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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (5945)	7/14/1998 9:32:00 PM
From: wooden ships	Read Replies (1) \| Respond to of 42834

"The conditions long ago were quite a bit different than now, as bonds currently yield about three times as much as stocks." I2, interesting points. It is certainly true that the 30 year US Treasury bond has had a relatively brief history and that overall US interest rates were significantly lower in times past. Times have certainly changed, as you suggest, with re- spect to the importance (and value) of dividends. It would seem that as long as dividends are counted as ordinary in- come and there exists a chasm of difference between federal income tax rates(39.6% maximum) and long term capital gain rates (20% maximum), corporations and their shareholders may continue to favor appreciation in stock prices to the exclusion of hefty dividend increases. If the Republicans succeed in low- ering the maximum long term capital gains rate to a proposed 15%, that divergence will be even more greatly magnified.