3 Ways Dividend Stocks Can Help You Survive a Stock Market Crash
Will the stock market crash this year? We really don't know.
What we do know is that stocks are largely overvalued right now, and that there's reason to expect volatility in the coming months. A slower than expected vaccine rollout, coronavirus surges, and spiking jobless claims could impact the stock market in a very meaningful way. As such, it's a good idea for investors to brace for the possibility of a stock market crash and do their part to prepare for it. That means loading up on emergency savings and making sure they're invested appropriately given the potential for a near-term decline. And with regard to the latter, dividend stocks are actually a pretty good bet. Here's why.
When stock values tumble, it's important to have cash on hand. The reason? If you're forced to liquidate stocks when they're down, you'll lock in losses. If you leave your investments alone, you may not lose a dime. The good thing about dividend stocks is that they generally keep paying consistently even when the market is down, so if you need money, you can use your dividend payments as an income source instead of reinvesting them. That could, in turn, allow you to keep your portfolio untapped.
Source Fool.com
