3 ms·

This is not financial advice, but stocks are getting cheaper every day. Invest into profitable companies that can weather the storm.

• UkrainianJew 4y ago
  There's one caveat. Say a profitable company pays $1M dividends. With the industry-average 3% yield, this puts market cap at 32M. Currently you can get 3% risk-free with government bonds, and this number will go further up as the interest rate rises. Say, it goes to 6%. Now, in order to be competitive with bonds, the profitable company will need to find a way to pay 2M in dividends, or its cap will drop to 16M (i.e. the shares you bought will lose half the value).
  • roflyear 4y ago
    Plenty of stocks have value and pay zero dividends.
    • nopzor 4y ago
      and that’s why such stocks have fallen so much, as interest rates have risen. the two of you are actually agreeing with each other. the principle is similar.