The Investor's Expected Return

In 1965 the investor could obtain about 41. 2% on high grade taxable bonds and 31. 4% on good tax-free bonds. The dividend return on leading common stocks, with the Dow Jones Industrial Average at 892, was only about 3.2%. This fact, and others, suggested caution. We implied that at normal levels of the market the investor should be able to obtain an initial dividend return of between 31. 2% and 41. 2%, giving a return from dividends and appreciation combined of about 71. 2% per year. Since 1964 has been the rise in interest rates on first-grade bonds to record high levels,. There has since been a considerable recovery from the lowest