1. When those short term bonds mature, anticipate lower reinvestment yields when interest rates decline.
2. Stocks prices can increase 5% in a day, week, or month. Dividend stocks can provide an additional 4-6% annually beyond stock price gains. Higher risk, with potential for much higher returns beyond 5%.
I think stocks are way overvalued based on a couple of metrics:
—Historic price to earnings ratios are way too high
—Higher cost of capital (up 5% in last two years) not reflected in stock prices
The market does not agree—for now—but even the most minor future events could bring those fundamentals back into play.