Still here in June

This year I didn't go away in May. I haven't actually ever done that. I agree that activity in the markets seems to settle down during the summer months, but I recall a 10% correction or two during the summer in past years. The overall market has been flat; a recent surge, but otherwise range-bound for about 2 years.  Recently, my portfolio has surged ahead of the broad S&P 500 index. People say it's a flight to quality, purchasing yield at any cost, such things.  It's well known that the kind of large-cap dividend-paying stalwarts that I made into the foundation of my retirement portfolio out-perform in down markets and under-perform in rising markets.

So, I didn't go away in May. I'm essentially fully invested. If there's a sizeable correction this summer, I'll be there for it. I think I'll just have to come to terms with the fact that I'm not comfortable holding a large pile of cash. Some folks see the rise and fall in stock values as gains and losses. I try to buy at reasonable valuations, so I don't view price reductions as a loss in value. I'm more interested in the compounding of shares that come from reinvesting the dividends. It's hard to make a purchase and then see the stock price swoon, particularly when it stays down over a longer period. BUT...lower price means more impact of dividend reinvestment; more rapid compounding. As long as I'm confident that I've purchase a company with favorable long term prospects, I'm happy to view my holdings in terms of the number of shares I own and the dividends thrown off by each share. Total return is a byproduct of yield and P/E multiple. The yield is always positive and tends to moderate swings in the valuation. Positive yield produces cash flow in the portfolio. Cash is reinvested in the companies that pay the dividends.  As share count grows, dividends grow. Dividends may also grow by virtue of executive decisions. Dividends per share can grow if the company is repurchasing and retiring stock.

I recently subscribed to another premium service. I'll have to spend a bit on the tools provided to get full benefit. However, it's the tools I'm after. The advice is secondary.  I want to see the performance parameters that are meaningful to me. I want to see value of my holdings, dividends in dollars and % yield. I want to see share count and how it is rising with dividend reinvestment. Once I have that, I may be able to monitor my portfolio much more effectively.