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.