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Ripple Effect

The Income Effect

Loading ...Addison Wiggin

September 11, 2025 • 1 minute, 44 second read


DividendsIncome

The Income Effect

Your investment returns come from just two sources.

The first is capital gains. As the AI bubble blows higher, that’s the big focus for investors.

That means the second source of returns is being overlooked.

What’s the second source? Income.

The dividend yield on the S&P 500 is a paltry 1.18% today, almost touching its 1999 low:

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Investors ignore income stocks at their own peril (Source: Multpl)

Dividend-paying stocks have a lot to offer investors. A company can restate its earnings – but they can’t restate a cash dividend.

Plus, dividend growth companies tend to offer lower beta, or volatility relative to the market itself.

Finally, as Jeremy Siegel has documented in Stocks for the Long Run, over an investor’s lifetime, reinvesting dividends can account for over half of an investor’s total returns.

With the growing likelihood of a terrifying bull market in stocks kicking off, investors can get a relative safe-haven with dividend-paying stocks.

With the Fed about to slash interest rates, dividends may soon be the best game in town for income investors.

Even with overall yields looking low, there are plenty of companies that still offer decent yields and the potential to grow their dividend over time. We have plenty of such holdings in our Model Portfolio.

~ Addison

P.S.: Grey Swan Live! this afternoon at 2 pm ET: Mark Jeftovic joins us for “Shadow Fed & the American Dream” — how a September rate cut could hit the dollar’s purchasing power, where the money-market flood might go next, and why “control of money” is migrating from central banks to code, corporates, and courts.

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No doubt, we’ll touch on the claims made by Anton Kobyakov, senior adviser to Russian President Vladimir Putin, that the U.S. is using stablecoins to devalue its debt. Paid members, join us at 2 p.m. ET today.

If you’re not a paid member of the Grey Swan Investment Fraternity, you can review the benefits of becoming one here.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.


Dan Denning: The Hollow Class, Part I

November 11, 2025 • Addison Wiggin

A 50-year mortgage doesn’t make housing cheaper. But by stretching the repayment period over time, it DOES lower the monthly payment on your principal. That lowers the percentage of your total income you’re spending on repayment. And in a strange way, it makes sense.

With a fixed rate mortgage and inflation running in the high upper digits, the real value you of your total debt goes down over time (inflation pays off your loan, as long as your income rises faster in nominal terms). Of course you pay off a lot more interest over 50 years than 30 years. And it takes a lot longer to build up equity (assuming also that house prices don’t fall).

Dan Denning: The Hollow Class, Part I
An Armistice of Convenience

November 11, 2025 • Addison Wiggin

Last night’s 60–40 Senate vote shoved the government back toward “on.” There’s apparently a shutdown truce… for now.

A bloc of Democrats “crossed the aisle” after weeks of getting nowhere on health-care demands. “We had no path forward… and SNAP beneficiaries were losing benefits,” Sen. Tim Kaine, one of the 7 who conveniently aren’t up for reelection, said.

The new deal funds Washington only through January, tacks on three bills to keep parts of Defense, Ag, and the Capitol complex humming through 2026, reverses shutdown-era RIFs, and restores back pay.

The House is next; the president says he’ll sign it fast when it gets to the Oval Office.

An Armistice of Convenience
The Quality Stocks Index Is A Screaming Buy… For The Long Haul

November 11, 2025 • Addison Wiggin

The S&P 500 Quality Index ranks companies not by market cap or a compelling AI story, but rather by fundamentals. Earnings, profit margins, and financial leverage. Reasonable debt.

You know, the kind of stuff that makes your eyes glaze over. And the type of companies we like to hold for the long haul in our model portfolio.

The Quality Stocks Index Is A Screaming Buy… For The Long Haul
Barry Brownstein: Economics of Gratitude: What New Yorkers Forgot About Prosperity

November 10, 2025 • Addison Wiggin

If I were to sum up the mindset of New Yorkers who elected Zohran Mamdani as mayor of New York City, it would be We want something for nothing, and we want the rich to pay for it. Instead, they will get nothing for something, and they will pay for it with a degraded quality of life.

Mamdani’s victory was paved with ingratitude for the blessings New Yorkers receive daily. The mindset demanding “something for nothing” from society is not just a political phenomenon, but a profound lapse in economic understanding and moral character.

Barry Brownstein: Economics of Gratitude: What New Yorkers Forgot About Prosperity