What the heck are you supposed to do now?

The market has given back all of its gains for the past 2 1/2 years.

If you’d invested in September 2017 and sold today, you’d have exactly the same amount of money. Not a penny more.

And if you’d invested after September 2017 (anytime other than December 2018, when the market corrected and hit a recent low), you’d have less.

That is, unless you owned dividend stocks.

Since September 1, 2017, the S&P Dividend Aristocrats Index beat the S&P 500 by more than five percentage points.

Dividend Aristocrats are stocks that are members of the S&P 500 and have raised their dividends for at least 25 years in a row.

Now, 5% over 2 1/2 years is nothing amazing, but it sure beats 0%, which is the price appreciation of the S&P 500 during the same period. Plus, with the Aristocrats, you get more dividend income every year.

If you’re invested in stocks with a 4% yield, you’re halfway to the S&P 500’s historical average annual return. And if your dividends increase every year, you’ll be less concerned with price appreciation and more focused on the rising income you get paid every year.

There are some great Perpetual Dividend Raisers (companies that raise their dividends every year) on sale now with great yields.

Stocks like Chevron (NYSE: CVX), which yields 6.8%, and Brixmor Property Group (NYSE: BRX), with a fat 8.4% yield, are good examples. Both stocks are recommended in my Oxford Income Letter newsletter.

There are plenty of quality companies that are now paying dividend yields we could only dream of a few weeks ago.

Should I Buy or Sell?

I would not advise plowing all of your cash back into the market. No one knows if we’re at or near the bottom. But it’s a good idea to start nibbling. Take a small portion and pick up a stock you’ve been watching.

I recommend stocks with solid and rising dividend yields. That way, if we’re not at the bottom, you’re getting paid to wait it out. And you’ll be getting paid more next year when the dividend increases.

If you need the cash that’s invested in the stock market, you should think about selling soon. I always recommend that investors not keep any funds that they need within three years in stocks because anything can happen – as we just saw.

So if your three-year money is currently in the stock market, I’d suggest taking it out on any bounce. And I wouldn’t let it go much lower. Consider putting a tight stop on your stocks so that if the market does head lower, you’ll be out without suffering even worse losses.

Again, that’s for investors who need the money soon. If you’re a long-term investor, this will be a blip, albeit a memorable one.

If we get a handle on the coronavirus, the economic impact will be painful but hopefully short-lived. If the virus spreads and economic life is further disrupted, a nasty recession could unfold and the market could head lower in anticipation of a weak economy.

Take things slow. Our economy and stock market have endured all kinds of disruptions, including wars, presidential assassinations, impeachments, terrorist attacks and near financial collapses.

And through it all, the market has chugged higher over the long term.

It hurts while we’re going through it, but remember that the economy and market rebound within a relatively short period of time.

Even the most recent bear market, the one that occurred in 2008 during the Great Recession, lasted only a year and a half.

The short-term future is uncertain. But long term, we know that markets go up. They always have and will continue to do so.