Is dividend investing on the way out?

Disclaimer: *This article may contain affiliate links* I’m not a licensed investment advisor. Also, I’m not a tax advisor and this is NOT tax advice. Please talk to a licensed investment advisor before making any investing or financial decisions. Please talk to a licensed tax advisor before making any tax decisions.

As this health crisis spreads into the economic sector, we are seeing businesses struggling to find ways to fortify their balance sheets.

One of the many tactics is to suspend dividends. A couple of the travel sector stocks have already, including Delta and Marriot International.  Several European banks have already done this and there is some talk of whether the ones in the US will follow in suit.

In the last recession, many banks were forced to cut dividends, as part of being bailed out.

Despite that, dividend investing remained strong. Sure, they may have decreased but as the economy bounced back many companies began to increase it again. If you look at the list of companies who suspended their dividends in the past, it was business not considered ‘recession-proof.’ If you are looking for inspiration on how to ‘recession-proof’ your own finances, click here.

Should I keep investing?

Absolutely! I mean, one of my biggest regrets of the last recession is that I did not invest more. I will not make that same mistake again. Those that continually invested were able to increase their networth substantially in the wake of the unprecedented gains of the last 10 years. They banked. However, having your entire networth in stocks is not great because when the market falls, so does your networth.

How will the Richful Thinker continue investing?

I will invest in companies that have been around for a long time and  are still needed even during a recession. Pretty much anything like JNJ, MMM, and KO. These are my favorites. I will also buy into some companies that have survived other recessions and have diverisified their businesses, this includes DIS.

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