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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Income Stocks vs. Bonds: It's Not About Growth, It's About Valuation |
Seeking Alpha - July 6, 2011 - By David Goldman
Except for the accursed financials, today’s market seems to have shrugged off a Portugal debt downgrade and a Chinese rate increase. That is because the issue isn’t growth, but valuation.
Let’s walk through this again: much too much attention is paid to overall economic growth, and much too little to the valuation of securities. Corporate bonds are stupid rich, with the Merrill Lynch/B of A investment-grade index yielding barely over 4%, as I explained in a recent post, large-cap borrowers can get money at the nominal GDP growth rate, with an extremely low risk premium (around 100 bps above the 10-year Treasury yield). The market is assigning extremely low risk to corporate outcomes, at least in the large-cap world, and providing money very cheaply. Now, if a corporation can earn more than the GDP growth rate, and can refinance its existing debts at lower rates, why not own the stock rather than the bond? There are plenty of large electric and gas utilities paying dividends in the 5% range who fit this description, and they have a pretty steady record of dividend growth; if electric-utility dividends grow at 7% a year as in the past, you double in ten years. Even if dividend growth simply matches the nominal GDP growth rate, you do better. And if you’re investing in a taxable account, you pay a 15% top dividend tax rate.
The issue, to be sure, is risk: in a true deflation, where the economy crashes and dividends with them, bonds outperform, and if a particularly company or sector gets clobbered for whatever reason, bonds may do better than equity (which is why I own bank preferred, but not common, stock). But solid large-caps with predictable cash flows are unlikely to sustain big dividend cuts over time (and if things get so bad that they do, corporate bonds will lose value as well).
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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