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Let's Change the Headline

By Jack Wellings

Dow Jones Industrial Average Share index drops 4.6%, or 1,175 points, in biggest drop since 2008 financial crisis.

In Sydney, the ‘All Ords’ dropped 1.63%, or 101 points yesterday, and will likely do the same again today. 

WHOOPEE! Crack the bubbly! Let’s celebrate!

Let’s Change the Headline:

‘The price of cars, petrol, electricity, bread, milk, clothes, wine, beer, all fell by 4.6% yesterday!'

What would you do?

GO SHOPPING, OF COURSE! AND HOPE THE PRICES DON’T RISE AGAIN TILL YOU’VE FINISHED SHOPPING.   

Does this reasoning seem weird to you? Well, yes it does - if you are a share-trader. A speculator. A gambler. 

But if you bought your shares to secure a reliable, consistent income-stream, what does today’s price matter? Apart from the fact that you could buy that same income-stream for less today.

In fact, if you are a regular contributor to your SuperFund, you ARE buying cheaper today. Whoopee!

OK, so it’s the same old message we’ve been preaching since 2002; ie ‘It’s not about the All Ords. It’s about the economy, Stupid!’

The simple fact is that lower share-prices means that you can buy more dividend-producing shares. Just like you could buy more bread, milk, petrol, etc.

And, incidentally, if you’re now retired and living on your dividend income, your income doesn’t change because there’s a temporary (they all are) fall in share prices. In fact the prognosis for dividends this year and next year (because it’s about the economy, Stupid) is nothing less than very positive.

Enjoy your day. Have a glass of bubbly. Celebrate.

I will. 

Securely yours,

Jack Wellings

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