O’Shaughnessy Asset Management examines why the post crisis investing landscape created the toughest income generating environment in 140 years. It argues traditional income sources face structural headwinds while global dividend paying equities offer an overlooked alternative. A 60/40 portfolio yield fell from a 140 year average of 4.4% to just 2.0%.
Expanding Horizons: The Most Difficult Environment for Generating Income in 140 Years
O’Shaughnessy Asset Management
Ehren Stanhope, Travis Fairchild
Article
1 Pages
Key Takeaways
Historic Yield Collapse: A traditional 60/40 portfolio yielded just 2.0% at the end of 2012 versus a 140 year average of 4.4%, highlighting the challenge of generating income.
Global Dividend Opportunity: Europe traded at a 14% CAPE discount to the U.S. while offering an indicated dividend yield roughly 60% higher, suggesting attractive relative value.
Global Revenue Shift: 46% of S&P 500 revenues came from outside the United States in 2011, reinforcing the case for expanding beyond domestic dividend stocks.
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