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Tackle Today: The Silver Lining of Lower Prices

October 13, 2021

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≈ Reinvested Dividends. ≈


I’ve been grappling with the pain of the ongoing breakdown in Verizon’s share price. The damage hasn’t been isolated to VZ. AT&T, T-Mobile, and even Comcast have been getting thrashed over the past week. But while the price plunge steals gains and may even push positions into negative territory, I’m reminded of one of the most significant silver linings to the haircut.

Reinvested dividends buy more shares at lower prices.

If you’re a long-term investor in companies like Verizon that are both fundamentally sound and pay rising dividends, then you know the current pain is likely to be temporary. And, while prices are depressed, each quarterly dividend you receive will buy that many more shares. For example, let’s say you own 300 shares and receive quarterly payments of $192. When Verizon was trading for $60, each dividend would buy another 3.2 shares. Now, what if VZ pushes down to $50? At that point, each cash payment would buy 3.84 shares.

If like me, you believe in the stickiness of Verizon dividends (and history backs this up), then corrections and bear markets should bring pleasure. They accelerate how quickly you accumulate more shares. Consider reinvested dividends in times of turmoil the seeds your planting for future profits.


Chart of the Day

Verizon Dividend History

Verizon Dividend History

Verizon has a long history of raising dividends. This has helped shareholders up their income every year to keep pace with inflation. 

Video of the Day

The Queen’s Court

In this week’s edition of the Queens Court, the coaches bring separate trading picks for Coach Emily including IMAX, Union Pacific, and the Financial Sector ETF. Will she accept the trade ideas, or will she lop off the coaches heads?

Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.

Trade Masters 7 PM EST

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