My First Dividend Cut Just Happened

As we all know 2022 has been a really difficult year in the market, as no sector hasn’t been negatively impact by this bear market that started back on June 13th. That was 162 days ago, and since the average bear market lasts approximately 289, we’re only a bit over halfway though this volatile season. Of course that’s only if this bear market is typical, it could be over much sooner or much later. And that probably depends a lot on if this inflation can stop rising. But of course we all know the market was bad for awhile before we officially entered into a bear market in June, the entirety of 2022 has been a challenge in regards to share prices.
 
As both a dividend and as an income investor, I say all the time on my channel that to investors like us share prices aren’t the most important thing in regards to investing. Now you obviously don’t wanna invest in a stock taking a nosedive because it could be an indicator that a company is in a dire situation. But in general, more importantly than share price changes is the ability of a stock or a fund to be able to maintain their dividend payments. If share prices go down it’s actually good news for us, because if we’re buying more shares or reinvesting dividends it means we get to pick up more shares or fractional shares, at a discount. And 2022 has been full of great opportunities to pick up some really great stocks and funds at a really sizable discount.
 
But the reality is it’s much worse to have a stocks dividend get reduced for investors like us. It’s especially true if you happen to be living off of dividends because then your dividends are part of your livelihood. If you have a large portion of your portfolio invested in a company that has a sizable dividend cut, it can mean having to reduce living expenses or something even worse than that. That’s why all investors regardless of your investing preference should diversify to make sure you have other holdings to rely on if you do experience a dramatic dividend cut.
However certain holdings don’t always pay a consistent dividend, but instead pay different amounts each quarter or month. For example this is usually the case for covered call funds, royalty trusts, as well as some closed end funds and master limited partnerships.
 
But for the sake of transparency, one of my holdings just recently went through a dividend cut of its own. It’s the first stock I’ve discussed on this channel to actually experience a dividend cut to my knowledge. I monitor every holding I talk about on my channel to make sure they’re still in a healthy position to still pay dividends. But not since the COVID plunge in 2020 did one of my holdings go through a dividend cut. So in today’s video I’m gonna go over which stock I own and endorsed that just had it’s dividend cut, why it happened and I’ll also discuss why the sector the company operates in is currently going through a difficult season right now. I’ll also give my opinion on where this company is heading in the future.

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