Seems a little high, doesn't it? We're so close to 5,000, we might as well get there as, clearly, the numbers are meaningless.  We've discussed how trading the S&P 500 at 40 x earnings is ridiculous but it's still happening so get used to the " new normal ", I guess.  Of course it all comes down to risk vs. reward and there's just as much RISK in a 10-year bond that pays you 1.666% as there is in a stock that pays a 3% dividend so of course buy the stock . See the multiples don't matter when the underlying returns don't match up.  Usually you can get 4-5% on bonds and they are considered very safe but, in a rising rate environment, the interest paid on the bonds may not keep up with inflation and you end up losing money – in steady Dollar terms.  Stocks, on the other hand, usually inflate with everything else so you keep up on the investment side and, if they are paying more dividends than a bond does interest – well then it's a pretty easy choice.   At PSW, we have a Dividend Portfolio   IN PROGRESS