There must be a point right? Otherwise why do it.
Just when you thought you knew which end was up…
Reading
I recently read a blog post online where the blogger stated that when stocks crash, he thinks that holding stocks forever is pointless because they provide “no utility” (his words). He went on to write that he needs to sell something once in a while to pay for something or some experience.
(Of course, that poster’s lament about “utility” could just be a disguise for regret of not selling when prices were higher. I wouldn’t know…)
Completely Different
I have a different view. Because I have a different mindset.
If one buys stock with the expectation of selling later, hopefully for a profit, then Yes, selling becomes the way to get “utility” (e.g., usefulness) from them.
But selling is not the only way to get utility from stocks. It depends on one’s intention.
Utility
I buy stock for income. I don’t buy stock with the expectation that later I will sell for a profit.
Income comes in the form of dividends. So to put it another way, I buy stock for dividends.
Bonanza
I consider dividend investing to be better than buy-and-sell investing. With dividend investing, one does not need to sell to get “utility” from one’s investment. Just let the dividends accumulate and compound, then one has a steady stream of income for which one can derive whatever utility one wants.
Stock prices are based on the whims and fantasies of speculators, and the fear and greed of investors. But dividends are based on the cold cash that companies send out to the stockholders. As a result, dividends are much more stable that stock prices.
The utility one gets from dividends is a sober confidence one’s financial condition. Worry about future income is reduced or so negligible as to be non-existent. I know that dividends do fluctuate at times, but that does not worry me. As long as business exists, I will be receiving dividends.
Have dividends reduced your anciety? Let me know here.
Illustrated are two drawings from patent 452,966 of 1891 for a “Method of Producing Instantaneous Photographs,” a Kinesigraph–a early form of motion pictures.
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