The last several years have been smooth sailing in the alignment of
real stock price growth and real dividend growth, but investors would do well to check which way the economic wind is blowing; it may be time to chart a different course to avoid a storm in the offing.
Not exact matches
The
real question behind NASDAQ 5,000 Version 2.0 is simple: what
price do you pay for
growth stocks versus the broader index.
At this point then yes
price appreciation is secondary bonus and we have an arguement of how and why
Real Estate can be better than
Growth Stocks in some scenarios and for some investors.
World
growth will remain low on average but negative in the UK and Europe;
price inflation will remain sufficiently subdued for a while longer so as to impose no constraint on monetary expansion; central banks will sustain a regime of negative
real interest rates and rapid monetary expansion; the risk of a eurozone collapse is off the table for now; finally,
stock markets should continue to perform better than expected, even though the four - year old cyclical bull market is long by historical standards.
So if you have one kind of
growth — booming financial fortunes in the
stock market, higher
real - estate
prices and more expensive means of living — then you are going to have slower
growth in the
real economy because money is diverted from peoples» pay - checks away from buying goods and services to just having to pay the banks.
Stock prices tend to rise during periods of inflation when more dollars are pouring into the markets, independent of
real economic
growth.
The practical implications of this risk /
growth trade - off, particularly for investors nearing retirement target dates or in the years just after the retirement target date, become
real with a sudden and significant drop in worldwide
stock prices.
In the extreme case, with a 20 %
stock allocation, (
real)
stock prices would have to drop in half by Year 20 in the absence of dividend
growth.
Unfortunately, that's often where the
real trouble, doubts & second - guessing begins... Some readers here may not realise I've been a GARP investor, off & on, throughout my entire investing career — think of any well - known
growth stock & there's a good chance I've bought it along the way, at the right
price.
As a result, while we're still seeing signs of an urban comeback in
real estate
prices, corporate relocation decisions and even population trends in some older cities with lots of housing
stock, most of the population
growth in the U.S. is again happening on the fringes of fast - growing metro areas in the South and West.
«Affluent households have greatly benefited from strong
growth in the
stock market in recent years, and the steady rise in home
prices has likely given them reassurance that
real estate remains an attractive long - term investment,» he said.
Regardless, there are many catalysts: a tight labor market, wage
growth picking up, a
stock market at or near record highs, housing values rising quickly, high commercial
real estate
prices, low cap rates and narrow credit spreads.