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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (59555)5/31/1999 10:36:00 PM
From: Elmer  Read Replies (1) of 132070
 
Hi Mike,
In one of Peter Lynch's books, he postulated a rule to sell all of your stocks when long bonds yield 6% more than the dividend yield on the S&P 500. This rule made sense when stocks carried a 3% or higher yield and bonds were 7 to 9%. Should this rule be adjusted or proportioned for the current circumstances? How about a new rule which says sell your stocks and buy bonds when the bond yield is three times the dividend yield? Is the gap what matters or is it the proportional difference?
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