Goldman Sachs: Buy Dividend Stocks

A super-bullish report from Goldman Sachs (NYSE:GS) analysts called “The Long Good Buy; the Case for Equities” is out today. It’s over 40 pages and has some heady stuff in there, but most importantly it makes the argument that stocks — particularly big dividend payers — are super cheap relative to bonds. That means long-term investors looking 10 or 20 years down the road should jump into dividend payers immediately, and not look back.

In the early 20th century, the stock market was largely viewed as a volatile asset class that underperformed bonds, and thus was not very seriously seen as an investable opportunity for most. Institutions shunned stocks, even those with tremendous dividends, and chased lower-yield in bonds because of the stability. It was a bull market for bonds. As decades passed, institutions slowly warmed up to the idea of taking on the risk of the equities market. The money started to flood into stocks and mutual funds — pushing equities higher, but driving down dividend yields in equities.

Source: InvestorPlace

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