Investing

Is The Shine Wearing Off?

Courtesy of the WSJ’s Daily Shot, below is a chart depicting the spread between the S&P 500 dividend yield and the 1-month US T-bill yield. Per the chart, it would appear holding cash is becoming increasingly more attractive on a relative yield basis. If yield were the only reason investors held stocks then this would be a potential concern. However, growth is one of the primary reasons investors hold stocks. With healthy earnings growth expectations and solid economic growth, it’s hard to believe cash will win out over stocks any time soon, all else equal.