Finding Value In Dividend Stocks (Part 1): Setting Up A Plan To Take Advantage Of The Correction

The much anticipated correction in stocks is officially here. U.S. Stock indices had their worst week in over 4 years and almost all the major indices are now in correction territory (defined as a 10% or more drop from the peak). Unfortunately, if you are watching the futures this morning, it looks like the sell-off is going to continue this week (futures are off another 2%). That said, we truly don't believe that this is the start of a bear market (prolonged, self-sustaining drop of 20% or more from the peak). Corrections are healthy for the market and we haven't had one in over 3 years (which is one of the longer gaps the market has ever had without a correction).

Dividend investors should not be fearful of a market correction. This is the best time to buy great stocks on sale. In our opinion, the best way to prepare for a market correction is to make sure you have a list of stocks you want to buy as well as the price you want to buy them. If you have properly diligence these stocks (and Buy Zone prices), you'll be have the confidence to carry out your plan and hopefully keep your emotions at bay.

Source: Seeking Alpha

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