09-23-2013, 04:19 PM
I've never been a fan of YOC. All it tells me is how much income I'm earning off of my initial investment. Well since making that initial investment the market has most likely gone up and I have quite a bit more capital. All I'm concerned about is current yield. How much income am I recieving compared to the current market value of the investment. I can then compare current yields across different investments to see if I may want to consider switching investments.
I don't want to get emotionally involved with a stock because I have a yield on cost of 10% while it's currently yeilding 3%. All that tells me is that I made a great decision to buy back when I bought it. Doesn't tell me anything about future prospects. I especially like to keep this in mind when thinking about my future portfolio.
I don't want to get emotionally involved with a stock because I have a yield on cost of 10% while it's currently yeilding 3%. All that tells me is that I made a great decision to buy back when I bought it. Doesn't tell me anything about future prospects. I especially like to keep this in mind when thinking about my future portfolio.