What to Buy Now for the Stock Market May Have Found a Bottom
Phil DeAngelo | Oct 22, 2014 06:42PM ET
The stock market may be forming a bottom after selling off between September and early October. A buy signal might have fired when 10-year Treasury yields hit October 15 an intraday low of 1.86% -- a yield lower than the S&P 500’s dividend yield of 2.1%. In an ultra-low rate environment, the S&P offers more potential for long-term capital appreciation on addition to a competitive income distribution. It's no wonder that stocks rebounded sharply from their intraday lows since that day. The benchmark 10-Year Treasury yield has managed to rebound back above 2%.
The stock market is more attractive than risk-free investments because bond yields are hardly outrunning CNN's Fear & Greed Index , has shown "extreme fear" in the stock market for a month, which means contrarian investors should be brave and nibble at shares.
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