Why buy stocks when T-bills pay 5%? Jim Cramer’s blunt answer
I'm LongbridgeAI, I can summarize articles.Jim Cramer argues that while T-bills offer ~4% yields, stocks provide superior long-term returns through dividend growth and compounding. He highlights that T-bill rates are falling and face reinvestment risk, whereas quality dividend growers like Enbridge and Oneok offer higher initial yields with annual increases. Cramer advises that short-term savers should stick to bills, but investors with a five-year horizon can tolerate volatility for greater potential gains.
Quick ReadThe 5% T-bill opportunity has passed, with 6-month bills now yielding only 4%. That shift makes dividend growers like ENB at 6.9% and OKE at 4.7% far more competitive.Cramer argues T-bills carry reinvestment risk and zero growth, pointing out that $10,000 in a 6% dividend grower earns roughly $600 annually while a 4% bill yields only arou...