For conservative investors, one of the safest ways to invest in the stock market is to buy stocks when the SPDR S&P 500 ETF (SPY) dividend yield is greater than the 10 year treasure yield, and sell when the trend reversed. The following table shows that there were 7 such opportunities after the great recession and the average annualized return was 19.7%, if you followed this strategy.
Date | S&P 500 | Dividend | Treasury | Months | Total Return | Annualized Return |
11/21/16 | 2,191 | 2.05% | 2.33% | 10 | 14.2% | 17.0% |
01/01/16 | 1,919 | 2.11% | 2.09% | |||
11/01/15 | 2,081 | 2.11% | 2.26% | 1 | 2.8% | 33.1% |
10/01/15 | 2,025 | 2.19% | 2.07% | |||
05/01/15 | 2,112 | 1.96% | 2.20% | 1 | 0.8% | 9.8% |
04/01/15 | 2,095 | 1.96% | 1.93% | |||
03/01/15 | 2,080 | 1.94% | 2.04% | 2 | 2.6% | 15.3% |
01/01/15 | 2,028 | 1.92% | 1.88% | |||
06/01/13 | 1,619 | 2.01% | 2.30% | 13 | 20.7% | 19.1% |
05/01/12 | 1,341 | 2.00% | 1.80% | |||
03/01/12 | 1,389 | 2.00% | 2.18% | 6 | 18.3% | 36.7% |