Previously we wrote about the hardest part of dividend investing; Getting Started. We can call this the first hardest part.
Later we wrote about another hardest part: The wait for dividends. We wait and dividends come “only” every three months. (For the most part. A few companies pay monthly, or annually, or semi annually, but these are few and far between.). We can call this wait the second hardest part.
Time to add another hardest part. Waiting for opportunities while doing nothing. We can call this the third hardest part.
Aim
As a dividend investor, I aim to buy when prices are low. Low prices plus dividend reinvestment is the great formula for increasing dividend income.
I keep a price target for most all my holdings and automatically check how far the current price is from its target. During a bull run when prices are climbing, there is often not much for me to do. [When I say “not much for me to do,” I should say I never stop dollar cost averaging on some stocks.] When high prices mean prices are are far from my targets, I find it hard to want to buy. But it is also hard to do nothing.
The all-too-human tendency to jump in and “do something,” namely, buying, is almost overwhelming when prices increase. The world seems to all be buying and prices are going up. But I know to wait is the best course of action for increasing my net worth is to wait.
I want to stick to my convictions and keep my powder dry and wait until prices decline. During price declines, as a stock’s price nears my target, I pay attention, and may often buy.
That is why I count Doing Nothing among the hardest things to do.
Another hard thing
Not to say there aren’t other hard things. As an example, for someone starting on their investing path, accumulating enough capital to start can be difficult, and classify as hard.
Count
But how many things can be the hardest? Logically, only one thing can be the hardest thing. Perhaps all of these hardest things share the hardest label. In that case, not one is the hardest as they all share hardness. Semantics.
Off Beat
This reminds me of a sad joke I have repeated which was once heard in a software development company. A director of engineering tells the vice president that 95% of a project has been completed. Wonderful, says the vice president, when will the rest be finished? Now we just need to complete the other 95%, is the response.
What is hard for you? Let me know here.
Illustrated is from the nine-volume set of Antiquities of Mexico (1831-48) by Edward King, Viscount Kingsborough. Written in English, Italian, and Spanish, volumes are currently housed in the Royal Libraries of Paris, Berlin, and Dresden; in the Imperial Library of Vienna; in the Vatican Library; in the Borgian Museum at Rome; in the Library of the Institute at Bologna; and in the Bodleian Library at Oxford.
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