26.03.2023 12:48:00

A Bull Market Is Coming: 3 Stocks to Buy With Dividend Yields Over 4%

The investing landscape has changed. Rising interest rates have pushed the value of a 10-year Treasury Note to 3.6%, which is more than double the average dividend yield of the S&P 500 (at 1.7%). A higher risk-free rate adds an opportunity cost to the stock market.The S&P 500 averages around a 10% return over the long term. However, there's a lot of variance involved in that average, including years of massive outperformance and 30%+ gains -- or steep sell-offs like we saw in 2022. The higher the risk-free rate (typically the rate of a treasury bond), the less incentive there is to invest in the stock market. For example, if the risk-free rate was 10%, it would make little sense for investors to be in stocks. One way to combat this opportunity cost is to invest in stocks that yield at least as much as a Treasury Note. That way, an investor can expect to get comparable passive income while still being invested in the stock market.Continue reading
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