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Stock dividends vs Gold dividends.

MGLICKERMGLICKER Posts: 7,995 ✭✭✭
in Precious Metals
With the S&P500 hitting record highs today, I took my weekly look and saw that dividend yields on that index are at a near record low of 1.87%. The only time it was lower was in the late nineties, before the dot com bust.

100 year average is above 4%.

Gold of course, pays no cash dividend. Holders are generally looking for price appreciation or in some cases, just a store of wealth.

So is this sub 2% dividend yield a worry, or can it drop to near zero for the hearty investor as long as equity prices keep rising, creating paper profit?

Comments

  • derrybderryb Posts: 36,824 ✭✭✭✭✭
    dividends are your reward for taking risk. Low dividend yield indicates that the market is saying risk is low. I disagree.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • MGLICKERMGLICKER Posts: 7,995 ✭✭✭
    To me, stock dividends are your annual payout as part owner of the company.

    If I invested $1,000,000 as a passive owner of an established restaurant, I would expect more than an $18,700 check each year.
  • cohodkcohodk Posts: 19,133 ✭✭✭✭✭
    So is this sub 2% dividend yield a worry, or can it drop to near zero for the hearty investor as long as equity prices keep rising, creating paper profit?


    Two things, a "paper profit" is like a paper loss? Just because its on paper doesnt mean you have it?

    And, compare the dividend yield to other yield bearing instruments. The sub-2% in 2000 was compared to 7% in treasuries. Today with treasuries yielding 3% the dividend yield is still very attractive.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • MGLICKERMGLICKER Posts: 7,995 ✭✭✭


    << <i>So is this sub 2% dividend yield a worry, or can it drop to near zero for the hearty investor as long as equity prices keep rising, creating paper profit?


    Two things, a "paper profit" is like a paper loss? Just because its on paper doesnt mean you have it?

    And, compare the dividend yield to other yield bearing instruments. The sub-2% in 2000 was compared to 7% in treasuries. Today with treasuries yielding 3% the dividend yield is still very attractive. >>



    Agree and agree. I suppose the bet is whether treasury yields will remain low.

  • derrybderryb Posts: 36,824 ✭✭✭✭✭


    << <i>I suppose the bet is whether treasury yields will remain low. >>


    Or if FED can keep it low.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

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