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Fixed Income Update

U.S. bond yields have fallen below U.S. stock yields. As of January 31, the S&P 500 yielded 1.97% versus a 1.92% yield for the Barclays Capital U.S. Aggregate Bond Index.

An inversion of stock and bond yields is rare over the past 50 years. The implication is that yield-seeking investors must increasingly depend on the entirety of their portfolio to generate income, stocks included.

Long-term investors should consider the power of dividend growth. Dividends paid by S&P 500 companies have grown at a 14.3% per annum pace over the past five years. Accordingly, investing in stocks today could mean a higher income stream in the future.


DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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