Fortis?

Other than being dividend stocks, what do Pepsi (NASDAQ:PEP) and Fortis (TSX:FTS)(NYSE:FTS) have in common? 

The dividend stocks have resilient earnings. They are Dividend Aristocrats with a track record of dividend increases. Pepsi and Fortis pay dividends that are sustainable. They offer nice yields of about 3-4%

I use a method that suggests good stock price ranges to buy this type of dividend stocks at. Recently, I have used exactly this method to buy shares of Pepsi and Fortis. I’ll explain the method later in this article. First, let’s go through the above commonalities in more detail.

Blue sky with cloudy words saying change. Grass field in background.
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