Equities offer the best returns over the long-term over other asset classes. For instance, stocks can yield inflation-beating returns. There are very few asset types that can yield returns that beat inflation. The chart below shows the long-term global GDP growth and the performance of various asset types. Stocks easily beat cash and bonds over the …
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The average tenure of a company in the S&P 500 index has been on a decline for many years now. According to one research report, the average tenure is under 20 years now. So a S&P 500 company today may not exist in the index or even disappear completely within the next 20 years. Click …
Continue reading ‘On the Impact of the Declining Average Tenure of a Company in the S&P 500 Index’ »
Japan and the US have the lowest dividend yields relative to other major developed markets. The chart below shows the dividend yields by region from 1997 thru 2016: Click to enlarge Source: An analysis of dividend-oriented equity strategies, Vanguard
Diversification across sectors is important for well-diversified portfolio. No sector is the best performer each year. So this year’s best performing sector may turn out to the worst one next year. For example, the tech sector is the hottest one this year with soaring stock prices especially for the FANG stocks. Next year they may …
Continue reading ‘US Equity Sector Returns By Year: 2007 To 2016’ »
The US equity market is currently in a secular bull market. In a secular bull market stocks keep going up and up until the party ends. Secular bull markets are of course followed by secular bear markets where stocks go nowhere for years. For instance, the first decade of the 21st century was “The Lost …
Continue reading ‘Total Returns During US Equity Secular Bull and Bear Markets Since 1877’ »