ThestrengthreductionFEM isapplied to the stabilityanalysisofslope. The basicprincipleofthismethod and the definition of safetyfactor, yieldruleandinstabilitycriterion are discussed.
When we decompose factors explaining the returns we find that the dividend yieldfactor actually contributed negative 1.02% annualized to the excess return.
Also, the average yield of DAX stocks is 3.5%, almost three times the yield on the 10-year German government benchmark bond, a factor that could persuade yield-hungry investors deterred by low returns on government bonds to switch from debt to equity.
The most important factor is that the yield on the 30-Year U.S. Treasury bond, which ended September at 2.913 versus 4.510 at the end of the first quarter and 4.377 at the end of the second quarter.