Hi all, I was reading the WSJ and couldn't understand a passage on an article and was hoping one of you could clarify it for me. "As the rates fall, risk tends to rise, because a greater proportion of stock returns has to come from capital appreciation. That is likely to make future investing results even more hostage to a continual bull market than you have been accustomed to."
I don't quite understand why falling rates force stock returns to come from capital appreciation. Is there a relationship between dividend and rfr? I am just completely unsure about the second part.
Thanks all.
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