11 March 2018, Sunday, 2.02pm Singapore Time
(Click on Technical Chart above to Expand)
In the new normal, i.e. the economic cycle of rising rates, risk-averse passive-income assets will continue to be dumped off for other interest yielding assets offered by banks and insurance companies. Their yields will start to close up against REITS, Trusts and Defensive Stocks. Risk assets will have to be loaded up massively. This is the cycle we are in now. It is too bad that not too many people know what they are doing and how the international economies and financial markets actually work.
What is the most sane approach of wanting safety yet not sacrificing dividend yields now?
Bank Stocks which offer high dividend yields is the most sane alternative choice to be made. Smart Monies worldwide will have this line of thought. Besides loading risk assets such as cyclicals and commodities, they will go for banks along with this path of thought.
Additional Side Note:
A lot of old folks, retirees and passive incomers will end up in pity state under this cycle of new disruption. Life of safe and easy money does not go on indefinitely forever. The disruption is here, and just the start.
Under this kind of cycle, passive income assets will lose their shine because all other assets see their yields thrash yields from reits, trusts and defensive dividend stocks. The yields from all other asset classes close up their gap in yields, and in The Donovan Norfolk Theory of Relativity, reits, trusts and defensive dividend stocks will keep losing their shine in this gap close-up, and keep being in selling pressure mode.
No smart money sane enough will not sell these away. Greatest fools are those who still linger thoughts of passive money under the old asset classes in the new normal of the new disruption. With 10-20 years of passive dividend brainwashing, it is going to be hard for these group of people to change their cult-like beliefs until they lose so much, finally wake up and staring at all the losses which dividends will hardly make up for.
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