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Gold/Mining/Energy : Position Trading in Canada

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To: Ward Nicholson who wrote (1249)6/9/1999 8:23:00 AM
From: Graham Hickey  Read Replies (3) of 2259
 
Interest Rates and Yields

According to friend, a bond trader, he thinks the bond market has priced in two .25 hikes. I personally think we will only see one because of foreign market concerns. This said I still feel the US markets are over valued and we will see 9000 before we see 12000 on the DOW Ind.

One additional thing to keep in mind is: The Fed will not likely hike in the last quarter because of Y2K. They are printing additional funds which will counter any effects of a rate hike.

Dividend vs. Bond Yields

The two yields are not equal even after taxes. The reason is based on risk. A gov't bond will pay it yield. A equity can stop paying or reduce its dividend. Furthermore, the stock price can go down leaving you a negative return. Now, if the stock continues paying the dividend and the value of the stock remains stable then they would be equal.
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