Over Taxation For U.S. Investors
U.S. investors may be charged more in dividends.
U.S. investors may be charged more in dividends. Bush’s program features and promoted Obama now to be extended another two years has included in it and maintain a 15% tax on dividends obtained from issuers according to their financial results. If this program will not be approved by the Congress then the dividend tax could reach 40%.
So we still have an influence factor included in the program and which may exacerbate or depreciation of share prices on Wall Street. You probably know it or not, but the average return earned from dividends is about 1.5-2% for U.S. companies in 2009. I’ll give an example taken from the Reuters site for the U.S. company General Electric. Dividend Yield: 2.88 GE / industrial 0.99 / 1.26 for the technological sector / 1.65 for the S & P 500. For the past five years its average is: Dividend Yield – 5 Year Avg. 3.51 / 1.11 / 1.17 / 2.47, similar to that noted above. We can imagine what it means for a U.S. investor an over taxation from 15% to 40% of the value of the dividend.
U.S. government bonds market in the long term by 9.4% in free fall
Perhaps you’ve noticed that the U.S. bond market falls over time based on Fed announcement regarding the acquisition of a new state bond package program called QE2. This motion must be correlated with fears about the U.S. budget deficit, which has become more difficult to control. Such funds, long-term government bonds have lost 9.4% since mid-September and so far, and they have awakened investors.
By the end of November, investors have put about. 268.4 billion U.S. dollars resulted in fixed-income mutual funds, while stock funds brought in only $ 309 billion, according to the data compiled by the Institute of Investment. The institute says that investors have withdrawn money from U.S. stock funds in the last seven months. This trend has kept the same after the 2008 bankruptcy of Lehman Brothers and the withdrawn amount is 243 billion dollars. Instead, at this time (2008-2009) they added 404 billion dollars in bond funds.
If we look at the history of evolution of state bonds for 30 years the U.S. government will see that the maximum yield of 4.9% since 2007 it has increasingly fallen to the level reaching 4.40% Thursday after a drop of 1.3%, i.e. 0.06 point base against the previous day. In the last two days, 8 and 9 December, earlier rather large losses were reduced due to the expansion announcement during Bush’s tax incentives, which may have an influence on reducing the fear of inflation and budget deficit.
So the interest returned on time, especially this week as the yield on 10-year state bonds rose to 3.33%, an increase of 40 point from the first day of the week, on Monday. Shortly before Wednesday return to the same class of bonds was 3.27% up from 3.17% achieved on Tuesday and on Thursday it fell again by 1.62% reaching 3.22. Simultaneously the 30-year bond yield rose to 4.37% on Tuesday and then to 4.46% on Wednesday. But Thursday I noticed a new drop on this market.
Nothing changed from the days of this month just something the U.S. labor market data to give even a slight reversal of stock markets, but not lasting. Rally continues December’s easy to make but unspectacular without trouble. Fears of the sovereign debt crisis are going to deepen, and according to new data this might include Belgium and Italy. So standby.
