Good discussion on the cost of QE and the danger of reaching for yield today

Edward Dempsey chief investment officer at Pension Partners talks with Aaron Task about the big costs of QE and why investors should still resist the Fed’s prod to buy dividend paying stocks today: “We are approaching zero yield,” he says. “It’s devastating on retirees, its devastating on pensions and endowments” – his main focus of investing. Many pundits, including Jim Cramer, have been pushing dividend-yielding blue chips as a wise investment for those looking for income in their portfolio.

But “I would be very uncomfortable placing my capital at risk for a 2 or 3% yield,” Dempsey says. As discussed in this previous clip, he’s worried the ‘summer crash’ isn’t over just yet.

In the meantime, savers will continue to be penalized until hopefully, the economy recovers to a point the Fed feels comfortable raising rates to forgotten “normal” levels of 1% or higher.