Don't Give Up on Stocks in Down Market

Most investors hate a down stock market. It's no fun to watch the value of your stock portfolio tumble month after month. But there is a bright side.

A down market lowers the prices of great companies as well as the junk ones so if you want to own stocks for the long run, great companies can be purchased at bargain prices.

So what defines a great company? A great company for long-term investors pays ever increasing dividends. PepsiCo (PEP), Coca-Cola (KO) and Johnson & Johnson (JNJ) are examples. Check out Dividend Aristocrats for many more dividend-paying companies with multi-year streaks of increasing their dividends..

Use dividend reinvestment and dollar-cost averaging, to accumulate shares while prices are down. These practices will ensure that you consistently add new shares to your portfolio. When prices turn to the upside, you will be positioned to benefit.

Be patient and let your money work during a down market.

See Down Stock Market Present Bargains to Long-Term Investors for additional discussion of buying stocks in a down market.