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High Dividend Yields Could Start Attracting Big Investors Back Into the Stock Market

High Dividend Yields Could Start Attracting Big Investors Back Into the Stock Market.  Major stock declines have raised dividend yields to levels investors haven’t seen in years. As as result, we believe, could be a trigger for some major institutions to return to the markets to buy high-yielding stocks that they perceive now have become oversold by the recent Corona-induced rush out of equities. Below is a  chart of earnings yield+dividend yield-treasuries starting to show value.

High Dividend Yields Could Start Attracting Big Investors Back Into the Stock  Market
High Dividend Yields Could Start Attracting Big Investors Back Into the Stock Market

The chart below from SentimenTrader shows that there haven’t been as many S&P 500 stocks with dividends of 5% or more since the 2008 financial crisis.

High Dividend Yields Could Start Attracting Big Investors Back Into the Stock  Market
High Dividend Yields Could Start Attracting Big Investors Back Into the Stock Market

The  chart below we created with  Adam Newar of Eden Capital shows the ratio of dividend yield to Treasuries is among the most attractive in 50 years. Something positive that could start to signaling a potential bottom as the  result of the recent major declines.

High Dividend Yields Could Start Attracting Big Investors Back Into the Stock  Market
High Dividend Yields Could Start Attracting Big Investors Back Into the Stock Market

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Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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