DJIA Yield Profile: March 12, 2020

This bear market has taken everything in its path down. Unless you are shorting the market, there is nowhere to hide. Perhaps the most scary thing is that this downturn is probably far from over.

The rate of change for new cases for COVID-19 continue to rise and even accelerate. Until we see a deceleration in the total cases for the US, the market will continue to fall.

The first chart comes from worldometers.info which we believe has better data than WHO (data from WHO shows 0 new cases over the past weekend).

COVID19_ActiveCase_03.12.2020

Despite the bad news, we are persistent in keeping our focus on long-term investment opportunities. If and when this is behind us, there will be tremendous opportunity to purchase blue-chip companies that will provide you with higher than average income. Take the Dow Jones Industrial as example.

Based on the close of March 12, 2020, the dividend yield reached 3%. Contrast that with 10-year T-Bill which fell below 1%. The risk-premium on the Dow (based on yield) spike to 2%.

This is not an indication that a bottom is here or even near. However, from an investment perspective, investing $10,000 today in the Dow seems like a better bet than a bond that will mature in 2030.

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This too shall pass and we can't wait until then. Please take care of yourself and those around you.

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