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"a virtual fountain of cash"

David_Snowball
in Fund Discussions
The Leuthold Group's "chart of the week" showed the gap between the S&P 500 yield and the 10-year Treasury yield. The S&P has outyielded 10-year Treasuries five times: approximately 1957, 2009, 2012, 2016, 2020.
Chart 1 documents the spread between the S&P 500 dividend yield and the 10-year Treasury yield since the S&P was launched in 1957. As of March 12th, the S&P 500’s yield exceeded the 10-year Treasury by a record 1.64%; a virtual fountain of cash in an era starved of current income.
And yes, I think they were smirking when they typed the "virtual fountain" description.

David

Comments

  • LewisBraham
    Yet the difference between a dividend which is a choice a company can eliminate at a moment's notice and a bond coupon payment which if stopped a company or, worse in this case, the U.S. government is bankrupt is light years.
  • MarkMark
    edited March 2020
    Correct Lewis but that presumes that investors are able to look long-term. However in many cases they just want the income and are unconcerned with the safety of same within reasonable limits. As for me, I only play with the heavy hitters who have lasted but I am always, always watchful.
  • davidrmorandavidrmoran
    this seems bizarrely dire, from JPM:

    https://www.thebalance.com/u-s-gdp-growth-3306008
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