February 11th, 2010 | 
Author: Investing In Dividend Paying Stocks
I was recently interviewed for a press release through a financial question and answer format. One of the questions asked of me in the interview was:
Where do you think the stock market is headed over the next five years?
My Answer!
Charles M. OMelia: No one knows! There is an old Chinese proverb that goes something like this: He who could foresee events 3 days in advance would be rich for thousands of years. On a longterm basis I have only witnessed expansion and progress. I believe that to be the nature of our American economy and our American way of life. And as our economy goes so goes the stock market and I see no reason to change that belief.
Who would have thought the expansion in China would generate 5 billion dollars of business for GE? The US companies listed on the New York stock exchange have the ability to profit throughout the global expansion of business around the world. And an investor can profit without the necessity of having to own an overseas fund or companies to profit.
Up until that question the thought of what the market was going to do tomorrow (or for that matter 5 years from now) have never concerned me. I never gave it a thought (Well maybe a little!). There just isnt enough concern on my part whether we are heading for a bear market or a bull market or if the markets are heading sideways.
When you own a portfolio filled with companies that have a history of raising their dividend every year and a systematic approach of adding more shares to the portfolio through the dividend reinvestments every quarter plus having a simple savings plan with an opportunistic buying approach of adding even more shares to the portfolio every quarter it really doesnt matter. I am always buying more shares.
Sometimes I pay too much for one of my companies; sometimes I receive a great bargain. But no matter which bargain or expensive my income from those companies always continues to grow and grow and grow and grow and grow.
Sometimes the dividend yield of one stock may be 5.15 and the following year or two (even with two dividend increases during those two years) the dividend yield would drop to less than 3. This for example may mean the stock price would have risen from the 30 dollar range to the 60 dollar range. I have found that when that 5.15 dividend yield drops to around 1 the companys stock in question becomes so high that the company usually has a stock split as well as a dividend increase.
Right now the DOW seems to be having trouble breaking that 11000 barrier. And right now I cant help thinking back way way back.
For those of you who dont remember the late 1960s early 70s the DOW barrier was 1000.
Oh what a tough time that DOW 1000 barrier was! I remember thinking its going to break it this time. Back in 1966 was the first attempt (rose to 985) and it kept on trying to break 1000 for the next 6 years. When it finally broke 1000 (it reached 1050 or so in 1972) it immediately fell back. It took another 10 years before the DOW broke the 1100 barrier. Six years for the DOW at 985 to break 1000. Another 10 years to break 1100. A total of 16 years to add a mere 115 points on the DOW.
So is the 11000 barrier in the DOW today similar to the 1100 barrier of timesgoneby? Will 11000 on the DOW become a 16 year barrier? Could be! Then again maybe not! I dont know! He who could foresee events etc.
In the meantime I will continue watching my dividend income continue to grow and grow and grow and grow and grow!
To find the LINK for the complete financial interview visit:
http://www.thestockopolyplan.com
You have permission to this article either electronically or in print as long as the author bylines are included with a live link and the article is not changed in any way. Please provide a courtesy emailto: charlesthestockopolyplan.com telling where the article was published. (Word Count 706)
About the writer:
Charles M. OMelia is an individual investor with almost 40 years of experience and passion for the stock market. The author of the book The Stockopoly Plan Investing for Retirement; published by AmericanBook Publishing. The book can be purchased at http://www.pdbookstore.com/comfiles/pages/CharlesMOMelia.shtml
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