Can't find the orig article as don't subscribe to AFR, but understand the gist of the post.
So, returns on cash are poor right now rel to stocks because div yield on stocks is so high. Good example is the banks right now, some of which have promised constant divs on an already low stock price.
If you beleive the bank's promise that they can and will keep the divs up, then you are right, an equity investment, with franked divs makes a whole lot more sense than cash right now.
The big - and it is really, really big IF is can they keep the divs up? The dividend story is assuming the Aus economy trucks along at the current (albeit recently historic low) pace. If you think this is the case, go crazy and buy high yield, low risk stocks. If you beleive the market price of the stocks have correctly priced in the future earnings (i.e. that they will be much lower), then you will sit in cash, and watch dividends shrink, and share prices fall.
I fully agree that there will be a point when we are at that perfect point of very cheap money and very cheap assets. Right now though, money is getting cheaper all the time, and so are assets, so its perhaps not the right time to call the bottom.
