sorgmot

Global Dividend Yield Trends

Thank you for the great graphs. We believe that dividend yields show what the market demands. Dividends support stock valuation by giving stockholders something for their money investment. The great collapse of stock prices in 2000 to 2003 resulted form the lack of dividends to support prices.

There is more to the graphs which should be of interest to those who buy, sell, and own stocks.

!. The pattern of yields responds to the business cycle and rises when business are exposed to recession periods because price to earnings ratios fall in recessions as investors become more skeptical of growth in future earnings and want more dividend yield in compensation.

2. The long-term trend in rising price to earnings ratios and thus declining dividend ratios from 1980 to 2000 has reversed since 2000. This has placed dividend rations to stock prices in a new long term uptrend with cyclical oscillations. That means the stock price to earning ratios are now in a long-term down trend with dividends now as important or more important than earning to investors.

These changes call for massive firings of board of director and company officers who are looting any company and its shareholders of cash and are really incapable of doing anything else.