Should I Sell Stocks Due to Coronavirus?

Dear DTA, 

The stock market is crazy. Thinking about selling what I’ve got. Gotta stem the bleeding. When do you think would be a good time to get back in? Appreciate it. Love the content. Keep it up!

-Sean W. 

Hi, Sean.

Thanks for writing in. We love to hear from our readers.

So glad to know you’re enjoying the content.

I understand your frustration and anxiety.

It’s not fun to see your wealth shrink.

However, I’d be very careful about acting upon your emotion.

There’s something very important to keep in mind right now.

It’s not a realized loss until you sell. 

You could be down 30%, 40%, 50%, or more on some of your stocks.

I get that. The recent volatility has been unprecedented.

That’s because we’re in an unprecedented situation here.

We’ve never shut down entire economies before. Not like this. It’s historic.

However, you don’t realize any losses unless you sell.

If you stay invested, those losses could just as well disappear as the economy starts to reopen and the clouds lift.

It’s darkest before the dawn. 

This is the time when you stick to your fundamentals as an investor.

That’s exactly what I’m doing.

I’ve been an investor for 10 years now.

I invest in high-quality dividend growth stocks like those you’ll find on the Dividend Champions, Contenders, and Challengers list.

By using the dividend growth investing strategy, I was able to go from below broke at 27 years old to financially free and retired at only 33.

And I lay out precisely how I did that in my Early Retirement Blueprint.

I built my real-money FIRE Fund by living below my means and investing my excess capital into world-class enterprises that pay reliable and rising cash dividends.

Indeed, my portfolio generates enough five-figure passive dividend income for me to live off of.

The dividend growth investing strategy is so great because it gives you a sense of calm when the environment is stormy.

Jason Fieber's Dividend Growth PortfolioSee, I’m getting paid right now.

I’m still collecting those growing dividends just like I was before.

This allows me to sleep well at night, even though stock prices are way down.

If you’re not relying on selling stocks to pay for your expenses, then there’s no need to be concerned about lower prices.

It’s actually the opposite, Sean.

If you’re a net buyer of stocks, you should be happy about cheaper stock prices. 

I buy cheap and keep.

And the lower the valuation at the time of investment, the better the long-term investment results I’ll likely see.

It’s during bear markets that tremendous long-term opportunities are born. 

This is the time to think about your long-term goals as an investor and decide what you’re really trying to accomplish.

I can’t tell you what’s going to happen tomorrow or next month. Predicting the stock market is a fool’s errand. There’s no way I could tell you when a good time to “get back in” would be.

However, I can tell you that world-class enterprises will almost surely be producing more profit a decade from now, which translates into more dividends and higher stock valuations.

I don’t need a crystal ball to predict that.

Thus, there’s no good time to “get back in” because you should always “be in”. 

That said, some stocks are better than others. Even in the universe of dividend growth stocks.

That’s why I go over some of the best dividend growth stocks in my Undervalued Dividend Growth Stock of the Week series.

Undervalued Dividend Growth Stock of the Week by Jason FieberThis series, which releases a new idea every Sunday, highlights high-quality dividend growth stocks that appear to be undervalued at the time of publication.

Every stock undergoes a rigorous analysis and valuation, and I even include valuations from professional equity analysts.

Make sure to read through fellow contributor Dave Van Knapp’s Dividend Growth Investing Lessons.

This is the A-Z on DGI, describing what this strategy is all about, why it’s so fantastic, and how to successfully execute it.

Things are scary right now. The volatility is off the charts. I empathize.

However, you need to think about the long term and how best to take advantage of this.

Some generational buying opportunities are present in the market.

So think carefully about your next move.

Regardless of what you decide to do, I’ll leave you with my best advice of all.

Start today. 

I wish you luck and success.

— Jason Fieber

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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.