A.I.M. Users Bulletin Board

[ls7550]

This next graph shows year end values, excepting for 2009 which shows the most recent dividend yield level



which shows that we're getting down to historical high yields (low prices), but yields can go much higher in some cases.

This next chart shows the buy opportunities arising when the market yield was at or above the long term average.



There's clearly some long intervals between such opportunities, as reflected in this next chart



Buying and selling at around the long term average yield level will result in a total return of around the long term average (6.5% capital gain, 4.5% yield). Buying at a relatively lower yield level (higher price) will result in below average longer term returns - with both lower capital gain and dividend income benefits.

Buying at relatively high yields and selling at relativey low yields is best as both capital gains and income benefits tend to be above the longer term average level.

Rejoice (unless you're forced to have to sell stock at current relative lows) as any purchases at around current price levels are likely to provide a good longer term investment return. Just make sure that what you do buy is likely to survive the current storm (Indexes/ETF's are a good choice).

Clive