Sure, stocks carry plenty of risk. But that risk is known. What’s more, it’s easily counteracted with inverse ETFs.

On the other hand, many so-called “safe” investments come with all kinds of hidden risks.

Let’s start with one of the most blatant examples — the fact that America’s oldest money market fund recently told its investors, “NO WITHDRAWALS.”

That was the first time in history that a large money market fund was forced to freeze out its customers from their deposits.

And what were investors getting for that unadvertised risk? An average annual return of 2.8%.

That’s not even enough to keep pace with rising costs for gasoline, health-care, food, and other daily necessities!

Moreover, in a money market fund, your principal never grows. If you’re lucky, you will end up with exactly what you started with — that’s the best result you can hope for. And because of inflation, what you started with will buy you a lot less than it does today.

You have the exact same problem with CDs and bonds. You take on risk, get low yields, and the value of the principal will get eaten away by inflation. Money funds, bonds, and CDs give you zero growth in your nest egg … they add nothing to your retirement fund … your child’s college fund … or your “just let me enjoy life” fund. They’re a dead end precisely when you need an open highway.

In contrast, plenty of dividend stocks boast rising payments year after year.

Learn more about why dividend payments are better income investments than bonds today.

To your dividend investing success,

InvestingInDividends.com

If you’re an income investor holding dividend stocks, you face a big problem in volatile markets like we have today. Even if you’re holding Dow stocks that have long histories of steadily rising dividend payments — stocks that are perfect long-term core income holdings — you run the risk of watching share prices plummet during sell-offs.

If you can handle the gut-wrenching declines that are part of the stock market game, great! A long-term perspective is important.

But what if you don’t want to just stand by and watch your portfolio lose value, even if it’s only on paper? You face a few choices …

A. You could sell immediately. But then your dividend checks will stop coming. Worse yet, you will probably end up jumping back in after the market rises — selling lower and buying higher. B. You could implement stop losses, which instruct your broker to sell your shares if they fall to a predetermined price. But again, you face the same problems above. A couple volatile days will knock you right off the income wagon.C. You could buy an inverse Dow ETF, which gives you immediate protection from a short-term market meltdown and allows you to keep your core income holdings (and the dividend streams!).C. is the best choice, especially when you use a double inverse ETF since it gives you twice the hedging power for the same money. Learn how to use Inverse ETFs today.

To your investing in dividends success,

InvestingInDividends.com

This latest bear market officially began on July 9, when the S&P 500 index closed 20.5% lower than its high made on October 9, 2007.

How low can stocks go based on history?

The average bear market in the S&P 500 has seen an average loss of 34.1% over 20 months. That would take us to 1031.49, approximately where the index sits today.

It’s worth noting that, technically speaking, the “500″ does have a lot of support in the low 1000-range, too. However, the 20-month average would take us out to the summer of 2009.

The last bear market — which lasted from March 2000 to October 2002 — took the entire “500″ down 49.1% over about 30 months. If we apply that loss to this cycle’s current high point, we arrive at an S&P 500 bottom of 796.66 somewhere around March, 2010. Yikes!

Worst case, historically speaking? The fiercest bear occurred back in 1937-1942, with the index losing 60% of its value over 62 months. Today, that would mean an S&P 500 of 626.1 in the beginning of 2013.

As you can see by these numbers, there could be plenty more pain ahead. But there is also a reason to buy when everyone else is fearful.

Look what has happened during the average bull market: A whopping 164% return over 57 months!

The historical lesson is clear: Bears can be absolutely brutal, but the ensuing bull runs have always paid off handsomely for patient investors.

Learn why it’s smart to start dividend investing while there’s blood in the streets.

To your dividend investing success,

InvestingInDividends.com

Keep Crashes in Perspective

As a stock investor, it’s hard to watch massive daily drops in the Dow and other benchmarks. They affect every single one of us with money parked in investments.

However, just for a little perspective, take a look at two charts.

The first chart shows you what the Crash of 1987 looked like during the hammering. As you can see, it was certainly NOT fun to be in the middle of it …

Now, here’s the same crash, five years later …

It took the Dow about two years to get back to its pre-crash level … and another couple years to move much higher.

Regardless, a new foundation was laid.

Take one last look at that chart. Did you notice the scale? Back then, just twenty years ago, the Dow was around 2500! And at the bottom of the crash, it was closer to 1700!

That puts the recent 778-point drop to 10,365 into perspective a little bit, doesn’t it?

Gain a better perspective in the dividend investing world.

To your dividend investing success,

InvestingInDividends.com