Something rare and wonderful happened last week: The average dividend yield on the 30 Dow Jones Industrial stocks surpassed the yield on the 10-year Treasury bond. As I write, the average Dow stock yields 3%, while the 10-year Treasury yields 2.93%. Since stocks provide the possibility of growth, investors are typically willing to pay a premium over bonds. When investors think future growth will be strong, the spread widens. When they're expecting a slowdown, it narrows.
Fear and greed control markets short-term, after all. When the spread hit negative 10.3% in 1932, the market was shouting from the rooftops that investors should flee stocks and hide in bonds. Stocks then nearly quadrupled over the next five years. When the spread hit 5.3% in 2000, the market was begging investors to go all in. You know what happened next.
Source: Motley Fool
Related Articles:
________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
BDCs can be excellent investment options for those seeking high returns, particularly when acquired at favorable valuations and supported by...
-
How high is too high when it comes to dividend stocks? Of course, every income investor wants as much yield as possible. However, they also ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.