Is it a good time to invest in the stock market?

Disclosure: I am not a professional in the field of finance. In this article, I am only sharing my personal opinion.

The answer to the following question is definitely yes!

I begin to invest in the stock market back in 2008. Before that time, I was investing in mutual funds. I made my first mutual fund investment in 2005. Ever since 2008, I invested on a regular basis in stocks, fund units and mutual funds. The reason why? I strongly believe that the stock market is the place to be, even during those tough recession time.

My latest investment was on this last Tuesday, July 16. 2009. I than invested 100 units of Pengrowth Energy Trust (PGF.UN). This last Friday, on July 17, 2009, the Toronto Stock Exchange (TSX) close 10 369.42 points. The TSX market, same thing for the US one, had been quite volatile in those recession time. But the market volatility shouldn’t keep you away from the stock market. Huge some money can be made from stocks trading and dividend earnings. I am here going to share my experience with you.

Why do I keep investing in the stocks market?

Even in recession time, some companies continue to pay high dividend. Not as much as it use to be before the recession, but there’s still companies out there who pay an interesting dividend to their shareholders and unitholders. A good example of those companies would be Pembina Pipeline Income Fund (PIF.UN).

On April 14, 2009, Pembina Pipeline Income Fund had announced a straight 1.56$ yearly dividend per unit for the next 5 years. No one can say what’s the future will be, but I believe Pembina Pipeline Income Fund had been able to place this announcement because of their current and what they expect to be their future financial situation. In result of the recession, some companies had to suspend temporarily their dividend.

It’s the case of Livingston International Income Fund (LIV.UN), while Pembina Pipeline Income Fund had announced that their dividend will remain stable for the next 5 years. Isn’t fantastic? This is the kind of news that makes me want to continue my investment adventure.

In the other hand, some companies remain their dividend unchanged, just like Pembina Pipeline Income Fund. Bank of Nova Scotia (BNS) (1.96$ yearly dividend income per stock) and Fortis (FTS) (1.04$ yearly dividend income per stock), just to name those two, are among those companies who haven’t decrease their dividend, even of one cent. In Canada, no banks seem to have cut or decrease their dividend.

And finally, there’re some companies who had decrease their dividend. It’s the case of PGF.UN. Even at a 1.20$ yearly dividend, PGF.UN still remain a good company to invest in. It’s the reason why I invest in an extra 100 units this last Friday. There’re different markets, different companies, different sectors and each of them had a situation of their own. As a small investor, I prefer to invest in companies that provide a dividend.

One good mutual fund that won’t let you down

The Canadian stocks market is extraordinary. I am grateful to be born in Canada, for its stock market and for plenty of other reasons which I could explain further in another HubPages article. Here it is, the magnificent Creststreet Alternative Energy Fund, manage by Steve Martin of Creststreet Asset Management Ltd.

I personaly invested 1 000$ in the Creststreet Alternative Energy Fund back in January 2009. Ever since, I never lost any money with this investment. On date of July 17, 2009, the 1 000$ I had invested now worth 1 116$. For 2008 only, the return of Creststreet Alternative Energy Fund had been of 143%! It doesn’t take a fortune to invest in the fund. The minimum initial investment require is only of 1 000$. The Creststreet Alternative Energy Fund has all of my confidence.

Conclusion: The stock market still represent good opportunities for small investors. It’s simple and easy.

One basic rule need to be follow: diversify your assets. For myself, I am probably diversifying my assets a bit too much, but you don’t need to diversify as much as I do. I diversified my stock portfolio in 12 companies. Among those 12 companies, I own two penny stocks. Also have own different in more than 20 mutual funds, several GICs… But diversification is not all, you also need to invest in different sectors.

Need another a good reason why you should invest in recession time?

By the end of 2009, it’s 1 791.32$ I will have accumulate in dividend income. Dividend is free money that some companies are willing to pay to their investors. Like me, you should take advantage of it!

Conclusion

Even with the personal problems I am currently facing, my interest is still huge for the stock market. As you can see, I invest whenever it’s possible for me to do so. I believe in the market. This recession is not the beginning of the end; it’s only the beginning of a new beginning.

Once the “clean-up” period will finally be over, the TSX, NASDAQ and all of the stock markets worldwide will gain valuable points. The value of investment will increase and in result, companies will increase their dividends and so on. This is what I am actually looking for in the future.

Happy investment!