Much has been said lately about a great shift of investor assets that has seen billions of dollars rotating from bonds into stocks. So pronounced is this wave of money that it is consistently cited as one of the key reasons why markets have been able to defy all sorts of threats and obstacles and surge to all-time highs. While it may still be too early to call the end of a 30-year bull market in bonds, the demand for reasonable alternatives is real.
"There's kind of a low-yield burnout from a lot of our clients," says Ted Parrish, the principal and director of investments at Henssler Financial in the attached video. "They're tired of sitting around in bonds that are paying nothing, and they're stepping up to the plate and buying income-oriented stocks that pay a good dividend and give them some upside potential."
For him, the case to "go big," so to speak, is easy. Not only are large-caps 25% cheaper than small and mid-caps, but he says their dividend yield is at a 10-year high and rising, their balance sheets are strong and flush with cash, earnings are growing, and they're able to boost growth via exposure to emerging markets.
"When we look at the overall investment setting, we look at valuations and we think that the large-cap space is still about the cheapest sector of the market," Parrish says, acknowledging that this most conspicuous part of the equity universe may seem boring to some, but its total return potential (growth + income) is second to none.