Trading The SP500 | Bull and Bear Markets | Walker Market Letter
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| Below is the SP500 dividend yield since 1942. The long term downward trend is obvious. |
| Below we adjusted the SP500 dividend yield for the 30 year Treasury Bond return. I.E., this is the SP500 yield divided by 30 year Tbond return. You can't look at yield in a vacuum, it must be compared to alternative investment vehicles. You can see that adjusted for interest rates, the downward trend is even more impressive. |
| Below is the unadjusted dividend yield vs the percentage return of the SP500 for the next six months. In other words, for each point in time we looked at how the SP500 performed over the next 6 months. We then plotted the dividend yield along with that return. |
| This is the dividend yield adjusted for the 30 year bond return (as in the second chart above) vs the percentage return of the SP500 for the next six months. It appears that a low yield does not correlate to returns very well, but there does appear to be some correlation to volatility. In other words, low dividend yield might equate with higher volatility. Bear in mind that this is just an observation, not a scientific study. And there are no doubt other factors at play. |
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Trading The SP500 | Bull and Bear Markets | Walker Market Letter
Published by Lowrisk Market Analytics.
Copyright © 1996-2005 Jeff Walker. All rights
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