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"Investors need to understand the growing risks of overplaying the defense card," writes...

Friday, October 19, 2012, 9:10 AM ET
"Investors need to understand the growing risks of overplaying the defense card," writes AllianceBernstein's Joe Paul, exploring whether high-yield stocks are in bubble territory. It's not news they're expensive compared to past metrics, but high-yielders now make up a record 44% of the S&P 500 (on a cap-weighted basis). "As a countermeasure, (investors) may want to add more cyclical, deeper-value names."

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minor Comments (184)

Paul defines high-yield as 20% more than the index, which means high-yield is about 2.5%. Not exactly what many investors focusing on dividends would view as high-yield. In fact, many of us have a 3.0% minimum requirement.

19 Oct 2012, 10:55 AM Reply Like

gcmagone Comments (818)

My rock bottom acceptable yield is 4.5%. That's really about break-even considering inflation and tax.

19 Oct 2012, 02:03 PM Reply Like

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