> Bond yields should be less than S&P dividend rates No. Stocks don’t necessarily pay out any dividends at all, like google or amazon. Stocks can also give su

> Bond yields should be less than S&P dividend rates No. Stocks don’t necessarily pay out any dividends at all, like google or amazon. Stocks can also give substantial capital gains. Bonds have historically had higher yields than the dividend yield of the S&P to entice people to purchase them to compete with this fact. While they have a higher chance of getting your principal back they also have to compete with other assets for the money. This is why bond yields typically go up during “good” times as people feel the stock market is a better place, but the yields then go down (for “safer” bonds at least, like the federal government or high rated corporations) as people flock to safety and the demand means they can pay out less. This is news because it’s another indication that people are flocking to “safety” causing both the bond yields to go down due to demand, and the stock yields to go up as their prices fall.