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Some of those S&P 500 dividends are not safe. GM, for example, is dropping their $ .25 dividend. This apparent high yield is transitory.

Rob Weigand

And the 1-year trailing P/E has been steadily declining during the decade. Risk and expected returns are gradually getting back in line following the 1990s equity bubble. The commodities, real estate and global equities bubbles have prolonged this process by creating transitory wealth. But with a trailing P/E of 20 on the S&P 500 and a dividend yield of less than 2.5%, we still have a way to go before the expected return on stocks fully reflects all the risk out there. During previous bear markets the market P/E would fall to 8-12. So this "bear" has not fully re-set expected returns to exciting levels yet.

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