By "yield" here I mean the earnings yield, or earnings divided by price.
But if that happens, it would mean higher yield for investors willing to take on a little more risk in India.
As a final note, the historically narrow spread between high yield bonds and Triple-B corporates does not mean that the high yield asset class is materially overvalued.
Does this mean that high yield bonds are over-valued? (likely), that Treasury bonds are over-valued, since high yield bonds are priced as a spread above Treasuries? (very likely), and that high quality stocks in a universe of mostly overvalued liquid assets are relatively cheap? (likely).
FORBES: Stocks And Bonds: Distortions Are Surfacing In The Markets
For the stock market, returning to equilibrium could mean a cash dividend yield of around 4%, the average over 80 years.
Most students of economics are familiar with the Laffer curve, named by Dr. Art Laffer, which demonstrates how higher taxes do not necessarily mean a higher tax yield, with there being a point (the peak of his curve) after which total revenue falls when the tax rate increases.
High-yield does not mean necessarily putting money with a rinky-dink company stuck in Backwater, America.
Otherwise, the mean returns for high-yield and stocks were 7.48% and 4.17%, respectively, in the years of low economic growth.
Now, high-yield debt does not mean necessarily putting money with a rinky-dink company stuck in Backwater, USA. Some higher-profile companies exist in that spectrum, like Ford Motor, Sprint Nextel, United States Steel and Chesapeake Energy.
That said, subtler effects of climate change such as more sudden rains and particularly hot days with disproportionate effects on yield are left out, which might mean the study underestimates the effects.
High-yield outperformed stocks in 6 out of those 8 years, with a mean return of 3.88% versus -0.92% for equities.
Keep it boiling or agree to a settlement that will yield peace and increased prosperity for your people but to the now-aging militants might only mean the drudgery of performing the mundane duties of a real politician in a poor backwater.
Working in tandem may mean checking their monkish credentials at the door, but for these two masters, designing as a duo may yet yield even better results than going it alone.
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