Posted by Glenn on December 06, 1999 at 18:42:10:
I think it is the dividend divided by the price. This gives just the cash yield. Appreciation would be in addition to that. I would think that a better way to present to your sellar would be the figure that 80% of mutual funds, which are professionally managed (???) are outperformed by the S&P 500. So if he is inclined to invest in individual stocks, he would have to do as well as the top 20% to get the best yields. In addition, I would find a site which has historical data, and show him the market back starting in July 1997, when it really took a dip - point out to him that his investment in your arrangement is far less risky. Also, point out that the stock market is on its longest bull market in history, and that has got to end sometime within the term you are proposing (sooner not later).