New to DGI

[Otter]

(02-04-2020, 12:36 PM)vbin Wrote:

(02-04-2020, 11:23 AM)Otter Wrote: I am not a fan of bonds. For anyone of the opinion that equity valuations are generally overstretched (I think so), they should be equally concerned about bonds. The bull market in bonds started in the early 1980s, and we are currently experiencing bond valuations that are unprecedented in the history of global bond markets. Reversion to mean will be a bloodbath if it ever occurs.

I share Warren Buffett's opinion on Gold. It is not an investment.

I also share his general view of buy and hold being the way to make and keep money. Pick solid dividend growth companies with decades of dividend raises under their belts, safe balance sheets, and buy them at a fair or better value, and you can get rich slowly while the magic of compounding does its work. It takes a certain mindset, and willingness to be patient, but anyone who stayed invested in a diversified basket of Dividend Kings and Dividend Aristocrats for the past 20-30 years is probably pretty pleased with their portfolio today.

Great that you mention bonds. Is bonds being all time high is the reason yields are all time low or are there other factors?

Yield on everything is depressed at the moment. Aside from the direct price/yield inverse relationship inherent in bonds, the abnormally low bond yield environment has likely triggered a substantial part of the gain in equities over the past decade. Starved of meaningful returns at the risk-free rate, investors have poured funds into the market, in a search for growth (and also yield on DGI stocks). 

Eventually the pendulum will swing the other way, as it always does. I suspect the unwinding of the current status quo could be very messy.