Sell your Bonds and Gold and Buy Dividend Stocks

The use of gold as a medium of monetary exchange spans the entire history of mankind and is even prominently mentioned in the Bible. Consequently, there is no question that mankind has always valued gold. However, the real question is what is the proper intrinsic value of this coveted element? When attempting to answer this question, consideration needs to be given to the fact that gold, unlike a stock or bond, does not pay income. Therefore, gold's future value and return potential must come from appreciation in its price. Of course, this implies the need to buy low in order to sell high.

Since the S&P 500 represents the average, and we endeavor to be better than average, we have screened the universe in order to compile a list of high quality companies offering a dividend yield greater than 3%. Moreover, each election had to have increased their dividends every year for at least 15 years and possess high financial strength ratings. Consequently, each of these selections offers an entry yield greater than the 10-year Treasury bond and most of them offer an entry yield this is remarkably greater than even the 30-year Treasury bond. As the first graph in this section, courtesy of Bloomberg, suggests, quality stocks with reliable earnings are very cheap today.

Source: Safe Haven

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