The S&P 500 dividend yield of 2.13% exceeds the 1.95% yield on the 10-year note. On a quarter-end basis, this has happened only 20 times since 1953. The following 12 months, the S&P 500 rose by an average 20%.
The past doesn't always repeat itself, and this bond market is heavily influenced by government purchases. However, this may be a good time to buy stocks.
The past doesn't always repeat itself, and this bond market is heavily influenced by government purchases. However, this may be a good time to buy stocks.
2 comments:
Thanks Mrs. Weir for your insights,
I really appreciate them. I would like to know your take on this post by contrarian Mr. Mark Hulbert:
http://www.marketwatch.com/story/fed-model-more-bullish-than-in-decades-2011-09-20?siteid=rss&utm_source=tf
Thanks again
Fancisco,
Thank you for asking this important question.
The Fed model depends on forcast earnings for the S&P 500 Index. These estimated earnings are divided by the price of the index and compared the the yield on the US 10-yr. note.
Mr. Hulbert feels that the Fed model is often wrong.
My view is that forecast earnings are often wrong and, therefore, may compromise the Fed model.
Thanks for asking,
Deb
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