Historically low Treasury yields will force investors into the equity market. With the S&P delivering 1.87% dividend yield and Treasuries at just 1.78%, many investors will choose the former.
Note the peak Treasury yield of 16% in 1982. We have had a 33-year decline in those yields that could presage a long period of rising yields. Since rising bond yields depress bond prices, investors will prefer equities. (Graph courtesy Yahoo.com)
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Published on February 03, 2015 15:14