Last week the market dropped hard and fast. It was exhilarating and scary to watch. On paper I lost thousands. I admit it took up a lot of space in my mind for a couple days. I kept asking myself, “What should I do?” The answer I kept coming back to was, “Nothing.” Do nothing.
There was nothing I could do. I don’t know enough about options to hedge and it’s never good to guess with investing. I likely would have lost more. My strategy is long-term buy and hold. And that strategy applies equally to both my retirement accounts and this beer money dividend game. As I’ve said before my retirement accounts are tax-advantaged and track the total stock market (with a hint of bonds based on my age). And this beer money dividend or income portfolio is for fun, but it’s taxable. In any case, I honestly didn’t know what to do. And when I don’t know what to do I don’t guess because at that point it’s gambling.
So I did nothing. And that is what the evidence says to do. Do nothing. According to a study by Fidelity, the best investors are dead. And, having done nothing, everything is almost back to where it was before.
That being said. It gave me a fresh perspective. I will likely be exiting some positions soon now that I have learned more about dividend investing. They are no longer what I consider to be quality investments for long-term growth with increasing dividend payouts. But I will also say that, more often than not, I will opt to do nothing.