The S&P 500 is the most widely cited single gauge of large-cap equities on U.S. stock exchanges. Standard & Poor’s estimates that more than $7.8 trillion is benchmarked to the index, making it one of the most influential figures in the world of finance. To be included, a company must be publicly traded in the United States and report a market capitalization of $5.3 billion or greater.

According to Mike Maloney, the S&P 500 Dividend Yield is the second-best way to measure a market value (after the Price Earnings Ratio).

The dividend yield indicates how much a company pays out in dividends each year relative to its share price. In other words, it measures how much “bang for your buck” you are getting from dividends.

In the absence of any capital gains, the dividend yield is effectively the return on investment for a stock. The lower the dividend yield, the less you get for your investment, and hence the more overvalued a stock.

The historic S&P 500 Dividend Yields were deducted by Robert Shiller and published in his book Irrational Exuberance.

S&P 500 Dividend Yield

As you can clearly see in the chart, The S&P 500 Dividend Yield Is Screaming and telling you that it is well into bubble territory and will eventually correct. When it does correct or crash, will you be prepared or warned, or will you just go down with the markets?

 

 

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