Global stock markets have turned challenging yet again.
Downturns are inevitable, but since educated investors expect them, there is no need to panic. All investors have learned after the 2008 Financial Crisis, and more recently the 2020 Pandemic, that the key to successful investing in the long-term, is not to sell into a market downturn. If anything, if cashflow permits, a wise investor will increase periodic investments after markets have dropped 15% to 25%, or more.
Personally, during times of declining stock markets, I find it helpful to focus on the dividend income my portfolio is generating.
Over time, dividends rise, and those dividend increases drive portfolio capital values higher.
For example, in the first 12 months of TheAnswerIs.ca portfolio existence back in 2016, the portfolio generated $2,722 of dividend income. However, for the most recent year, the Model Portfolio generated dividend income of $4,553, an increase of 67%, or an AVERAGE increase of 7.6% per year over the last 6 years, well ahead of inflation.