REITs
Robert Shiller Yale University |
It should come as no surprise that the man who wrote Irrational Exuberance is still somewhat bearish on the stock market. It might be even less of a surprise that Robert Shiller, the Yale University economics professor who deconstructed the late-1990s boom, is still stressing the need to diversify, diversify, diversify. One major asset class he says people too often ignore is real estate. Shiller recommends buying REITs (real estate investment trusts), which pay out over 90 percent of their profits in dividends. "It's a big class, and it should be a major part of people's portfolios." |
iShares DJ Select Index Fund
Jeremy Siegel Wharton School of Business |
Siegel's 1994 tome, Stocks for the Long Run, is considered a seminal work on the history of the market. So what does he say about market conditions today? First, the good news: The S&P 500, even after its 21 percent rise this year, is reasonably priced, Siegel says. Excluding technology, "it might even be a little cheap." What's more, that stocks will best bonds over the next ten years is a "slam dunk." But that doesn't mean there aren't clouds on the horizon. "The biggest threat to the stock market is higher interest rates," Siegel says. He also sees certain emerging markets outpacing domestic stocks. For investors looking to put money into U.S. equities, Siegel suggests investing in high-quality, dividend-paying stocks that will get a boost from the dividend tax cut. One way to load up on those dividend-rich names, Siegel says, is the new iShares Dow Jones Select Dividend Index fund (DVY, $52), which invests in 50 of the top dividend-paying stocks and currently has a 4% yield. |
