8/5/2024
By Charles Payne CEO & Principal Analyst

It wasn’t long ago when most companies felt the need to pay a dividend to be taken seriously, but that’s a long time ago.

When I was born, 100% of large-cap stocks paid dividends, and investors held an average of eight years.

The S&P 500 dividend yield has declined steadily from close to 14% during the Great Depression stretch of pressure to less than 1.5% today.

Dividends have lost their luster in the modern stock market, where the share price appreciation has dominated the total returns (and much of that usually has nothing to do with solid earnings).

In the aftermath of the Great Financial Crisis, money-pumping from the Federal Reserve and, more recently, the Federal government has led to the financialization of the economy and stock market.

Essentially, so much money is pouring in that stocks appreciate popularity as much as fundamentals. This has also stoked the wild gyrations, which have changed the characteristics of stocks.

When hot money moves, low-beta names suddenly start trading like high-beta stocks. See the recent Russell 2000 surge above its 50-day moving average (MA), which resulted in a record-shattering overbought read.

To read the full report, contact your account representative or email Info@wstreet.com.

Charles Payne
Wall Street Strategies

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