DYI SPECIAL UPDATE:
The S&P 500 dividend yield that is the investment portion
as opposed to the speculative component for the S&P 500 Shiller PE is at
dismal 1.03%! Compared to Vanguard
Long-Term Corporate Bond ETF symbol VCLT yielding 5.86%. The dividend yield is now only 18% obtained from
investment quality long term corporate bonds.
Today’s investors IMO are now speculating for an ever
expanding PE multiple to fuel acceptable returns going forward. To out compound bonds at this time dividend
increases will have to significantly surpass the average historical growth rate
of 5.4%, an unlikely possibility due to a slowing economy plus Wall Streets
current aversion to dividends.
Over the next 10 years IMO long term investment quality corporate bonds will outperform the S&P 500 index. The S&P 500 dividend yield is now so low it is the anchor slowing future returns for this index.
