Wednesday, June 09, 2021 9:14:06 AM
AIM cash - a observation.
Looking at a 90/10 stock/cash style, some cash to buy pull-backs, replenish 10% cash after rebounds (a form of time cost averaging down the average cost of stock) and historically whilst 90/10 and all-stock tended to broadly compare in rewards, just looking at the price only values and it was predominately the higher return on cash compared to dividends that helped to close down the difference (somewhat align overall total returns).
7.7% cash interest, 4% dividend yields type differences historically.
In the present era with very low cash interest/rewards, 1.4% S&P500 dividend yield, near zero on 1 year treasury yields (1.6% on 10 year) and that differential/advantage has been lost.
Clive.
Looking at a 90/10 stock/cash style, some cash to buy pull-backs, replenish 10% cash after rebounds (a form of time cost averaging down the average cost of stock) and historically whilst 90/10 and all-stock tended to broadly compare in rewards, just looking at the price only values and it was predominately the higher return on cash compared to dividends that helped to close down the difference (somewhat align overall total returns).
7.7% cash interest, 4% dividend yields type differences historically.
In the present era with very low cash interest/rewards, 1.4% S&P500 dividend yield, near zero on 1 year treasury yields (1.6% on 10 year) and that differential/advantage has been lost.
Clive.
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