Bonds vs stocks

The S&P 500 dividend yield surpassed the 10-year yield this week for just the second time since 1958. The first occurred in November 2008, mainly because plunging share prices lifted the relative value of payouts by companies in the index.

Some analysts suggest that this condition makes stocks more attractive than bonds.

I do not agree. Stocks may decline and yields decline (bond prices rise) making bond still more attractive than stocks.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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