Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

Stocks drifted higher last week after suffering a sharp pullback. The question now is whether that pullback is over. Volatility Recedes As Stocks Inch Higher SPDR S&P 500 (NYSE: SPY) ended the week with a gain of 0.85%. The ETF is now 5.12% below its all-time high reached in May. Pullbacks of 5% to 10% have usually been considered normal in the stock market, but it seems that all declines since 2009 have… Read More

Stocks drifted higher last week after suffering a sharp pullback. The question now is whether that pullback is over. Volatility Recedes As Stocks Inch Higher SPDR S&P 500 (NYSE: SPY) ended the week with a gain of 0.85%. The ETF is now 5.12% below its all-time high reached in May. Pullbacks of 5% to 10% have usually been considered normal in the stock market, but it seems that all declines since 2009 have been accompanied by warnings that the end of the bull market is near. For a longer-term perspective, the monthly chart of SPY is shown below. This is the sixth significant decline since the bull market began in 2009. There is no way to know if any pullback will develop into a bear market. But we do know this market is very sensitive to the actions of the Federal Reserve. The latest sell-off was sparked by comments from Fed… Read More

Headline writers seemed to have settled on attributing the latest market volatility to a “taper tantrum.” They are referring to sellers seizing on comments from Federal Reserve Chairman Ben Bernanke that the Fed will eventually stop adding liquidity to the markets.#-ad_banner-# While “taper tantrum” makes a great headline, it does little to tell us whether or not the selling is the start of a significant decline. In fact,… Read More

Headline writers seemed to have settled on attributing the latest market volatility to a “taper tantrum.” They are referring to sellers seizing on comments from Federal Reserve Chairman Ben Bernanke that the Fed will eventually stop adding liquidity to the markets.#-ad_banner-# While “taper tantrum” makes a great headline, it does little to tell us whether or not the selling is the start of a significant decline. In fact, stock markets already seem to be recovering, creating even more confusion for investors. Rather than relying on headlines to determine when I should join in the selling, I base decisions on my 26-week rate of change (ROC) system. The 26-week ROC system is designed to buy the strongest ETFs when the market is rising and avoid positions in markets that are weak. Right now,… Read More

Stocks drifted higher last week after suffering a sharp pullback. The question now is whether that pullback is over. Volatility Recedes As Stocks Inch Higher SPDR S&P 500 (NYSE: SPY) ended the week with a gain of 0.85%. The ETF is now 5.12% below its all-time high reached in May. Pullbacks of 5% to 10% have usually been considered normal in the stock market, but it seems that all declines since 2009 have… Read More

Stocks drifted higher last week after suffering a sharp pullback. The question now is whether that pullback is over. Volatility Recedes As Stocks Inch Higher SPDR S&P 500 (NYSE: SPY) ended the week with a gain of 0.85%. The ETF is now 5.12% below its all-time high reached in May. Pullbacks of 5% to 10% have usually been considered normal in the stock market, but it seems that all declines since 2009 have been accompanied by warnings that the end of the bull market is near. For a longer-term perspective, the monthly chart of SPY is shown below. This is the sixth significant decline since the bull market began in 2009. There is no way to know if any pullback will develop into a bear market. But we do know this market is very sensitive to the actions of the Federal Reserve. The latest sell-off was sparked by comments from Fed… Read More

Headline writers seemed to have settled on attributing the latest market volatility to a “taper tantrum.” They are referring to sellers seizing on comments from Federal Reserve Chairman Ben Bernanke that the Fed will eventually stop adding liquidity to the markets.#-ad_banner-# While “taper tantrum” makes a great headline, it does little to tell us whether or not the selling is the start of a significant decline. In fact,… Read More

Headline writers seemed to have settled on attributing the latest market volatility to a “taper tantrum.” They are referring to sellers seizing on comments from Federal Reserve Chairman Ben Bernanke that the Fed will eventually stop adding liquidity to the markets.#-ad_banner-# While “taper tantrum” makes a great headline, it does little to tell us whether or not the selling is the start of a significant decline. In fact, stock markets already seem to be recovering, creating even more confusion for investors. Rather than relying on headlines to determine when I should join in the selling, I base decisions on my 26-week rate of change (ROC) system. The 26-week ROC system is designed to buy the strongest ETFs when the market is rising and avoid positions in markets that are weak. Right now,… Read More

Interest rates remain near historic lows. And when they eventually rise, bond prices will fall, as the two move opposite to each other. The question of how much they will fall over the long… Read More

Fundamental analysts generally focus on a company’s financial statement. They use tools like the price-to-earnings (P/E) ratio and dividend yields to find value. Many investors like to buy when these indicators are low. There are studies showing that this approach works in the long term. However, most of those studies could never be implemented by individual investors.#-ad_banner-# When studying P/E ratios or other fundamental measures of value, researchers generally divide the market into… Read More

Fundamental analysts generally focus on a company’s financial statement. They use tools like the price-to-earnings (P/E) ratio and dividend yields to find value. Many investors like to buy when these indicators are low. There are studies showing that this approach works in the long term. However, most of those studies could never be implemented by individual investors.#-ad_banner-# When studying P/E ratios or other fundamental measures of value, researchers generally divide the market into 10 groups. Each stock is assigned to one of those groups. Researchers then measure the performance of the group and usually find that the group with the lowest P/E ratio or the lowest dividend yield provides the best returns. There are at least 6,500 stocks being traded on U.S. exchanges. To duplicate a value strategy that is likely to outperform the market, you might need to buy 650 stocks. You could just select the stocks with the lowest ratios in… Read More