Anybody know what to make of this?
The dividend yield of the SP 500 is a pretty good metric to indicate the return on capital investments in general.
The graph shows that historically the yield has fallen and fallen ... from around 5% at the beginning of the twentieth century to less than 2% these days.
That’s, now, a very low return and the trend is toward continued decrease ... toward a world of barely any return on capital investment.
This must have some signficant significance, but I don’t notice articles about it in the economics journals or the financial press.
Interest rates in Europe have gone negative. After ten years you get back less money than your original investment. Essentially, you’re giving the borrower money for the privilege of lending them money. WTF?
What if stock dividend yields continue to fall and then go negative … instead of them paying you for your investment, you’d pay them for the privilege. WTF?
Somebody please explain.