The financial environment we are operating in certainly adds complexity to setting a reasonable 2009 investment goal. October and November brought a rash of dividend cuts, and I don't think the carnage is over yet. As I will explore in a later article, I have compensated by taking on additional risk, leaving little additional room to withstand significant dividend cuts in the future. I am hoping to get through December with only marginal dividend cuts. However, the majority of the ETFs and CEFs that I hold will not declare until next week. I anticipate that they will continue to trend down, as they have over the last several quarters.
Looking to 2009, I anticipate it will be as bad and probably worse than 2008. It will be a challenge to prevail in this environment. In the upcoming year, I anticipate high volatility in the market, with a general trend downward. On the positive side, this will provide continued opportunities to pick up world class stocks at bargain basement prices. It will also expose the world class pretenders through dividend cuts and significant share price declines. With that as a backdrop here are my revised goals going into 2009:
I am confident that I will finish the year with higher annualized dividend income than where 2008 ended. Unfortunately, I am not confident that my string of sequential months of higher annualized dividend income will survive through 2009.
If it were easy, everyone would do it and success wouldn't be nearly as satisfying. Here's to an exciting 2009!