The need for current income is also a factor in explaining the sudden popularity of large-company stocks. Dividends are an important component to overall return. Currently the Russell 1000 value ETF (IWD) boasts a dividend of 2.63%, 50 basis points larger than the small-cap Russell 2000 value offering (IWN). There are a number of large cap names that have dividends over 3%. This is much higher than can be earned at banks, and considering the Fed's stance on keeping rates low for the foreseeable future, this isn't likely to change.
Ben Warwick ([email protected]) is chief investment officer of Quantitative Equity Strategies LLC in Denver, and Memphis-based Sovereign Wealth Management, Inc.
See More of Ben Warwick's Portfolio Gourmet Blog Post
A Steady Course November 05, 2009 Even though stocks have dropped a bit lately, there are reasons to be a little more optimistic…. The Shirt on My Back October 19, 2009 Signs of deflation seem to be all around us. The Social Security Administration just announced that beneficiaries won't be getting a cost of living increase for the first time since COLAs were introduced in 1975. Inflation May be Inevitable… October 08, 2009 Among the factors for determining future allocation decisions is the most likely direction for inflation. We have noticed a number of investment firms launching new funds to profit from the inevitable return of high prices Inflation Paradox September 30, 2009 A little inflation is a good thing, because it shows that there is decent demand for products, and an economy that's nicely "humming along." Runaway inflation is not a good thing, however. …
Tandem Performance Puzzle September 25, 2009 Typically, stocks and bonds go in opposite directions, a tendency that has exhibited itself throughout most of 2009. But in the last four weeks, long-dated Treasuries have risen right alongside equities, as the pair has each notched a 6% gain….
The State of the Consumer September 22, 2009 There's some obvious trepidation out there among buyers, who would rather save than spend. But instead of money-market accounts (and their zero yields), it seems that most folks prefer to stash their savings in the stock and bond markets.
