Opening Statement from the March 2020 Dividend Gems

Opening Statement from the March 2020 Dividend Gems

Originally published on March 15, 2020

Overview

Over the past several months we have been gradually increasing our bearish bias on the stock market due to valuation concerns. We have used a few basic strategies to reflect our increasingly bearish sentiment. First, we have been reducing reentry prices for most securities on the Recommended List. We have also been recommending fewer securities for investors seeking to take new positions.

Finally, for securities where investors held current positions, we advised the use of stop-loss orders to protect against downside. At the same time, we did not advise selling these stocks because they were continuing to benefit from strong momentum. We had not previously taken this more defensive approach prior to several months ago.

As it turned out, because the stock market has collapsed by around 25% since the February issue, our bearish guidance and risk management strategy worked out well for the majority of stocks on the Recommended list.

Because the market has primarily remained in a strong bearish trend since late February, most investors...