I try to look at things differently.
Let’s face it, market declines like we have seen in the last week are no fun—especially for those of us who have built up sizable retirement accounts over the years. That said, stock market declines are not all bad. One way to think about them is imagine you are in a store that is having a BIG SALE and your goal is to stock up.
I did some research and looked at the price changes for the stocks in the S&P 500 Index (my S&P 500 Index component source returned 502 stocks) from Friday’s close (08/21/2015) to today’s close (08/24/2015). I assumed that a person had $100,000 to invest. I ignored brokerage fees and assumed whole-share purchases. Then, I estimated the expected annual dividend payment using those numbers and compared those numbers with the numbers I got with Friday’s closing prices. The difference was pretty amazing.
On Friday, you could purchase 1,320 shares of Chevron at Friday’s close and 1,387 at today’s closing price. Assuming the dividends stay the same, Chevron would pay you an annual dividend of $5,649 based on Friday’s purchase price or $5,935 at today’s price. That’s a 5.05% increase.
Granted, these numbers come with risk. For one, the stock price could decline more. Also, the dividend could be reduced or even eliminated. So, there is risk.
That said, if you are still interested, here is a link to a PDF copy of my findings:
The stocks are in alphabetical order.