The value stocks of United States has current yield of about 2.50%. I am using the Vanguard Value Index (Symbol: VIVAX) as proxy for the value stocks of US. The historical dividend growth in the US has been around 5% for the last 50+ years.
The following table lays out the expected income generated by the long bond and the value stocks for the next 30 years. In each case, a $10,000 initial investment is assumed. For each year the income generated by value stocks and long bond is displayed in a row.
| Year | Value Stocks Yield | Value Stocks Income | Long Bond Yield | Long Bond Income |
| 2005 | 2.50% | $250.00 | 4.24% | $424.00 |
| 2006 | 2.63% | $262.50. | 4.24% | $424.00 |
| 2007 | 2.76% | $275.63 | 4.24% | $424.00 |
| 2008 | 2.89% | $289.41 | 4.24% | $424.00 |
| 2009 | 3.04% | $303.88 | 4.24% | $424.00 |
| 2010 | 3.19% | $319.07 | 4.24% | $424.00 |
| 2011 | 3.35% | $335.02 | 4.24% | $424.00 |
| 2012 | 3.52% | $351.78 | 4.24% | $424.00 |
| 2013 | 3.69% | $369.36 | 4.24% | $424.00 |
| 2014 | 3.88% | $387.83 | 4.24% | $424.00 |
| 2015 | 4.07% | $407.22 | 4.24% | $424.00 |
| 2016 | 4.28% | $427.58 | 4.24% | $424.00 |
| 2017 | 4.49% | $448.96 | 4.24% | $424.00 |
| 2018 | 4.71% | $447.41 | 4.24% | $424.00 |
| 2019 | 4.95% | $494.98 | 4.24% | $424.00 |
| 2020 | 5.20% | $519.73 | 4.24% | $424.00 |
| 2021 | 5.46% | $545.72 | 4.24% | $424.00 |
| 2022 | 5.73% | $573.00 | 4.24% | $424.00 |
| 2023 | 6.02% | $601.65 | 4.24% | $424.00 |
| 2024 | 6.32% | $631.74 | 4.24% | $424.00 |
| 2025 | 6.63% | $663.32 | 4.24% | $424.00 |
| 2026 | 6.96% | $696.49 | 4.24% | $424.00 |
| 2027 | 7.31% | $731.32 | 4.24% | $424.00 |
| 2028 | 7.68% | $767.88 | 4.24% | $424.00 |
| 2029 | 8.06% | $806.27 | 4.24% | $424.00 |
| 2030 | 8.47% | $846.59 | 4.24% | $424.00 |
| 2031 | 8.89% | $888.92 | 4.24% | $424.00 |
| 2032 | 9.33% | $933.36 | 4.24% | $424.00 |
| 2033 | 9.80% | $980.03 | 4.24% | $424.00 |
| 2034 | 10.29% | $1029.03 | 4.24% | $424.00 |
| Totals | - | $16,609.71 | - | $12,720.00 |
As we see from the totals that the value stocks will generate more income than long bond for the next 30 years if 5% year over year growth in dividend continues.
All disclaimers apply.
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