Bonds look very, very, expensive compared to stocks when focusing on their ability to generate income. Large Cap Stocks (the S&P 500) are now paying a higher dividend yield than the 10-year treasury. This is very unusual. Since 1990, the treasury note / S&P 500 Dividend yield ratio has averaged 2.4. As stocks have a track record of dividend growth and a treasury bond has a fixed coupon payment, it makes sense that stocks should generate less income than bonds. However, something right now is not right!
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I note that investment grade corporate bonds also have very low yields and have begun to behave like safe havens.