are we climbing a wall of worry?

In my daily perusal of the blogosphere, I'm starting to see folks talking about indicators of a correction. So, I'm trying to understand what those indicators are. After all, when the valuations are rising, they are either doing so on the back of increased earnings, or on the back of market sentiment, and we know that in the short run, the market reflects the composite emotions of investors. We can be seized by elation or dispair, follow rumors, follow the proclamations of "experts", etc. Even the habit companies are in of offering "guidance"is a potential source of worry, or earnings expectations, which are then chewed and digested by analysts, who issue their own guidance, trying to anticipate what will actually happen. These predictions lead to the game of beating estimates, or falling short of estimates, which in turn drives short term volitility on stock prices.
I'm constantly being sucked back into that vortex of anxiety based review of holdings, wondering if they are "overvalued, undervalued, or fully valued". I have to remind myself that I've decided to behave differently. I've decided to buy a stream of income, and not pay too much for that stream. Over time, I want that stream to increase, both by new purchases, and by reinvestment of dividends. Over time, more of the growth in the income stream should be from the portfolio performance itself, rather than new contributions.
When one has 50-60 issues and demands a history of rising stream of dividends, it becomes less likely that new ideas are going to pop up that haven't been seen before. The program must therefore change to which ones represent the best risk-adjusted opportunity at the moment. If the value runs up ahead of a rising dividend stream, it probably makes sense to reposition into lower PE options, understanding that rising dividends should follow the streakers, or valuation should follow rising dividends. Either way, buying the dividends rather than looking for rising valuation probably drive new money. I'm headed over to the portfolio to see if this logic is applicable right now...

what now?

So, some long time in since the last entry into the internal conversation I'm having with myself over this issue of managing my own retirement account. I examined another fee-based manager, am becoming more comfortable with the idea that I'll be doing it myself for the forseeable future. Too mistrustful, to frugal and adequately interested that noone else will do.

So what now. I'm pretty sure I'm not a momentum investor, no desire to learn anything about market timing, technical analysis. My newest grasp of concepts on the dividend growth front is that dividend payment is an indicator of disciplined management, rising dividends are an issue of corporate culture, and rising dividends drive rising valuation, as long as they are accompanied by rising earnings. So, if one can see solid prospects for rising earnings and a history of rising dividends, then one doesn't need to chase yield as much as chase growing yield. Actually, not growing yield, but rising dividend payments. Yield may not rise, if valuation is rising as the dividend rises. Yield on cost needs to rise, however.

So, since most of the "high-quality" issues circulating the newsletters and blogs have approached most writer's models of fair value, there aren't many bargains around. What's a guy to do? DRIP along, knowing that this fraction of the growing position is not being purchased with the same "margin of safety" that is so highly touted? Still, growth in position means rising dividend payments. Switch out of DRIPing and collect cash, hoping that a few bargains materialize for the growing pile of cash?
More than anytime in the last two years, now seems the time for significant patience in deploying cash, in spite of the internal pressure to be fully invested. There don't seem to be many "beaten down" gems in the dividend paying universe, so I'll keep reading all those newsletters, blogs and websites, trying to discern the nugget from the gravel of all that verbiage. I think I'll let the DRIP continue, understanding that it's a form of dollar cost averaging, and small increments purchased at higher prices doesn't negate the value of block purchases at opportune moments.
Since new money is flowing into the portfolio as I save for retirement, I still get the opportunity to either add new issues or build positions in companies of interest.
My portfolio numbers around 50 companies now; much larger than required for basic diversification, but it allows me to own a basket of stocks in various sectors, relieving me of the anxiety of choosing between the strongest companies in each sector. Provided I know what it is I am purchasing, I have been able to maintain familiarity with most all of them.
If I ever start doing fundamental analysis, I may need to pare down the list, but right now I'm feeling o.k. about letting better business heads than I do the calculating and I do the choosing between several voices I read and listen to.
It has produced a portfolio with approximately double the yield of the S&P 500, a beta of 0.8 and what appears to be a rising stream of dividend income. I trade a bit more than perhaps I should, but it's mostly about rebalancing and building positions in dividend growers.
I'm out of the options business for the time being; covered calls require repurchasing positions and capping returns in a rising market. When things start to go sideways, I'll get back into the covered calls and cash covered puts. I'm reading about the diagonal spread; sell short interval covered call, buy long interval in-the-money call, look for returns from both sides of the bet.