Your Guide To Repositioning Your Dividend Growth Portfolio

The coronavirus crisis may be the first global economic crisis for some investors.
This is not the time to panic, but it, for sure, is not the time to freeze as well.
I will share my experience from the previous crisis, in order to help reposition the portfolio.
Introduction
Billions of words have been written about the coronavirus crisis. The epidemic that started in China three months ago is now spreading across Europe and, according to experts, will start its exponential growth in North America soon enough. The crisis caused the government to limit social interactions and ask citizens to stay home in order to limit contact.
These extreme measures have a crippling effect on the global economy as limited interactions mean limited economic activity. Laid-off workers will limit their consumption, and in a country where private consumption is 70% of GDP, the American market reacts accordingly. According to the Trump administration, we should expect limitations until August, so investors should expect a recession.
The same remedy that helped alleviating the global financial crisis in 2008 may not be able to help. The Federal Reserve has already committed to another QE worth $700 billion in addition to its daily repo activity. However, while saving the liquidity of banks is important, this is a different crisis. Even with stimulus packages, people are still afraid to go out and are limited in ways they can use the money. This is a crisis that will not be solved by injecting funds, but it will have to be solved by the healthcare industry and the governments of the world testing, quarantining and treating patients.
The past month allowed investors to see why the S&P 500 has a much higher historical standard deviation compared to what we saw in the past decade. Yes, the stock market can go down. Yes, it is unpleasant. The VIX (NYSEARCA: VIXY) is higher today compared to its 2008 level, and investors should brace themselves for a roller coaster ride that... Read more