2008 was (still is?) the worst stock market and economic period I have had to live through, and I don’t think I am faring that poorly. I still have a good job in a foreign company as an expat, my stock portfolio is not down to zero, I sold out of Citigroup (even if it was too late), and my wife and kids still love me! However, I think that there is a HUGE amount of learning that we can all do as a result of this experience. Let’s face it - the old adage that you learn from your mistakes holds especially true right now!

I have done a lot of thinking over the past few weeks and while reading the message boards over at Bogleheads, Financial Webring, and The Motley Fool have come up with my own list of top learnings that I have taken away during markets such as this. This is my list, and applies to me but I would suggest that you have some that are similar and some that are different. You may even not agree with my learnings! That is cool and part of the process. Please use the comments to add learnings, debate some of mine, or comment on how you approached the market crash. I think we can all learn a lot from each other.

Here are the top 6 things I learned from the market crash of 2008:

1. Buy and hold works, but requires a long time to play out

Five years is not enough to let a portfolio do its work. I think as investors we all got used to a steadily rising market and began thinking too short term. Buy and hold requires, in my opinion, at least 10 years to do its work. I think 20 years may even be better.

2. Buy and hold really means buy and monitor

There is no such things as buy and hold, especially as the owner of individual stocks. Buy and hold will work with index funds and truly passive portfolios, but if you even own one stock in your account then it is crucial that you monitor that stock.

3. Dividend cuts really do spell trouble

I got out of Citigroup way too late. Right now, the stock is trading at slightly above $3. I sold at around $16 which I consider myself lucky however the damage to my portfolio was still dramatic. In the past, I had been burned by selling a stock that cut its dividend only to see the stock recover greatly (i.e. Merck). However, the growth of that stock has not been nearly as good as more stable dividend payers such as Wal-Mart or Johnson & Johnson. Dividend cuts in the end spell real trouble for a company.

4. It is alright to sell a stock

I recently updated my investing code to allow for sells because of dividend cuts. This is a result of the learnings #2 and #3 above. You always have to monitor your stocks, and if they take an action that spells real trouble (a la dividend cuts) then get out as soon as possible. Do not wait on hope.

5. Buy on the way down, but with a huge caveat

Dollar cost averaging into stocks as the get sucked down by a declining market is one thing. That is good investment activity. Buying a stock on the way down that is in financial trouble is gambling. Again, I go back to Citigroup as the falling knife. Be very strategic about buying declining stocks - only buy the strongest ones.

6. Never watch CNBC

Watching CNBC, especially in down markets, will only feed the dark side. These guys are total jackasses and flip their positions on a daily basis. They get eyeballs by feeding off of fear which leads to stupid decisions. A buy and hold dividend investor will be more successful by not watching CNBC.

Those are mine, for now. Who knows if this stuff is over but heres hoping my diversified asset allocation will provide me with some protection.

Welcome to the December 13, 2008 edition of The Dividend Guy’s weekly roundup of posts and articles about investing, dividend and non-dividend related. Once again a good week in terms of posts and information for all of us avid blog readers.

If you know of other blogs that are covering the topic of investing and dividends, please feel free to let us all know using the comment section below.

The DIV-Net

Cigar-butt investing

Dividend deterioration

Is GE’s dividend safe

Five stocks for any situation

Forbes best small companies

November dividend income update

Buying TD Bank

Dividend investor interview

The Articles

The amateur investing manifesto 1 and 2

Passive portfolio analysis

Reinvest dividends or keep them as cash

Ultimate investor gift

A dividend increase - my word!

Socially responsible investing

All investors are infallible

SMART financial goals

Here we go - the millions of articles presenting the top stock picks for 2009

I love asset allocation

Is portfolio diversification enough

The risk of high dividends

Investing with split shares

Personal financial windup

10 picks for income investors

Dividend machines are insurance

Doing some portfolio buying

Learn how to invest

Stock chart fraud - I never new it existed

Fearing the wrong risks

Thanks for reading!

(This article originally appeared on The DIV-Net) A few days ago one of my colleagues over at the DIV-Net wrote about online brokerages and using Zecco as low cost provider. As a Canadian, I like the sounds of Zecco’s low costs however we Canadians are not eligible to open an account with them. In this post I would like to talk about a Canadian broker that I have been using to good effect that offers cheap trades - not $0 trades but pretty close.

My primary broker for a long time was the Canadian Shareowner Association. However, due to personal situation reasons I was unable to continue using them as my broker. It was too bad because I liked the fractional share ownership and dividend reinvestment packages they offered. However, it became clear very quick that as my portfolio grew and I wanted to expand my dividend portfolio to stocks outside of the ones they offered to investors, I had to make a choice. My primary concern was commissions. In my opinion, online brokers offer a commodity. What you get from one broker is very similar to what you get from another. There are always little differences such as streaming quotes or a better interface, but for the individual investor who does not trade a lot then the differences are negligible.

With commissions as my guide I decided to go with Questrade. I had experience with them in the past for a small trading account that I had and was impressed. Their customer service was alright (and I must admit has improved since then - 1 year ago) the trades were cheap ($9.95 at the time). However, I recently moved my entire RRSP over to them and the experience has been great. The transfer was done in about 48 hours and I have already made two trades for $4.95 each.

I will be writing more about Questrade here at my blog and will be brutally honest about the experience. It is very easy to switch brokers these days so Questrade needs to ensure they keep up and provide quality service at a low cost. However, I believe that I can safely recommend them as a broker if you are Canadian and looking for a cheaper alternative to the bank run brokerages.

Welcome to the December 6, 2008 edition of The Dividend Guy’s weekly roundup of posts and articles about investing, dividend and non-dividend related. Once again a good week in terms of posts and information for all of us avid blog readers.

If you know of other blogs that are covering the topic of investing and dividends, please feel free to let us all know using the comment section below.

The DIV-Net

33% discount to their Current Assets minus Total Liabilities

Dividend Aristocrats…that have cut their dividend

Dividends for monthly income

5 dividend stocks to watch

Analysing financial statements

Procter & Gamble

Portfolio weighting

Dividend investor interview

The Articles

Mutual fund expenses are going up

Warren Buffet market calls

A portfolio update

Maverick money makers

Bargain bin stocks

Investing in stocks is NOT a mistake

Bill Gross is wrong

How is your net worth doing

More net worth updates

Canadian Tax Free Savings Account FAQs

Fat Pitch Financial portfolio update

Two financial goals

What is all the fuss about dividends

The case for dividend stock Pfizer

Modified CD Ladder

Dividends look great

Holy Grail Portfolio

Thanks for reading!