>The market seems to hate dividends and buybacks, preferring expansion or acquisition, but then what gives it value?
I've always thought of a stock as a claim on future dividends, but for most of a company's lifecycle they should have a better idea how to invest funds than returning them to shareholders. So ideally only mature large cap companies should pay dividends.
As far as valuations go, international stocks are far more attractive than US stocks right now.
Total US stock fund (VTI): 1.33% dividend yield, 25.1 P/E
Total international stock (VXUS): 2.94% dividend yield, 15.4 P/E
It's been my experience discussing with many US investors that they are loathe to hold any international stocks for a variety of reasons. Personally I think they will have their decade soon. The US market cannot continue eating the world market capitalization without commensurate outsized earnings growth to back it.
I've always thought of a stock as a claim on future dividends, but for most of a company's lifecycle they should have a better idea how to invest funds than returning them to shareholders. So ideally only mature large cap companies should pay dividends.
As far as valuations go, international stocks are far more attractive than US stocks right now.
Total US stock fund (VTI): 1.33% dividend yield, 25.1 P/E
Total international stock (VXUS): 2.94% dividend yield, 15.4 P/E
It's been my experience discussing with many US investors that they are loathe to hold any international stocks for a variety of reasons. Personally I think they will have their decade soon. The US market cannot continue eating the world market capitalization without commensurate outsized earnings growth to back it.