Mr. Market, When is 0.89% not enough?
Mr. Market is always enamored with the wrong security. Right now, the five year Treasury Bond is yielding 0.89%. As a comparison, I looked at Valueline's latest 2014 to 2016 Target Price Range for each of the 30 stocks making up the Dow Jones Industrial Average. What I found was there was one company estimated to trade between 200% to over 300% higher than it is trading at today over the next five years. The worst estimated price range for a stock in the Dow Jones Industrial Average as estimated by Valueline's provide a return of between 18% to over 40%. The average estimated return for all of the Dow Jones based on Valueline's Target Price Range for the next five years is between 70% and to over 130%!!!
I realize all of this is just one research firm's estimates, but when does the potential reward warrant the risk? Mr. Market's 0.89% for 5-year Treasury Bonds or Blue Chip stocks od the Dow Jones, which by the way none of the return estimates includes dividends.
Mr. Market, It is going to be okay. So take the less risky option on Dow Jones like stocks over that grossly over priced momentum played Treasury Bond!!! For once you owe it to yourself to get it right!!!
Happy Investing to You All. Even Mr. market!