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Bull vs. Bear: S&P Yield Eclipses 10-Year Yield

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November 21, 2008 – Comments (4)

 

Here's an interesting one that I came across this afternoon:

S&P Yield Eclipses 10-Year Yield

For the first time in five decades, the dividend yield for the S&P 500 has passed the yield of the 10-year U.S. Treasury note.  Is this a bullish sign signaling that it is time to buy stocks or a bearish sign because everyone on Earth assumes that we are entering into an extended deflationary period or at lease one with terrible corporate profits?  Interesting question.

I don't think that anyone for certain.  I'll think it over while sipping on a beer tonight.  I do know one thing though it will be a cold day in heck before I buy lock my money in for ten years at 3.5%, or even worse at interest rates approaching zero in some of the shorter-term treasury notes.  I'd rather bury the money in my back yard than give it to Uncle Sam for free.  I'll keep buying stock in high yielding companies and take my chances that I can beat a 3% annual return over the next decade thank you.

Deej

4 Comments – Post Your Own

#1) On November 21, 2008 at 5:17 PM, DemonDoug (80.36) wrote:

I'm with ya deej.

One caveat I'd put on it:

Debt.  Make sure any company you are investing in has a good debt/equity position, ZERO is optimal.  TNH is a good example - potash/agriculture, zero debt, great dividend, produces a needed, real product.

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#2) On November 21, 2008 at 7:35 PM, hansthered0 (< 20) wrote:

I have been buying bricks of silver and one ounce gold eagles. Put them in a safe bolted to the floor and invest in a shotgun. This could get deep.... real deep.

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#3) On November 21, 2008 at 7:35 PM, devoish (98.66) wrote:

Deej,

I agree. A beer is a great idea.

(so is beating 3%)

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#4) On November 21, 2008 at 9:38 PM, Tastylunch (29.22) wrote:

Long term very Bullish, short term very Bearish. Keep in mind dividends at GE and other big corps are likely getting cut and reduced and that hasn't been factored in yet.  Means the market may trade under for awhile (years) but eventually it should mega rally 50's early 60's style. That's my take.

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