Simple Arithmetic

Stocks VS Bonds

The arithmetic is now overwhelming for long term investment grade corporate bonds outperforming stocks over the next 10 to 15 years.  

Even if stocks remain at their nose bleed valuations the dividend yield for the S&P 500 is so tiny at 1.15% - growing at historical 5.4% per year - it would take approximately 16 years and 9 months (or about 201 months) for the dividend investment to catch up to the fixed 5.5% quarterly compounded return. 

This is assuming the principal and growth remain constant and the 1.15% is the starting annual dividend yield and 5.4% is the annual dividend growth rate.  That is exactly where we are today!

DYI