Sir_Lurksalot
Confused about dryer sheets
- Joined
- Sep 29, 2004
- Messages
- 7
I'm going to throw this out for fun. Hopefully we can all agree that the current dividend yield for the SP500 is near historical lows because of the dividend taxation that was created in 1986 rather than because of the economy being particularly poor for the last 18 years.
If the dividend tax were somehow eliminated in the future, one might think that the dividend yield would grow. I'll suggest that it could return to the 4% historical average. Is it surprising that number seems to match a "100%" SWR? It certainly makes sense to me that if you held 100% in stocks and could live fully on the dividends (tax free in this example) that you have it made.
I believe that these 2 numbers are not similar just by coincidence. I'll further state that I hope anyone who is interested in gaining an accurate gauge for a SWR would push elected officials to eliminate taxation of dividends to increase the correlation between SWR and dividend yield. Ok, I just want to have a SWR tax free.
Lurksalot
If the dividend tax were somehow eliminated in the future, one might think that the dividend yield would grow. I'll suggest that it could return to the 4% historical average. Is it surprising that number seems to match a "100%" SWR? It certainly makes sense to me that if you held 100% in stocks and could live fully on the dividends (tax free in this example) that you have it made.
I believe that these 2 numbers are not similar just by coincidence. I'll further state that I hope anyone who is interested in gaining an accurate gauge for a SWR would push elected officials to eliminate taxation of dividends to increase the correlation between SWR and dividend yield. Ok, I just want to have a SWR tax free.
Lurksalot