Thank you for well thought out response as always.rodbarc wrote: ↑Oct 28th, 2018 11:49 pmJust a note that my summary on the recession thread was simply data that I use to trade for the short term. None of that goes into account when I invest in dividend stocks for the long term. Only earnings and cash flow estimates matter when I calculate valuation (as the quality screening was already done and it's reviewed yearly). As an investor, I remain invested and continue to buy even during recessions, as the dividends generate more cash to buy more stocks cheaper, compounding it further. Also, remember that are lots of companies that continue to grow dividends and earnings during recession. I vividly remember Johnson & Johnson earnings in 2008, where they kept growing earnings and dividends. But the media could only report that "the bluest of the blue-chips are down 30% on market fears / recession". Same with Ross Stores, down 40% on massive earnings and dividend growth. Many consumer staples and utilities continued to grow. MAXR, MFC and TRP will probably be more negatively affected, so my personal approach is to focus on the companies that still have healthy estimates and have a diversified portfolio on sectors that are recession proof.
But nothing wrong with your plan, it's rational and aligned with your risk tolerance - and that's what matters in the end.
I haven't looked into consumer staples and utilities other than the few big ones like L and FTS.
Which sectors other than consumer staples and utilities do you think are defensive during recession?
EDIT: read up on it a little.
Looks like top stocks that did well during 2008 were indeed consumer staples like Ross Stores, Walmart, McDonalds and Dollar Tree.