The Dilemma For Fully Invested Dividend Growth Investors
Here's an interesting passage from a recent article by Seeking Alpha Author Gary Gordon:
According to a Wealth-X census, the world's billionaires have roughly 22.2% of their total net worth in cash. That's the highest percentage since tracking began in 2010. Why are the wealthiest among us choosing an asset that currently yields next-to-nothing?
Is the defensiveness warranted? Recent volatility alone suggests that it might.
From here, the share market could go up, down or sideways
Nobody knows whether the share market will go up, down or sideways. And that poses a dilemma for fully invested DGI investors. Back in 2008 to 2009 there was a lot of residual fear in the market following the GFC events. No one really knew whether the share market would go up, down or sideways. In fact, the share market has risen since then at an increasing pace as fear has faded. Those who stayed in the market have done very well compared to those who stayed in cash. In 2016, I would say there is again considerable fear in the share market. But, it is offset by the fear of unnecessary loss of income if DGI type investments were converted to cash and there was no market downturn in the short to medium term. Even at currently elevated share prices, there is no greater certainty whether the share market will go up, down or sideways from here.
