Is This the Story of the Century for Investors?

Following the financial crisis in 2008, central banks around the world responded by cutting interest rates to 0% or even lower. That resulted in the cry of “TINA, TINA, TINA!” by stock brokers everywhere – “There Is No Alternative” to buying stocks, they cried out.

But times have changed.

Tadas Viskanta of the financial blog ‘Abnormal Returns’ says the following chart tells “the most important story of the century.” Tadas notes that yields on some U.S. cash and cash-like instruments have now risen above the dividend-yield for the S&P 500. The effect may be that the demand for U.S. stocks will fade as the Federal Reserve continues to hike rates, since, for the first time since 2009, there is an alternative to stocks.

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Markets Were Rattled Last Week

The market hates surprises, especially when the surprise comes from a central bank. Last week, the European Central Bank (ECB) unexpectedly reversed course and took a more accommodative stance on monetary policy in an effort to encourage stronger European economic growth. Tom Fairless of Barron’s explained: “Officials are seeking to shore up an economy that has been rattled by shocks ranging from a slowdown in China to mass protests in France and bottlenecks in Germany’s crucial auto industry. They are threading a careful path between providing sufficient support for the region’s softening economy while avoiding any appearance of panic, which could ricochet through financial markets.” The Eurozone isn’t the only region feeling the pinch of weaker economic growth. China’s exports were down more than 20 percent in February, reported Investing.com . Analysts had expected a decline of about 5 percent. Concerns about the health of China’s economy have been growing since the p

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